content: -------------------------------------------------------------------------------
  
  
                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549
  
                                     ---------
  
                                     Form 8-K
  
                                  CURRENT REPORT
  
                 Pursuant to Section 13 or 15(d) of the Securities
                               Exchange Act of 1934
  
                                   -------------
  
          Date of Report (Date of earliest event reported) August 22, 2001
  
                                     CULP, INC.
  
              (Exact name of registrant as specified in its charter)
  
  
          North Carolina                  0-12781                56-1001967
  
   (State or other jurisdiction    (Commission File No.)       (IRS Employer
         of incorporation)                                  Identification No.)
  
  
  
                               101 South Main Street
                         High Point, North Carolina  27260
                     (Address of principal executive offices)
                                  (336) 889-5161
               (Registrant's telephone number, including area code)
  
  
  
  
  
           (Former name or former address, if changed since last report)
  
  
  
  
  
  -------------------------------------------------------------------------------
  
  
  <PAGE>
  
  
  Item 5. Other Events
  
  See  attached  Press  Release (2 pages)  and  Financial  Information  Release (9
  pages),  both dated  August 22, 2001,  related to the fiscal 2002 first  quarter
  ended July 29, 2001.
  
  Forward  Looking  Information.  This  Report  contains  statements  that  may be
  deemed   "forward-looking   statements"   within  the  meaning  of  the  federal
  securities  laws,  including  the Private  Securities  Litigation  Reform Act of
  1995.  Such  statements  are  inherently  subject  to risks  and  uncertainties.
  Forward-looking    statements   are   statements   that   include   projections,
  expectations  or beliefs  about future  events or results or  otherwise  are not
  statements  of historical  fact.  Such  statements  are often  characterized  by
  qualifying words such as "expect,"  "believe,"  "estimate," "plan" and "project"
  and their  derivatives.  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.  Decreases  in  these  economic  indicators  could  have a  negative
  effect  on  the  company's  business  and  prospects.   Likewise,  increases  in
  interest  rates,  particularly  home mortgage  rates,  and increases in consumer
  debt or the general  rate of  inflation,  could  affect the  company  adversely.
  Because of the  significant  percentage  of the  company's  sales  derived  from
  international  shipments,  strengthening  of  the U.  S.  dollar  against  other
  currencies  could make the company's  products less  competitive on the basis of
  price  in  markets  outside  the  United  States.  Additionally,   economic  and
  political  instability  in  international  areas could affect the demand for the
  company's products.
  
  
  
                                     SIGNATURE
  
  
  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.
  
  
                                      CULP, INC.
                                      (Registrant)
  
  
                                By:    Franklin N. Saxon
                                       -----------------
                                       Executive Vice President and
                                       Chief Financial Officer
  
  
  
  
  
  
  Dated:   August 22, 2001
  
  
  <PAGE>
  
  
  
  
  FOR IMMEDIATE RELEASE
  
  
          CULP REPORTS FIRST QUARTER RESULTS INCLUDING RESTRUCTURING CHARGE
                               ----------------------
                        CONTINUES TO EXPECT FULL-YEAR PROFIT
                    EXCLUDING RESTRUCTURING AND RELATED CHARGES
  
  HIGH POINT,  N. C. (Aug. 22, 2001) -- As anticipated,  Culp,  Inc.  (NYSE:  CFI)
  today  reported  a  loss  for  its  first  quarter  of  fiscal  2002  due to the
  industry-wide  slowdown in demand in the home  furnishings  industry and charges
  from the company's  announced  actions to reduce costs and increase  efficiency.
  The company  indicated that excluding  restructuring  and related  charges,  the
  loss for the first quarter of fiscal 2002 was $1.4  million,  or $0.12 per share
  diluted,  compared  with a  year-earlier  loss of $1.8  million,  or  $0.16  per
  share.  Culp  indicated  that it continues to expect to operate  profitably  for
  fiscal 2002 as a whole, excluding restructuring and related charges.
  
        For the three  months  ended July 29,  2001,  Culp  reported  net sales of
  $86.5   million   compared   with   $101.9   million  a  year   ago.   Including
  restructuring  costs,  the company  reported a net loss for the first quarter of
  fiscal 2002 of $2.9 million, or $0.26 per share diluted.
  
        Robert G.  Culp,  III,  chief  executive  officer,  commented,  "As we had
  earlier  indicated,  sales  for  the  first  fiscal  quarter,  which  is  not  a
  seasonally  strong period for our business,  were below the  year-earlier  level
  of $101.9  million.  We are  benefiting  from the  restructuring  plan and other
  actions we have  taken to reduce  costs and were able to reduce our loss for the
  quarter,  excluding  restructuring  and  related  charges,  versus a year ago in
  spite of the 15.1%  decline  in sales.  Based on  current  trends,  we expect to
  report  higher  earnings  in the  second  quarter  versus  the  $0.03  per share
  diluted  in the  year-earlier  period  and  remain  optimistic  about  operating
  profitably  for fiscal  2002 as a whole,  excluding  restructuring  and  related
  charges.
  
        "The  basic  goals  of  the  restructuring   initiative  that  is  nearing
  completion are to increase  manufacturing  utilization,  raise  productivity and
  lower operating  expenses.  The restructuring  plan involves phasing out certain
  fabric  manufacturing  facilities,  closing  one of our four yarn  manufacturing
  plants and reducing selling,  general and  administrative  expenses.  Our target
  is now to achieve  annualized  cost  reductions of at least $14 million when the
  benefits of this  program  are fully  realized.  Culp now has a sound  footprint
  of efficient,  world-class facilities utilizing  state-of-the-art equipment that
  positions  us well to meet the demands by  manufacturers  for even  shorter lead
  times, consistently reliable delivery schedules and appealing designs."
  
  
        Culp added,  "We are  encouraged by the positive  momentum in market share
  that  is  being   generated   by  the   successful   new  designs  that  we  are
  introducing.  Placements  of our fabrics by U.S.  manufacturers  of  residential
  furniture over the last several markets have been  gratifying;  and as a result,
  we are seeing a firming in  incoming  orders from this  portion of our  business
  as well as in  mattress  ticking.  Some of this  improvement  is  being  offset,
  however,  by continued  weakness in our  international  sales. The high value of
  the dollar  relative to other  currencies  is making it very  difficult for Culp
  and other U.S.-based  manufacturers  to compete  profitably in the major markets
  outside the United States and Canada.
  
        "We  generated  $4.4  million  in cash from  operations  during  the first
  quarter that allowed us to continue  strengthening  our balance sheet.  Our debt
  of $110.7  million at the close of the quarter was down $26.2  million,  or 19%,
  from a year  ago;  and our  debt/capital  ratio of 48% was at its  lowest  level
  since July 1997.  Our capital  expenditures  for fiscal 2002 remain  targeted at
  approximately $4 million compared with $8.1 million in fiscal 2001."
  
        Culp, Inc. is one of the world's largest  marketers of upholstery  fabrics
  for furniture  and is a leading  marketer of mattress  ticking for bedding.  The
  company's  fabrics are used  principally in the  production of  residential  and
  commercial furniture and bedding products.
  
        This  release  contains  statements  that may be  deemed  "forward-looking
  statements"  within the meaning of the federal  securities  laws,  including the
  Private   Securities   Litigation  Reform  Act  of  1995.  Such  statements  are
  inherently  subject to risks and uncertainties.  Forward-looking  statements are
  statements  that  include  projections,  expectations  or beliefs  about  future
  events or results or otherwise  are not  statements  of  historical  fact.  Such
  statements  are  often  characterized  by  qualifying  words  such as  "expect,"
  "believe,"  "estimate,"  "plan" and  "project"  and their  derivatives.  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.  Decreases  in
  these  economic  indicators  could  have a  negative  effect  on  the  company's
  business and  prospects.  Likewise,  increases in interest  rates,  particularly
  home  mortgage  rates,  and  increases  in consumer  debt or the general rate of
  inflation,  could  affect the  company  adversely.  Because  of the  significant
  percentage  of  the  company's  sales  derived  from  international   shipments,
  strengthening  of the  U.S.  dollar  against  other  currencies  could  make the
  company's  products less  competitive  on the basis of price in markets  outside
  the  United  States.   Additionally,   economic  and  political  instability  in
  international areas could affect the demand for the company's products.
  
                                     CULP, INC.
                           Condensed Financial Highlights
  (Unaudited)
                                                      Three Months Ended
                                               --------------------------------
                                                  July 29,          July 30,
                                                    2001              2000
                                               ---------------   --------------
  Net sales                                    $   86,463,000    $ 101,878,000
  Net (loss)                                   $   (2,882,000)   $  (1,756,000)
  Net (loss) per share:
    Basic                                      $        (0.26)   $       (0.16)
    Diluted                                    $        (0.26)   $       (0.16)
  Net (loss) per diluted share, excluding
    restructuring and related charges*         $        (0.12)   $       (0.16)
  Average shares outstanding:
    Basic                                          11,221,000       11,209,000
    Diluted                                        11,221,000       11,209,000
  
  * Excludes  restructuring  and related  charges for the three  months ended July
    29, 2001 of $2.3  million  ($1.5  million,  or $0.14 per share  diluted  after
    taxes).
  
  
                                         -END-
  
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                           CONSOLIDATED STATEMENTS OF LOSS
             FOR THE THREE MONTHS ENDED JULY 29, 2001 AND JULY 30, 2000
  
                  (Amounts in Thousands, Except for Per Share Data)
  <TABLE>
  <CAPTION>
                                                               THREE MONTHS ENDED (UNAUDITED)
                                              --------------------------------------------------------------------
                                                       Amounts                                  Percent of Sales
                                              -------------------------                    -------------------------
                                                July 29,     July 30,       % Over
                                                  2001         2000        (Under)            2002         2001
                                              -----------  ------------  -----------       -----------  ------------
  <S>                                      <C>                 <C>          <C>              <C>           <C>
  Net sales                                $      86,463       101,878       (15.1)%          100.0 %       100.0 %
  Cost of sales                                   75,674        87,704       (13.7)%           87.5 %        86.1 %
                                              -----------  ------------  -----------       -----------  ------------
          Gross profit                            10,789        14,174       (23.9)%           12.5 %        13.9 %
  
  Selling, general and
    administrative expenses                       11,235        13,778       (18.5)%           13.0 %        13.5 %
  Restructuring expense                            1,303             0       100.0 %            1.5 %         0.0 %
                                              -----------  ------------  -----------       -----------  ------------
          Income (loss) from operations           (1,749)          396      (541.7)%           (2.0)%         0.4 %
  
  Interest expense                                 2,068         2,323       (11.0)%            2.4 %         2.3 %
  Interest income                                    (23)           (7)      228.6 %           (0.0)%        (0.0)%
  Other expense (income), net                        572           741       (22.8)%            0.7 %         0.7 %
                                              -----------  ------------  -----------       -----------  ------------
          Loss before income taxes                (4,366)       (2,661)      (64.1)%           (5.0)%        (2.6)%
  
  Income taxes  *                                 (1,484)         (905)      (64.0)%           34.0 %        34.0 %
                                              -----------  ------------  -----------       -----------  ------------
          Net loss                          $     (2,882)       (1,756)      (64.1)%           (3.3)%        (1.7)%
                                              ===========  ============  ===========       ===========  ============
  
  Net loss per share                              ($0.26)       ($0.16)      (62.5)%
  Net loss per share, assuming dilution           ($0.26)       ($0.16)      (62.5)%
  Net loss per share, excluding restructuring
    and related charges  **                       ($0.12)       ($0.16)       25.0 %
  Dividends per share                               $0.0        $0.035      (100.0)%
  Average shares outstanding                      11,221        11,209         0.1 %
  Average shares outstanding, assuming dilution   11,221        11,209         0.1 %
  
  </TABLE>
  
  
  *  Percent of sales column is calculated as a % of loss before income taxes.
  ** Excludes restructuring and related  charges in 2002 of $2.3 million ($1.5
     million or $0.14 per share diluted, after taxes)
  
  <PAGE>
                                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                            CONSOLIDATED BALANCE SHEETS
                                  JULY 29, 2001, JULY 30, 2000, AND APRIL 29, 2001
                                                     Unaudited
                                               (Amounts in Thousands)
  <TABLE>
  <CAPTION>
  
                                                       Amounts                         Increase
                                           ---------------------------------          (Decrease)
                                               July 29,         July 30,      ---------------------------- *April 29,
                                                 2001             2000         Dollars        Percent        2001
                                            ----------------  -------------  -------------    -----------  ---------
  <S>                                         <C>                 <C>          <C>           <C>          <C>
  Current assets
        Cash and cash investments             $         549          1,654       (1,105)      (66.8) %       1,207
        Accounts receivable                          52,353         58,851       (6,498)      (11.0) %      57,849
        Inventories                                  59,006         74,600      (15,594)      (20.9) %      59,997
        Other current assets                          9,893         11,565       (1,672)      (14.5) %       7,856
                                            ----------------  ------------- -------------    -----------  ---------
                  Total current assets              121,801        146,670      (24,869)      (17.0) %     126,909
  
  Property, plant & equipment, net                  109,417        123,636      (14,219)      (11.5) %     112,322
  Goodwill                                           48,129         49,525       (1,396)       (2.8) %      48,478
  Other assets                                        1,711          6,652       (4,941)      (74.3) %       1,871
                                            ----------------  ------------- -------------    -----------  ---------
  
                  Total assets                $     281,058        326,483      (45,425)      (13.9) %     289,580
                                            ================  ============= =============    ===========  =========
  
  
  Current liabilities
        Current maturities of long-term debt  $       2,130          1,678          452        26.9  %       2,488
        Accounts payable                             24,773         24,942         (169)       (0.7) %      27,371
        Accrued expenses                             16,494         19,762       (3,268)      (16.5) %      17,153
        Income taxes payable                              0              0            0         0.0  %       1,268
                                            ----------------  ------------- -------------    -----------  ---------
                  Total current liabilities          43,397         46,382       (2,985)       (6.4) %      48,280
  
  Long-term debt                                    108,522        135,150      (26,628)      (19.7) %     109,168
  Deferred income taxes                              10,330         17,459       (7,129)      (40.8) %      10,330
                                            ----------------  ------------- -------------    -----------  ---------
                  Total liabilities                 162,249        198,991      (36,742)      (18.5) %     167,778
  
  Shareholders' equity                              118,809        127,492       (8,683)       (6.8) %     121,802
                                            ----------------  ------------- -------------    -----------  ---------
  
                  Total liabilities and
                  shareholders' equity        $     281,058        326,483      (45,425)      (13.9) %     289,580
                                            ================  ============= =============    ===========  =========
  
  Shares outstanding                                 11,221         11,209           12         0.1  %      11,221
                                            ================  ============= =============    ===========  =========
  
  </TABLE>
  
  *  Derived from audited financial statements.
  
  <PAGE>
                                     CULP, INC.
                            FINANCIAL INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE THREE MONTHS ENDED JULY 29, 2001 AND JULY 30, 2000
                                      Unaudited
  
                               (Amounts in Thousands)
  <TABLE>
  <CAPTION>
                                                                           THREE MONTHS ENDED
                                                                        -------------------------
                                                                                Amounts
                                                                        -------------------------
                                                                         July 29,     July 30,
                                                                           2001         2000
                                                                        ------------ ------------
  <S>                                                                     <C>          <C>
  Cash flows from operating activities:
      Net  loss                                                     $       (2,882)      (1,756)
      Adjustments to reconcile net loss to net cash
         provided by operating activities:
            Depreciation                                                     4,473        5,060
            Amortization of intangible assets                                  393          399
            Amortization of deferred compensation                              (13)          63
            Restructuring expense                                            1,303            0
            Changes in assets and liabilities:
               Accounts receivable                                           5,496       16,372
               Inventories                                                     991         (129)
               Other current assets                                         (1,987)      (1,216)
               Other assets                                                     (3)         147
               Accounts payable                                               (123)      (6,886)
               Accrued expenses                                             (1,957)      (2,409)
               Income taxes payable                                         (1,268)           0
                                                                        ------------ ------------
                  Net cash provided by operating activities                  4,423        9,645
                                                                        ------------ ------------
  Cash flows from investing activities:
      Capital expenditures                                                  (1,602)      (2,289)
      Purchase of investments to fund deferred compensation liability            0         (200)
                                                                        ------------ ------------
                  Net cash used in investing activities                     (1,602)      (2,489)
                                                                        ------------ ------------
  Cash flows from financing activities:
      Proceeds from issuance of long-term debt                                  16            0
      Principal payments on long-term debt                                  (1,020)        (658)
      Change in accounts payable-capital expenditures                       (2,475)      (5,459)
      Dividends paid                                                             0         (392)
                                                                        ------------ ------------
                  Net cash used in financing activities                     (3,479)      (6,509)
                                                                        ------------ ------------
  
  Increase (decrease) in cash and cash investments                            (658)         647
  
  Cash and cash investments at beginning of period                           1,207        1,007
                                                                        ------------ ------------
  
  Cash and cash investments at end of period                        $          549        1,654
                                                                        ============ ============
  </TABLE>
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL ANALYSIS
                                    JULY 29, 2001
  <TABLE>
  <CAPTION>
                                                FISCAL 01                             FISCAL 02
                                              -------------   -------------------------------------------------------   --------------
                                                   Q1                Q1            Q2            Q3             Q4           LTM (4)
                                              -------------   -------------------------------------------------------   --------------
  <S>                                          <C>              <C>            <C>          <C>            <C>            <C>
  INVENTORIES
          Inventory turns                             4.7               5.1
  
  RECEIVABLES
          Days sales in  receivables                   49                51
          Percent current & less
            than 30 days past due                   91.5%             91.9%
  
  WORKING CAPITAL
          Current ratio                               3.2               2.8
          Working capital turnover (3)                4.3               4.1
          Operating working capital (3)          $108,509           $86,586
  
  PROPERTY, PLANT & EQUIPMENT
          Depreciation rate                          8.0%              7.2%
          Percent property, plant &
            equipment are  depreciated              51.1%             56.2%
          Capital expenditures                     $8,050 (1)        $1,602
  
  PROFITABILITY
          Return on average total capital          (0.3%)            (2.7%)                                                    (1.5%)
          Return on average equity                 (5.5%)            (9.6%)                                                    (7.6%)
          Net loss per share                      ($0.16)           ($0.26)                                                   ($0.84)
          Net loss per share (diluted)            ($0.16)           ($0.26)                                                   ($0.84)
          Net loss per share, excluding
            restructuring and related charges (6) ($0.16)           ($0.12)                                                   ($0.27)
  
  LEVERAGE
          Total liabilities/equity                 156.1%            136.6%
          Funded debt/equity                       107.3%             93.1%
          Funded debt/capital employed              51.8%             48.2%
          Funded debt                            $136,828          $110,652
          Funded debt/EBITDA (LTM) (5)               3.44              4.26
  
  
  OTHER
          Book value per share                     $11.37            $10.59
          Employees at quarter end                  3,722             3,018
          Sales per employee (annualized)        $108,000          $113,000
          Capital employed                       $264,320          $229,461
          Effective income tax rate                 34.0%             34.0%
          EBITDA (2)                               $5,177            $4,814                                                   $25,135
          EBITDA/net sales (2)                       5.1%              5.6%                                                      6.4%
  </TABLE>
  
    (1) Expenditures for entire year.
    (2) Earnings before interest, income taxes, depreciation, amortization and all
        restructuring and related charges, non-cash or cash.
    (3) Working capital for this calculation is accounts receivable,inventories
        and accounts payable.
    (4) LTM represents "Latest Twelve Months"
    (5) EBITDA includes capitalized interest and certain cash and non-cash
        charges, as defined by the company's credit agreement.
    (6) Excludes restructuring and related charges in the first quarter of 2002 of
        $2.3 million ($1.5 million or $0.14 per share diluted, after taxes)
        and $9.7 million ($6.4 million or $0.57 per share diluted, after taxes)
        for the last twelve months.
  
  
  
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                              SALES BY SEGMENT/DIVISION
             FOR THE THREE MONTHS ENDED JULY 29, 2001 AND JULY 30, 2000
  
  
                               (Amounts in thousands)
  <TABLE>
  <CAPTION>
                                                 THREE MONTHS ENDED (UNAUDITED)
                                  -------------------------------------------------------------
                                        Amounts                         Percent of Total Sales
                                  ---------------------                 -----------------------
                                  July 29,   July 30,       % Over
  Segment/Division                  2001       2000         (Under)     2002         2001
  ------------------------------  ---------- ----------   ------------  ----------  -----------
  <S>                           <C>            <C>        <C>           <C>          <C>
  Upholstery Fabrics
      Culp Decorative Fabrics   $    35,160     41,533     (15.3) %       40.7 %       40.8 %
      Culp Velvets/Prints            25,520     30,074     (15.1) %       29.5 %       29.5 %
      Culp Yarn                         967      3,319     (70.9) %        1.1 %        3.3 %
                                  ---------- ----------   ------------  ----------  -----------
                                     61,647     74,926     (17.7) %       71.3 %       73.5 %
  
  Mattress Ticking
      Culp Home Fashions             24,816     26,952      (7.9) %       28.7 %       26.5 %
                                  ---------- ----------   ------------  ----------  -----------
  
                              * $    86,463    101,878     (15.1) %      100.0 %      100.0 %
                                  ========== ==========   ============  ==========  ===========
  
  </TABLE>
  
  * U.S.  sales were $71,800 and $82,290 for the first  quarter of fiscal 2002 and
  fiscal 2001,  respectively.  The percentage decrease in U.S. sales was 12.7% for
  the first quarter.
  
  <PAGE>
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                       INTERNATIONAL SALES BY GEOGRAPHIC AREA
             FOR THE THREE MONTHS ENDED JULY 29, 2001 AND JULY 30, 2000
  
  <TABLE>
  <CAPTION>
                               (Amounts in thousands)
  
                                                     THREE MONTHS ENDED (UNAUDITED)
                                   -------------------------------------------------------------------
                                            Amounts                           Percent of Total Sales
                                   --------------------------                -------------------------
                                    July 29,      July 30,       % Over
        Geographic Area               2001          2000        (Under)         2002          2001
  ----------------------------     ------------  ------------  -----------   -----------    ----------
  <S>                             <C>                <C>       <C>             <C>          <C>
  North America (Excluding USA)   $      8,052         8,395    (4.1) %         54.9 %       42.9 %
  Europe                                   705         1,452   (51.4) %          4.8 %        7.4 %
  Middle East                            2,903         5,043   (42.4) %         19.8 %       25.7 %
  Far East & Asia                        2,570         3,236   (20.6) %         17.5 %       16.5 %
  South America                            159           306   (48.0) %          1.1 %        1.6 %
  All other areas                          274         1,156   (76.3) %          1.9 %        5.9 %
                                   ------------  ------------  -----------   -----------    ----------
  
                                  $     14,663        19,588   (25.1) %        100.0 %      100.0 %
                                   ============  ============  ===========   ===========    ==========
  
  </TABLE>
  
  International  sales,  and the  percentage of total sales,  for each of the last
  five fiscal years follows:  fiscal  1997-$101,571  (25%);  fiscal  1998-$137,223
  (29%);  fiscal  1999-$113,354  (23%);  fiscal  2000-$111,104  (23%);  and fiscal
  2001-$77,824 (19%).  International sales for the first quarter represented 17.0%
  and 19.2% for 2002 and 2001, respectively.
  
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
             for the three months ended July 29, 2001 and July 30, 2000
  
  
  INCOME STATEMENT COMMENTS
  
       GENERAL  - For the  first  quarter,  net  sales  decreased  15.1%  to $86.5
  million; and the company reported a net loss of $2.9 million, or $0.26 per share
  diluted (based on 11,221,000  average shares  outstanding)  versus a net loss of
  $1.8 million,  or $0.16 per share diluted  (based on 11,209,000  average  shares
  outstanding) in the first quarter of fiscal 2001.  Without the restructuring and
  related  charges,  the loss for the first quarter of fiscal 2002 would have been
  $1.4 million, or $0.12 per share diluted. As described below in "SG&A EXPENSES,"
  an additional  significant  factor affecting the first quarter loss was bad debt
  expense of $800,000, or $.05 per share on an after-tax basis. This compares with
  an expense of $45,000 for first quarter of 2001.
  
       The company's  long-term,  strategic plan encompasses  several  competitive
  initiatives:
  
       Broad Product  Offering - continuing to market one of the broadest  product
       lines in upholstery fabrics and mattress ticking,  consistent with customer
       demand.  Through  its  extensive  manufacturing  capabilities,  the company
       competes in most major categories except leather;
  
       Diverse  Customer Base - maintaining a diverse  customer  base. The company
       has  long-standing  relationships  with  most  major  upholstery  furniture
       manufacturers.  Ownership of resources in the home furnishings  industry is
       becoming increasingly  concentrated,  and the company has successfully been
       able to  capitalize  on its size and product  breadth to supply more of the
       needs of existing  customers.  One customer accounted for approximately 11%
       of net sales during fiscal 2001.  Culp is pursuing  opportunities  in other
       end-use markets in addition to U.S. residential furniture, such as bedding,
       international, commercial furniture and juvenile furniture;
  
       Design  Innovation  -  supplying  fabrics  that are  fashionable  and match
       current consumer preferences.  The company's principal design resources are
       consolidated  in a  single  facility  that has  advanced  computer-assisted
       design  systems and promotes  sharing of innovative  designs across product
       lines.  Culp encourages  active  customer  involvement in the entire design
       process; and
  
       Vertical  Integration - operating as a vertically  integrated  manufacturer
       and  taking  advantage  of  economies,  quality,  supply  availability  and
       efficiencies  that can be gained by producing  the raw material  components
       that are used in the manufacture of its products.
  
       RESTRUCTURING  ACTIONS  - During  fiscal  2001,  the  company  initiated  a
  restructuring plan intended to lower operating expenses,  increase manufacturing
  utilization,  raise  productivity and position the company to operate profitably
  within  the  current  environment  of  reduced  demand.  The plan  involved  the
  consolidation  of  certain  fabric   manufacturing   capacity  within  the  Culp
  Decorative   Fabrics   division,   closing  one  of  the  company's   four  yarn
  manufacturing  plants within Culp Yarn,  and an extensive  reduction in selling,
  general  and  administrative  expenses.  The  company  also  recognized  certain
  inventory  write-downs  related  to  the  closed  facilities  as  part  of  this
  initiative.  The  total  charge  from  the  restructuring,  cost  reduction  and
  inventory write-down  initiatives is expected to total $10.0 million, about $3.6
  million of which represents  non-cash items.  This includes an additional amount
  of $1.3 million resulting from  re-evaluating  restructuring  costs in the first
  quarter of fiscal 2002,  principally related to health care costs for terminated
  personnel.  The company  recognized  $7.4 million of  restructuring  and related
  charges during fiscal 2001 and $2.3 million in the first quarter of fiscal 2002.
  Management  expects to record the  remaining  charges,  estimated  at  $150,000,
  during  the  second  quarter  of  fiscal  2002.  The  company  plans to  realize
  annualized cost reductions of at least $14 million when the full benefit of this
  program is  realized.  For the first  quarter,  the  restructuring  and  related
  charges  are  recorded  as  follows:  $1.3  million  in  the  line  item  called
  "Restructuring  expense" and $1.0 million in Cost of sales.  The costs reflected
  in Cost of sales are  principally  related to the  relocation  of  manufacturing
  equipment.
  
       Management  believes the company now has a sound  footprint  of  efficient,
  world-class facilities utilizing  state-of-the-art  equipment that positions the
  company well to meet the demands by  manufacturers  for even shorter lead times,
  consistently reliable delivery schedules and appealing designs.
  
       NET SALES - Compared  with fiscal  2001,  upholstery  fabric  sales for the
  first  quarter of fiscal 2002  decreased  17.7% to $61.6  million,  and mattress
  ticking sales  decreased  7.9% to $24.8  million (See Sales by  Segment/Division
  schedule on Page 5). The upholstery fabric sales decrease reflects:  (1) a sharp
  reduction  (24.9%,  or  $3.8  million)  in  international   sales,   principally
  reflecting  the  high  value  of  the  U.S.  dollar  relative  to  international
  currencies; (2) a decrease in external yarn sales (70.9% or $2.4 million) due to
  the company's  internal  consumption of more of the yarn  division's  output and
  exit from certain  yarn  businesses  as part of the  restructuring  plan;  (3) a
  decrease in sales to contract furniture customers ($1.2 million), and (4) a more
  moderate decrease (11.6% or $5.9 million) in sales to U.S. residential furniture
  manufacturers. The company believes that it is improving its market share in the
  U.S. residential market because of well-received fabric placements from the Culp
  Decorative Fabrics and Culp  Velvets/Prints  divisions.  The decline in sales in
  this category is attributed to general market conditions, and the sales decrease
  in mattress ticking also reflects an overall  slowdown in  industry-wide  demand
  for bedding in the U.S.
  
       The company  had  previously  announced  that it did not expect to report a
  profit for the first quarter,  excluding  restructuring and related charges. Key
  factors  influencing  the  year-to-year  comparison  were the sharp,  persistent
  weakness in consumer spending on home furnishings, especially in the promotional
  price  category,  and the strength in the U.S. dollar that had an adverse impact
  on exports.
  
       Although industry conditions remain  challenging,  incoming orders early in
  the second  quarter for  mattress  ticking and from U.S.  residential  furniture
  customers  are showing some  improvement.  Based on this trend,  Culp expects to
  operate its manufacturing capacity at a higher level of output than in the first
  quarter. Any increase in demand from U.S. manufacturers of residential furniture
  will be offset in part by a  continued  decline in  international  and  contract
  orders.
  
       GROSS PROFIT - Gross profit included  restructuring related charges of $1.0
  million.  Excluding  these  charges,  gross profit  declined 17.0% for the first
  quarter of fiscal 2002 compared with the year-earlier  period and decreased as a
  percentage  of net sales  from  13.9% to 13.6%.  The  decline  in gross  profit,
  excluding restructuring related charges, of $2.4 million was attributable to the
  Culp Decorative Fabrics ("CDF") division.  The principal factors contributing to
  the decrease were: (1) the decline in sales volume, and (2) lower  manufacturing
  productivity due to the consolidation  activities within the division during the
  quarter.  The company has taken  significant  steps to improve  productivity and
  increase  output in the CDF  division  over the last six  months.  Although  the
  company expects to see improving results from these  restructuring  steps in the
  second  quarter for CDF, it does not expect to realize the full benefit of these
  actions  until the second half of fiscal  2002.  The company  experienced  gross
  margin  improvement in each of its other  divisions,  even while reporting lower
  sales in those divisions.
  
       SG&A EXPENSES - SG&A expenses for the first quarter declined 18.5% from the
  prior year.  Reflecting the impact of the company's  actions to reduce expenses,
  SG&A  expenses  declined  from  13.5% to 13.0% as a  percentage  of sales.  SG&A
  expenses in the first quarter include bad debt expense of $800,000 compared with
  $45,000 in the year-earlier period. The increase in bad debt expense from a year
  ago  reflects  write-offs  primarily  of two  residential  furniture  customers.
  Without the  additional  bad debt  expense,  SG &A expenses were reduced by $3.3
  million, or 23.9%, and were 12.1% of net sales.
  
       INTEREST  EXPENSE - Interest  expense for the first  quarter  declined from
  $2.3 million to $2.1 million due to significantly lower borrowings  outstanding,
  offset  somewhat  by a  substantial  increase  in  interest  rates (see  amended
  interest rate matrix in the "LONG-TERM DEBT" paragraph on page 9).
  
       OTHER EXPENSE (INCOME),  NET - Other expense (income) for the first quarter
  of fiscal 2002 totaled  $572,000  compared with $741,000 in the prior year.  The
  decrease was principally due to the company's deferred  compensation plan, which
  was  terminated  in  January  2001 as a part  of the  company's  cost  reduction
  initiative.
  
       INCOME TAXES - The  effective tax rate for the first quarter of fiscal 2002
  was 34.0%, unchanged from the prior year.
  
       EBITDA - EBITDA  for the  first  quarter  of fiscal  2002 was $4.8  million
  compared with $5.2 million in the prior year. EBITDA excludes  interest,  income
  taxes,  depreciation,  amortization,  and all restructuring and related charges,
  non-cash or cash.
  
  BALANCE SHEET COMMENTS
  
       WORKING  CAPITAL - Accounts  receivable as of July 29, 2001 decreased 11.0%
  from the year-earlier level, due principally to the decline in sales. Days sales
  outstanding  totaled 51 days at July 29, 2001  compared  with 49 a year ago. The
  aging of accounts  receivable  was 91.9%  current and less than 30 days past due
  versus 91.5% a year ago. Inventories at the close of the first quarter decreased
  20.9% from a year ago. Inventory turns for the first quarter were 5.1 versus 4.7
  for the year-earlier  period.  Operating working capital  (comprised of accounts
  receivable,  inventory and accounts payable) was $86.6 million at July 29, 2001,
  down from $108.5 million a year ago.
  
       PROPERTY,  PLANT AND EQUIPMENT - Capital  spending for the first quarter of
  fiscal  2002  declined  to  $1.6  million  compared  with  $2.3  million  in the
  year-earlier  period.  The company's budget for capital spending for fiscal 2002
  is $4.0 million, compared with $8.1 million in fiscal 2001. Depreciation for the
  first quarter of fiscal 2002 totaled $4.5 million.
  
       LONG-TERM  DEBT - The company has reduced  funded debt by $26.2  million or
  19.1% from the first quarter of last year,  and by $1.0 million from last fiscal
  year end. Funded debt equals long-term debt plus current maturities. Funded debt
  was $110.7 million at July 29, 2001, compared with $136.8 million a year ago and
  $111.7 million at fiscal year end. Compared with 51.8% a year ago, the company's
  funded  debt-to-capital ratio was 48.2% at July 29, 2001, its lowest level since
  July 1997.  During  fiscal  2001,  the company  amended  its credit  facility to
  include terms that restrict the payment of cash dividends and share  repurchases
  at this time,  limit  capital  expenditures,  increase the interest  rate on its
  revolving credit facility from LIBOR plus 1.60% to LIBOR plus 4.00% and increase
  the  letter of credit  fees on IRBs from  1.10% to  4.00%.  The  amended  credit
  facility  lowered  the amount of funds  available  under the  facility  from $88
  million to $25 million. The company had outstanding  borrowings of approximately
  $1 million  under the  facility at the end of the first  quarter of fiscal 2002.
  The company was in  compliance  with its loan  agreements  as of July 29,  2001.
  Other than the credit facility, required principal payments under the respective
  loan  agreements  during  fiscal  2002 and fiscal 2003 total  $473,000  and $2.2
  million, respectively.
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metadata_filer: {"company-data": {"conformed-name": "CULP INC", "cik": "0000723603", "assigned-sic": "2211", "irs-number": "561001967", "state-of-incorporation": "NC", "fiscal-year-end": "0430"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-12597", "film-number": "1721465"}, "business-address": {"street1": "101 S MAIN ST", "city": "HIGH POINT", "state": "NC", "zip": "27260", "phone": "3368895161"}, "mail-address": {"street1": "P O BOX 2686", "street2": "101 S MAIN ST", "city": "HIGH POINT", "state": "NC", "zip": "27261"}}
text: -------------------------------------------------------------------------------
  
                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549
  
                                     ---------
  
                                     Form 8-K
  
                                  CURRENT REPORT
  
                 Pursuant to Section 13 or 15(d) of the Securities
                               Exchange Act of 1934
  
                                   -------------
  
          Date of Report (Date of earliest event reported) August 22, 2001
  
                                     CULP, INC.
  
              (Exact name of registrant as specified in its charter)
  
          North Carolina                  0-12781                56-1001967
  
   (State or other jurisdiction    (Commission File No.)       (IRS Employer
         of incorporation)                                  Identification No.)
  
                               101 South Main Street
                         High Point, North Carolina  27260
                     (Address of principal executive offices)
                                  (336) 889-5161
               (Registrant's telephone number, including area code)
  
           (Former name or former address, if changed since last report)
  
  -------------------------------------------------------------------------------
  Item 5. Other Events
  
  See  attached  Press  Release (2 pages)  and  Financial  Information  Release (9
  pages),  both dated  August 22, 2001,  related to the fiscal 2002 first  quarter
  ended July 29, 2001.
  
  Forward  Looking  Information.  This  Report  contains  statements  that  may be
  deemed   "forward-looking   statements"   within  the  meaning  of  the  federal
  securities  laws,  including  the Private  Securities  Litigation  Reform Act of
  1995.  Such  statements  are  inherently  subject  to risks  and  uncertainties.
  Forward-looking    statements   are   statements   that   include   projections,
  expectations  or beliefs  about future  events or results or  otherwise  are not
  statements  of historical  fact.  Such  statements  are often  characterized  by
  qualifying words such as "expect,"  "believe,"  "estimate," "plan" and "project"
  and their  derivatives.  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.  Decreases  in  these  economic  indicators  could  have a  negative
  effect  on  the  company's  business  and  prospects.   Likewise,  increases  in
  interest  rates,  particularly  home mortgage  rates,  and increases in consumer
  debt or the general  rate of  inflation,  could  affect the  company  adversely.
  Because of the  significant  percentage  of the  company's  sales  derived  from
  international  shipments,  strengthening  of  the U.  S.  dollar  against  other
  currencies  could make the company's  products less  competitive on the basis of
  price  in  markets  outside  the  United  States.  Additionally,   economic  and
  political  instability  in  international  areas could affect the demand for the
  company's products.
  
                                     SIGNATURE
  
  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.
  
                                      CULP, INC.
                                      (Registrant)
  
                                By:    Franklin N. Saxon
                                       -----------------
                                       Executive Vice President and
                                       Chief Financial Officer
  
  Dated:   August 22, 2001
  FOR IMMEDIATE RELEASE
  
          CULP REPORTS FIRST QUARTER RESULTS INCLUDING RESTRUCTURING CHARGE
                               ----------------------
                        CONTINUES TO EXPECT FULL-YEAR PROFIT
                    EXCLUDING RESTRUCTURING AND RELATED CHARGES
  
  HIGH POINT,  N. C. (Aug. 22, 2001) -- As anticipated,  Culp,  Inc.  (NYSE:  CFI)
  today  reported  a  loss  for  its  first  quarter  of  fiscal  2002  due to the
  industry-wide  slowdown in demand in the home  furnishings  industry and charges
  from the company's  announced  actions to reduce costs and increase  efficiency.
  The company  indicated that excluding  restructuring  and related  charges,  the
  loss for the first quarter of fiscal 2002 was $1.4  million,  or $0.12 per share
  diluted,  compared  with a  year-earlier  loss of $1.8  million,  or  $0.16  per
  share.  Culp  indicated  that it continues to expect to operate  profitably  for
  fiscal 2002 as a whole, excluding restructuring and related charges.
  
        For the three  months  ended July 29,  2001,  Culp  reported  net sales of
  $86.5   million   compared   with   $101.9   million  a  year   ago.   Including
  restructuring  costs,  the company  reported a net loss for the first quarter of
  fiscal 2002 of $2.9 million, or $0.26 per share diluted.
  
        Robert G.  Culp,  III,  chief  executive  officer,  commented,  "As we had
  earlier  indicated,  sales  for  the  first  fiscal  quarter,  which  is  not  a
  seasonally  strong period for our business,  were below the  year-earlier  level
  of $101.9  million.  We are  benefiting  from the  restructuring  plan and other
  actions we have  taken to reduce  costs and were able to reduce our loss for the
  quarter,  excluding  restructuring  and  related  charges,  versus a year ago in
  spite of the 15.1%  decline  in sales.  Based on  current  trends,  we expect to
  report  higher  earnings  in the  second  quarter  versus  the  $0.03  per share
  diluted  in the  year-earlier  period  and  remain  optimistic  about  operating
  profitably  for fiscal  2002 as a whole,  excluding  restructuring  and  related
  charges.
  
        "The  basic  goals  of  the  restructuring   initiative  that  is  nearing
  completion are to increase  manufacturing  utilization,  raise  productivity and
  lower operating  expenses.  The restructuring  plan involves phasing out certain
  fabric  manufacturing  facilities,  closing  one of our four yarn  manufacturing
  plants and reducing selling,  general and  administrative  expenses.  Our target
  is now to achieve  annualized  cost  reductions of at least $14 million when the
  benefits of this  program  are fully  realized.  Culp now has a sound  footprint
  of efficient,  world-class facilities utilizing  state-of-the-art equipment that
  positions  us well to meet the demands by  manufacturers  for even  shorter lead
  times, consistently reliable delivery schedules and appealing designs."
  
        Culp added,  "We are  encouraged by the positive  momentum in market share
  that  is  being   generated   by  the   successful   new  designs  that  we  are
  introducing.  Placements  of our fabrics by U.S.  manufacturers  of  residential
  furniture over the last several markets have been  gratifying;  and as a result,
  we are seeing a firming in  incoming  orders from this  portion of our  business
  as well as in  mattress  ticking.  Some of this  improvement  is  being  offset,
  however,  by continued  weakness in our  international  sales. The high value of
  the dollar  relative to other  currencies  is making it very  difficult for Culp
  and other U.S.-based  manufacturers  to compete  profitably in the major markets
  outside the United States and Canada.
  
        "We  generated  $4.4  million  in cash from  operations  during  the first
  quarter that allowed us to continue  strengthening  our balance sheet.  Our debt
  of $110.7  million at the close of the quarter was down $26.2  million,  or 19%,
  from a year  ago;  and our  debt/capital  ratio of 48% was at its  lowest  level
  since July 1997.  Our capital  expenditures  for fiscal 2002 remain  targeted at
  approximately $4 million compared with $8.1 million in fiscal 2001."
  
        Culp, Inc. is one of the world's largest  marketers of upholstery  fabrics
  for furniture  and is a leading  marketer of mattress  ticking for bedding.  The
  company's  fabrics are used  principally in the  production of  residential  and
  commercial furniture and bedding products.
  
        This  release  contains  statements  that may be  deemed  "forward-looking
  statements"  within the meaning of the federal  securities  laws,  including the
  Private   Securities   Litigation  Reform  Act  of  1995.  Such  statements  are
  inherently  subject to risks and uncertainties.  Forward-looking  statements are
  statements  that  include  projections,  expectations  or beliefs  about  future
  events or results or otherwise  are not  statements  of  historical  fact.  Such
  statements  are  often  characterized  by  qualifying  words  such as  "expect,"
  "believe,"  "estimate,"  "plan" and  "project"  and their  derivatives.  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.  Decreases  in
  these  economic  indicators  could  have a  negative  effect  on  the  company's
  business and  prospects.  Likewise,  increases in interest  rates,  particularly
  home  mortgage  rates,  and  increases  in consumer  debt or the general rate of
  inflation,  could  affect the  company  adversely.  Because  of the  significant
  percentage  of  the  company's  sales  derived  from  international   shipments,
  strengthening  of the  U.S.  dollar  against  other  currencies  could  make the
  company's  products less  competitive  on the basis of price in markets  outside
  the  United  States.   Additionally,   economic  and  political  instability  in
  international areas could affect the demand for the company's products.
  
                                     CULP, INC.
                           Condensed Financial Highlights
  (Unaudited)
                                                      Three Months Ended
                                               --------------------------------
                                                  July 29,          July 30,
                                                    2001              2000
                                               ---------------   --------------
  Net sales                                    $   86,463,000    $ 101,878,000
  Net (loss)                                   $   (2,882,000)   $  (1,756,000)
  Net (loss) per share:
    Basic                                      $        (0.26)   $       (0.16)
    Diluted                                    $        (0.26)   $       (0.16)
  Net (loss) per diluted share, excluding
    restructuring and related charges*         $        (0.12)   $       (0.16)
  Average shares outstanding:
    Basic                                          11,221,000       11,209,000
    Diluted                                        11,221,000       11,209,000
  
  * Excludes  restructuring  and related  charges for the three  months ended July
    29, 2001 of $2.3  million  ($1.5  million,  or $0.14 per share  diluted  after
    taxes).
  
                                         -END-
  CULP, INC. FINANCIAL INFORMATION RELEASE
                           CONSOLIDATED STATEMENTS OF LOSS
             FOR THE THREE MONTHS ENDED JULY 29, 2001 AND JULY 30, 2000
  
                  (Amounts in Thousands, Except for Per Share Data)
  THREE MONTHS ENDED (UNAUDITED)
                                              --------------------------------------------------------------------
                                                       Amounts                                  Percent of Sales
                                              -------------------------                    -------------------------
                                                July 29,     July 30,       % Over
                                                  2001         2000        (Under)            2002         2001
                                              -----------  ------------  -----------       -----------  ------------
  Net sales                                $      86,463       101,878       (15.1)%          100.0 %       100.0 %
  Cost of sales                                   75,674        87,704       (13.7)%           87.5 %        86.1 %
                                              -----------  ------------  -----------       -----------  ------------
          Gross profit                            10,789        14,174       (23.9)%           12.5 %        13.9 %
  
  Selling, general and
    administrative expenses                       11,235        13,778       (18.5)%           13.0 %        13.5 %
  Restructuring expense                            1,303             0       100.0 %            1.5 %         0.0 %
                                              -----------  ------------  -----------       -----------  ------------
          Income (loss) from operations           (1,749)          396      (541.7)%           (2.0)%         0.4 %
  
  Interest expense                                 2,068         2,323       (11.0)%            2.4 %         2.3 %
  Interest income                                    (23)           (7)      228.6 %           (0.0)%        (0.0)%
  Other expense (income), net                        572           741       (22.8)%            0.7 %         0.7 %
                                              -----------  ------------  -----------       -----------  ------------
          Loss before income taxes                (4,366)       (2,661)      (64.1)%           (5.0)%        (2.6)%
  
  Income taxes  *                                 (1,484)         (905)      (64.0)%           34.0 %        34.0 %
                                              -----------  ------------  -----------       -----------  ------------
          Net loss                          $     (2,882)       (1,756)      (64.1)%           (3.3)%        (1.7)%
                                              ===========  ============  ===========       ===========  ============
  
  Net loss per share                              ($0.26)       ($0.16)      (62.5)%
  Net loss per share, assuming dilution           ($0.26)       ($0.16)      (62.5)%
  Net loss per share, excluding restructuring
    and related charges  **                       ($0.12)       ($0.16)       25.0 %
  Dividends per share                               $0.0        $0.035      (100.0)%
  Average shares outstanding                      11,221        11,209         0.1 %
  Average shares outstanding, assuming dilution   11,221        11,209         0.1 %
  *  Percent of sales column is calculated as a % of loss before income taxes.
  ** Excludes restructuring and related  charges in 2002 of $2.3 million ($1.5
     million or $0.14 per share diluted, after taxes)
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                            CONSOLIDATED BALANCE SHEETS
                                  JULY 29, 2001, JULY 30, 2000, AND APRIL 29, 2001
                                                     Unaudited
                                               (Amounts in Thousands)
  Amounts                         Increase
                                           ---------------------------------          (Decrease)
                                               July 29,         July 30,      ---------------------------- *April 29,
                                                 2001             2000         Dollars        Percent        2001
                                            ----------------  -------------  -------------    -----------  ---------
  Current assets
        Cash and cash investments             $         549          1,654       (1,105)      (66.8) %       1,207
        Accounts receivable                          52,353         58,851       (6,498)      (11.0) %      57,849
        Inventories                                  59,006         74,600      (15,594)      (20.9) %      59,997
        Other current assets                          9,893         11,565       (1,672)      (14.5) %       7,856
                                            ----------------  ------------- -------------    -----------  ---------
                  Total current assets              121,801        146,670      (24,869)      (17.0) %     126,909
  
  Property, plant & equipment, net                  109,417        123,636      (14,219)      (11.5) %     112,322
  Goodwill                                           48,129         49,525       (1,396)       (2.8) %      48,478
  Other assets                                        1,711          6,652       (4,941)      (74.3) %       1,871
                                            ----------------  ------------- -------------    -----------  ---------
  
                  Total assets                $     281,058        326,483      (45,425)      (13.9) %     289,580
                                            ================  ============= =============    ===========  =========
  
  Current liabilities
        Current maturities of long-term debt  $       2,130          1,678          452        26.9  %       2,488
        Accounts payable                             24,773         24,942         (169)       (0.7) %      27,371
        Accrued expenses                             16,494         19,762       (3,268)      (16.5) %      17,153
        Income taxes payable                              0              0            0         0.0  %       1,268
                                            ----------------  ------------- -------------    -----------  ---------
                  Total current liabilities          43,397         46,382       (2,985)       (6.4) %      48,280
  
  Long-term debt                                    108,522        135,150      (26,628)      (19.7) %     109,168
  Deferred income taxes                              10,330         17,459       (7,129)      (40.8) %      10,330
                                            ----------------  ------------- -------------    -----------  ---------
                  Total liabilities                 162,249        198,991      (36,742)      (18.5) %     167,778
  
  Shareholders' equity                              118,809        127,492       (8,683)       (6.8) %     121,802
                                            ----------------  ------------- -------------    -----------  ---------
  
                  Total liabilities and
                  shareholders' equity        $     281,058        326,483      (45,425)      (13.9) %     289,580
                                            ================  ============= =============    ===========  =========
  
  Shares outstanding                                 11,221         11,209           12         0.1  %      11,221
                                            ================  ============= =============    ===========  =========
  *  Derived from audited financial statements.
  CULP, INC.
                            FINANCIAL INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE THREE MONTHS ENDED JULY 29, 2001 AND JULY 30, 2000
                                      Unaudited
  
                               (Amounts in Thousands)
  THREE MONTHS ENDED
                                                                        -------------------------
                                                                                Amounts
                                                                        -------------------------
                                                                         July 29,     July 30,
                                                                           2001         2000
                                                                        ------------ ------------
  Cash flows from operating activities:
      Net  loss                                                     $       (2,882)      (1,756)
      Adjustments to reconcile net loss to net cash
         provided by operating activities:
            Depreciation                                                     4,473        5,060
            Amortization of intangible assets                                  393          399
            Amortization of deferred compensation                              (13)          63
            Restructuring expense                                            1,303            0
            Changes in assets and liabilities:
               Accounts receivable                                           5,496       16,372
               Inventories                                                     991         (129)
               Other current assets                                         (1,987)      (1,216)
               Other assets                                                     (3)         147
               Accounts payable                                               (123)      (6,886)
               Accrued expenses                                             (1,957)      (2,409)
               Income taxes payable                                         (1,268)           0
                                                                        ------------ ------------
                  Net cash provided by operating activities                  4,423        9,645
                                                                        ------------ ------------
  Cash flows from investing activities:
      Capital expenditures                                                  (1,602)      (2,289)
      Purchase of investments to fund deferred compensation liability            0         (200)
                                                                        ------------ ------------
                  Net cash used in investing activities                     (1,602)      (2,489)
                                                                        ------------ ------------
  Cash flows from financing activities:
      Proceeds from issuance of long-term debt                                  16            0
      Principal payments on long-term debt                                  (1,020)        (658)
      Change in accounts payable-capital expenditures                       (2,475)      (5,459)
      Dividends paid                                                             0         (392)
                                                                        ------------ ------------
                  Net cash used in financing activities                     (3,479)      (6,509)
                                                                        ------------ ------------
  
  Increase (decrease) in cash and cash investments                            (658)         647
  
  Cash and cash investments at beginning of period                           1,207        1,007
                                                                        ------------ ------------
  
  Cash and cash investments at end of period                        $          549        1,654
                                                                        ============ ============
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL ANALYSIS
                                    JULY 29, 2001
  FISCAL 01                             FISCAL 02
                                              -------------   -------------------------------------------------------   --------------
                                                   Q1                Q1            Q2            Q3             Q4           LTM (4)
                                              -------------   -------------------------------------------------------   --------------
  INVENTORIES
          Inventory turns                             4.7               5.1
  
  RECEIVABLES
          Days sales in  receivables                   49                51
          Percent current & less
            than 30 days past due                   91.5%             91.9%
  
  WORKING CAPITAL
          Current ratio                               3.2               2.8
          Working capital turnover (3)                4.3               4.1
          Operating working capital (3)          $108,509           $86,586
  
  PROPERTY, PLANT & EQUIPMENT
          Depreciation rate                          8.0%              7.2%
          Percent property, plant &
            equipment are  depreciated              51.1%             56.2%
          Capital expenditures                     $8,050 (1)        $1,602
  
  PROFITABILITY
          Return on average total capital          (0.3%)            (2.7%)                                                    (1.5%)
          Return on average equity                 (5.5%)            (9.6%)                                                    (7.6%)
          Net loss per share                      ($0.16)           ($0.26)                                                   ($0.84)
          Net loss per share (diluted)            ($0.16)           ($0.26)                                                   ($0.84)
          Net loss per share, excluding
            restructuring and related charges (6) ($0.16)           ($0.12)                                                   ($0.27)
  
  LEVERAGE
          Total liabilities/equity                 156.1%            136.6%
          Funded debt/equity                       107.3%             93.1%
          Funded debt/capital employed              51.8%             48.2%
          Funded debt                            $136,828          $110,652
          Funded debt/EBITDA (LTM) (5)               3.44              4.26
  
  OTHER
          Book value per share                     $11.37            $10.59
          Employees at quarter end                  3,722             3,018
          Sales per employee (annualized)        $108,000          $113,000
          Capital employed                       $264,320          $229,461
          Effective income tax rate                 34.0%             34.0%
          EBITDA (2)                               $5,177            $4,814                                                   $25,135
          EBITDA/net sales (2)                       5.1%              5.6%                                                      6.4%
  (1) Expenditures for entire year.
    (2) Earnings before interest, income taxes, depreciation, amortization and all
        restructuring and related charges, non-cash or cash.
    (3) Working capital for this calculation is accounts receivable,inventories
        and accounts payable.
    (4) LTM represents "Latest Twelve Months"
    (5) EBITDA includes capitalized interest and certain cash and non-cash
        charges, as defined by the company's credit agreement.
    (6) Excludes restructuring and related charges in the first quarter of 2002 of
        $2.3 million ($1.5 million or $0.14 per share diluted, after taxes)
        and $9.7 million ($6.4 million or $0.57 per share diluted, after taxes)
        for the last twelve months.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                              SALES BY SEGMENT/DIVISION
             FOR THE THREE MONTHS ENDED JULY 29, 2001 AND JULY 30, 2000
  
                               (Amounts in thousands)
  THREE MONTHS ENDED (UNAUDITED)
                                  -------------------------------------------------------------
                                        Amounts                         Percent of Total Sales
                                  ---------------------                 -----------------------
                                  July 29,   July 30,       % Over
  Segment/Division                  2001       2000         (Under)     2002         2001
  ------------------------------  ---------- ----------   ------------  ----------  -----------
  Upholstery Fabrics
      Culp Decorative Fabrics   $    35,160     41,533     (15.3) %       40.7 %       40.8 %
      Culp Velvets/Prints            25,520     30,074     (15.1) %       29.5 %       29.5 %
      Culp Yarn                         967      3,319     (70.9) %        1.1 %        3.3 %
                                  ---------- ----------   ------------  ----------  -----------
                                     61,647     74,926     (17.7) %       71.3 %       73.5 %
  
  Mattress Ticking
      Culp Home Fashions             24,816     26,952      (7.9) %       28.7 %       26.5 %
                                  ---------- ----------   ------------  ----------  -----------
  
                              * $    86,463    101,878     (15.1) %      100.0 %      100.0 %
                                  ========== ==========   ============  ==========  ===========
  * U.S.  sales were $71,800 and $82,290 for the first  quarter of fiscal 2002 and
  fiscal 2001,  respectively.  The percentage decrease in U.S. sales was 12.7% for
  the first quarter.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                       INTERNATIONAL SALES BY GEOGRAPHIC AREA
             FOR THE THREE MONTHS ENDED JULY 29, 2001 AND JULY 30, 2000
  (Amounts in thousands)
  
                                                     THREE MONTHS ENDED (UNAUDITED)
                                   -------------------------------------------------------------------
                                            Amounts                           Percent of Total Sales
                                   --------------------------                -------------------------
                                    July 29,      July 30,       % Over
        Geographic Area               2001          2000        (Under)         2002          2001
  ----------------------------     ------------  ------------  -----------   -----------    ----------
  North America (Excluding USA)   $      8,052         8,395    (4.1) %         54.9 %       42.9 %
  Europe                                   705         1,452   (51.4) %          4.8 %        7.4 %
  Middle East                            2,903         5,043   (42.4) %         19.8 %       25.7 %
  Far East & Asia                        2,570         3,236   (20.6) %         17.5 %       16.5 %
  South America                            159           306   (48.0) %          1.1 %        1.6 %
  All other areas                          274         1,156   (76.3) %          1.9 %        5.9 %
                                   ------------  ------------  -----------   -----------    ----------
  
                                  $     14,663        19,588   (25.1) %        100.0 %      100.0 %
                                   ============  ============  ===========   ===========    ==========
  International  sales,  and the  percentage of total sales,  for each of the last
  five fiscal years follows:  fiscal  1997-$101,571  (25%);  fiscal  1998-$137,223
  (29%);  fiscal  1999-$113,354  (23%);  fiscal  2000-$111,104  (23%);  and fiscal
  2001-$77,824 (19%).  International sales for the first quarter represented 17.0%
  and 19.2% for 2002 and 2001, respectively.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
             for the three months ended July 29, 2001 and July 30, 2000
  
  INCOME STATEMENT COMMENTS
  
       GENERAL  - For the  first  quarter,  net  sales  decreased  15.1%  to $86.5
  million; and the company reported a net loss of $2.9 million, or $0.26 per share
  diluted (based on 11,221,000  average shares  outstanding)  versus a net loss of
  $1.8 million,  or $0.16 per share diluted  (based on 11,209,000  average  shares
  outstanding) in the first quarter of fiscal 2001.  Without the restructuring and
  related  charges,  the loss for the first quarter of fiscal 2002 would have been
  $1.4 million, or $0.12 per share diluted. As described below in "SG&A EXPENSES,"
  an additional  significant  factor affecting the first quarter loss was bad debt
  expense of $800,000, or $.05 per share on an after-tax basis. This compares with
  an expense of $45,000 for first quarter of 2001.
  
       The company's  long-term,  strategic plan encompasses  several  competitive
  initiatives:
  
       Broad Product  Offering - continuing to market one of the broadest  product
       lines in upholstery fabrics and mattress ticking,  consistent with customer
       demand.  Through  its  extensive  manufacturing  capabilities,  the company
       competes in most major categories except leather;
  
       Diverse  Customer Base - maintaining a diverse  customer  base. The company
       has  long-standing  relationships  with  most  major  upholstery  furniture
       manufacturers.  Ownership of resources in the home furnishings  industry is
       becoming increasingly  concentrated,  and the company has successfully been
       able to  capitalize  on its size and product  breadth to supply more of the
       needs of existing  customers.  One customer accounted for approximately 11%
       of net sales during fiscal 2001.  Culp is pursuing  opportunities  in other
       end-use markets in addition to U.S. residential furniture, such as bedding,
       international, commercial furniture and juvenile furniture;
  
       Design  Innovation  -  supplying  fabrics  that are  fashionable  and match
       current consumer preferences.  The company's principal design resources are
       consolidated  in a  single  facility  that has  advanced  computer-assisted
       design  systems and promotes  sharing of innovative  designs across product
       lines.  Culp encourages  active  customer  involvement in the entire design
       process; and
  
       Vertical  Integration - operating as a vertically  integrated  manufacturer
       and  taking  advantage  of  economies,  quality,  supply  availability  and
       efficiencies  that can be gained by producing  the raw material  components
       that are used in the manufacture of its products.
  
       RESTRUCTURING  ACTIONS  - During  fiscal  2001,  the  company  initiated  a
  restructuring plan intended to lower operating expenses,  increase manufacturing
  utilization,  raise  productivity and position the company to operate profitably
  within  the  current  environment  of  reduced  demand.  The plan  involved  the
  consolidation  of  certain  fabric   manufacturing   capacity  within  the  Culp
  Decorative   Fabrics   division,   closing  one  of  the  company's   four  yarn
  manufacturing  plants within Culp Yarn,  and an extensive  reduction in selling,
  general  and  administrative  expenses.  The  company  also  recognized  certain
  inventory  write-downs  related  to  the  closed  facilities  as  part  of  this
  initiative.  The  total  charge  from  the  restructuring,  cost  reduction  and
  inventory write-down  initiatives is expected to total $10.0 million, about $3.6
  million of which represents  non-cash items.  This includes an additional amount
  of $1.3 million resulting from  re-evaluating  restructuring  costs in the first
  quarter of fiscal 2002,  principally related to health care costs for terminated
  personnel.  The company  recognized  $7.4 million of  restructuring  and related
  charges during fiscal 2001 and $2.3 million in the first quarter of fiscal 2002.
  Management  expects to record the  remaining  charges,  estimated  at  $150,000,
  during  the  second  quarter  of  fiscal  2002.  The  company  plans to  realize
  annualized cost reductions of at least $14 million when the full benefit of this
  program is  realized.  For the first  quarter,  the  restructuring  and  related
  charges  are  recorded  as  follows:  $1.3  million  in  the  line  item  called
  "Restructuring  expense" and $1.0 million in Cost of sales.  The costs reflected
  in Cost of sales are  principally  related to the  relocation  of  manufacturing
  equipment.
  
       Management  believes the company now has a sound  footprint  of  efficient,
  world-class facilities utilizing  state-of-the-art  equipment that positions the
  company well to meet the demands by  manufacturers  for even shorter lead times,
  consistently reliable delivery schedules and appealing designs.
  
       NET SALES - Compared  with fiscal  2001,  upholstery  fabric  sales for the
  first  quarter of fiscal 2002  decreased  17.7% to $61.6  million,  and mattress
  ticking sales  decreased  7.9% to $24.8  million (See Sales by  Segment/Division
  schedule on Page 5). The upholstery fabric sales decrease reflects:  (1) a sharp
  reduction  (24.9%,  or  $3.8  million)  in  international   sales,   principally
  reflecting  the  high  value  of  the  U.S.  dollar  relative  to  international
  currencies; (2) a decrease in external yarn sales (70.9% or $2.4 million) due to
  the company's  internal  consumption of more of the yarn  division's  output and
  exit from certain  yarn  businesses  as part of the  restructuring  plan;  (3) a
  decrease in sales to contract furniture customers ($1.2 million), and (4) a more
  moderate decrease (11.6% or $5.9 million) in sales to U.S. residential furniture
  manufacturers. The company believes that it is improving its market share in the
  U.S. residential market because of well-received fabric placements from the Culp
  Decorative Fabrics and Culp  Velvets/Prints  divisions.  The decline in sales in
  this category is attributed to general market conditions, and the sales decrease
  in mattress ticking also reflects an overall  slowdown in  industry-wide  demand
  for bedding in the U.S.
  
       The company  had  previously  announced  that it did not expect to report a
  profit for the first quarter,  excluding  restructuring and related charges. Key
  factors  influencing  the  year-to-year  comparison  were the sharp,  persistent
  weakness in consumer spending on home furnishings, especially in the promotional
  price  category,  and the strength in the U.S. dollar that had an adverse impact
  on exports.
  
       Although industry conditions remain  challenging,  incoming orders early in
  the second  quarter for  mattress  ticking and from U.S.  residential  furniture
  customers  are showing some  improvement.  Based on this trend,  Culp expects to
  operate its manufacturing capacity at a higher level of output than in the first
  quarter. Any increase in demand from U.S. manufacturers of residential furniture
  will be offset in part by a  continued  decline in  international  and  contract
  orders.
  
       GROSS PROFIT - Gross profit included  restructuring related charges of $1.0
  million.  Excluding  these  charges,  gross profit  declined 17.0% for the first
  quarter of fiscal 2002 compared with the year-earlier  period and decreased as a
  percentage  of net sales  from  13.9% to 13.6%.  The  decline  in gross  profit,
  excluding restructuring related charges, of $2.4 million was attributable to the
  Culp Decorative Fabrics ("CDF") division.  The principal factors contributing to
  the decrease were: (1) the decline in sales volume, and (2) lower  manufacturing
  productivity due to the consolidation  activities within the division during the
  quarter.  The company has taken  significant  steps to improve  productivity and
  increase  output in the CDF  division  over the last six  months.  Although  the
  company expects to see improving results from these  restructuring  steps in the
  second  quarter for CDF, it does not expect to realize the full benefit of these
  actions  until the second half of fiscal  2002.  The company  experienced  gross
  margin  improvement in each of its other  divisions,  even while reporting lower
  sales in those divisions.
  
       SG&A EXPENSES - SG&A expenses for the first quarter declined 18.5% from the
  prior year.  Reflecting the impact of the company's  actions to reduce expenses,
  SG&A  expenses  declined  from  13.5% to 13.0% as a  percentage  of sales.  SG&A
  expenses in the first quarter include bad debt expense of $800,000 compared with
  $45,000 in the year-earlier period. The increase in bad debt expense from a year
  ago  reflects  write-offs  primarily  of two  residential  furniture  customers.
  Without the  additional  bad debt  expense,  SG &A expenses were reduced by $3.3
  million, or 23.9%, and were 12.1% of net sales.
  
       INTEREST  EXPENSE - Interest  expense for the first  quarter  declined from
  $2.3 million to $2.1 million due to significantly lower borrowings  outstanding,
  offset  somewhat  by a  substantial  increase  in  interest  rates (see  amended
  interest rate matrix in the "LONG-TERM DEBT" paragraph on page 9).
  
       OTHER EXPENSE (INCOME),  NET - Other expense (income) for the first quarter
  of fiscal 2002 totaled  $572,000  compared with $741,000 in the prior year.  The
  decrease was principally due to the company's deferred  compensation plan, which
  was  terminated  in  January  2001 as a part  of the  company's  cost  reduction
  initiative.
  
       INCOME TAXES - The  effective tax rate for the first quarter of fiscal 2002
  was 34.0%, unchanged from the prior year.
  
       EBITDA - EBITDA  for the  first  quarter  of fiscal  2002 was $4.8  million
  compared with $5.2 million in the prior year. EBITDA excludes  interest,  income
  taxes,  depreciation,  amortization,  and all restructuring and related charges,
  non-cash or cash.
  
  BALANCE SHEET COMMENTS
  
       WORKING  CAPITAL - Accounts  receivable as of July 29, 2001 decreased 11.0%
  from the year-earlier level, due principally to the decline in sales. Days sales
  outstanding  totaled 51 days at July 29, 2001  compared  with 49 a year ago. The
  aging of accounts  receivable  was 91.9%  current and less than 30 days past due
  versus 91.5% a year ago. Inventories at the close of the first quarter decreased
  20.9% from a year ago. Inventory turns for the first quarter were 5.1 versus 4.7
  for the year-earlier  period.  Operating working capital  (comprised of accounts
  receivable,  inventory and accounts payable) was $86.6 million at July 29, 2001,
  down from $108.5 million a year ago.
  
       PROPERTY,  PLANT AND EQUIPMENT - Capital  spending for the first quarter of
  fiscal  2002  declined  to  $1.6  million  compared  with  $2.3  million  in the
  year-earlier  period.  The company's budget for capital spending for fiscal 2002
  is $4.0 million, compared with $8.1 million in fiscal 2001. Depreciation for the
  first quarter of fiscal 2002 totaled $4.5 million.
  
       LONG-TERM  DEBT - The company has reduced  funded debt by $26.2  million or
  19.1% from the first quarter of last year,  and by $1.0 million from last fiscal
  year end. Funded debt equals long-term debt plus current maturities. Funded debt
  was $110.7 million at July 29, 2001, compared with $136.8 million a year ago and
  $111.7 million at fiscal year end. Compared with 51.8% a year ago, the company's
  funded  debt-to-capital ratio was 48.2% at July 29, 2001, its lowest level since
  July 1997.  During  fiscal  2001,  the company  amended  its credit  facility to
  include terms that restrict the payment of cash dividends and share  repurchases
  at this time,  limit  capital  expenditures,  increase the interest  rate on its
  revolving credit facility from LIBOR plus 1.60% to LIBOR plus 4.00% and increase
  the  letter of credit  fees on IRBs from  1.10% to  4.00%.  The  amended  credit
  facility  lowered  the amount of funds  available  under the  facility  from $88
  million to $25 million. The company had outstanding  borrowings of approximately
  $1 million  under the  facility at the end of the first  quarter of fiscal 2002.
  The company was in  compliance  with its loan  agreements  as of July 29,  2001.
  Other than the credit facility, required principal payments under the respective
  loan  agreements  during  fiscal  2002 and fiscal 2003 total  $473,000  and $2.2
  million, respectively.