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) November 12, 1997
  
                                     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)
                                  (910) 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 (11
  pages),  both dated November 12, 1997,  related to the quarter ended November 2,
  1997.
  
  Forward  Looking  Information.  The  discussion  in this  Form  8-K may  contain
  statements that could be deemed forward-looking statements, which are inherently
  subject to risks and uncertainties.  These 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
  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 adversely affect the company.
  
  
  
  
  
                                    SIGNATURES
  
  
  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
                                       Senior Vice President and
                                       Chief Financial Officer
  
  
                                By:    Stephen T. Hancock
                                       Stephen T. Hancock
                                       General Accounting Manager
  
  
  
  
  Dated:   November 12,  1997
  
  <PAGE>
  
  
  Culp Reports Second Quarter Gains
  Page 2
  November 12, 1997
  
  
  
  
  
  
  FOR IMMEDIATE RELEASE
  
              CULP REPORTS INCREASED SECOND QUARTER SALES AND EARNINGS
   
                  NET INCOME RISES 21% TO NEW SECOND-QUARTER RECORD
  
  HIGH POINT, N.C. (November 12, 1997) Culp, Inc. (NYSE: CFI) today reported sales
  and earnings for the second quarter and first half of its 1998 fiscal year.
  
  For the three  months  ended  November  2, 1997,  Culp  reported  that net sales
  increased 17% to $122.9  million  compared  with $105.2  million a year ago. Net
  income for the quarter increased 21% to $4.5 million compared with $3.7 million.
  Earnings  per  share  increased  9% to  $0.36  on 12.7  million  average  shares
  outstanding versus $0.33 per share on 11.3 million average shares outstanding.
  
  The gains for the second quarter  brought net sales for the first half to $222.4
  million,  up 14% from $195.7 million in the first six months of fiscal 1997. Net
  income for the first half increased to $7.4 million  compared with $5.9 million.
  Earnings per share rose 12% to $0.58 on 12.6 million average shares  outstanding
  versus  $0.52  per  share on 11.3  million  average  shares  outstanding  in the
  year-earlier period.
  
  The increase of 12% in the average number of shares  outstanding  for the second
  quarter  and first six months was due  principally  to the  Company's  secondary
  offering completed in February 1997.
  
  The Company noted that $10.7 million of the increase in net sales for the second
  quarter is attributable to the Phillips Mills  acquisition,  which was completed
  at the beginning of the second quarter.
  
  "These results marked the 20th consecutive quarter of record earnings versus the
  comparable  year-earlier  period,"  said Robert G. Culp,  III,  chief  executive
  officer.  "We are  particularly  pleased  with the higher net sales and earnings
  considering the slower growth in demand that we have  experienced  thus far this
  year,  particularly for certain categories of upholstery fabrics from U.S.-based
  residential  furniture  customers.  We had not expected business to be as robust
  this year, and our results appear generally to mirror  industry-wide  trends. We
  did  achieve  a 10% gain in sales  to  U.S.-based  accounts  during  the  second
  quarter, aided by continuing gains from our Home Fashions business unit, and the
  incremental  sales from the Phillips  Mills  acquisition.  Our sales of mattress
  ticking  are up  significantly  from a year ago,  reflecting  the success of the
  wider variety of new textures and patterns that we are  introducing.  Sales from
  our Home  Fashions  group  are  also  benefiting  from  Culp's  ongoing  capital
  investment  program  and,  in  particular,   projects  that  have  substantially
  increased our capacity for  manufacturing  wide jacquard  unfinished  goods. The
  success we are having in expanding this portion of our business  relates both to
  the  value  of our new  designs  and a  consistent  ability  to meet  customers'
  delivery schedules."
  
                                       -MORE-
  
  <PAGE>
  
  
  
  Culp  added,  "The  momentum in our  international  business  remains  positive.
  Shipments to customers  outside the United  States  increased 36% for the second
  quarter and accounted for 29% of net sales.  We are  benefiting  from a stronger
  competitive  presence in established  markets such as Europe and the Middle East
  and from greater  penetration  into faster growing  regions such as Asia and the
  Far East.
  
  "A highlight of Culp's  progress thus far in fiscal 1998 has been the results of
  our ongoing initiative to pursue complementary acquisitions. The performance for
  the second quarter includes the initial contribution from the assets we acquired
  from Phillips Mills in August. The assimilation of these additional resources is
  proceeding as planned. A main factor driving that transaction was the ability to
  broaden our marketing  base,  especially  in  upholstery  fabrics for motion and
  other casual  styles of furniture.  The  agreement  signed last month to acquire
  Artee  Industries  principally  represents  a  means  to  further  our  vertical
  integration.  The addition of Artee's  WrapSpun TM,  open-end  spun and chenille
  yarns  will also  support  the  accelerated  design  initiatives  of each of our
  business units to produce fabrics that embody innovative textures and styles. An
  important  aspect  of  our  strategic  planning  is  maintaining  the  financial
  resources  that  will  enable  us to  consider  future  opportunities  for other
  acquisitions."
  
  Culp,  Inc. is the  world's  largest  manufacturer  and  marketer of  upholstery
  fabrics for furniture and is a leading producer of mattress ticking for bedding.
  The Company's  fabrics are used primarily in the  production of residential  and
  commercial furniture and bedding products.
  
                                     CULP, INC.
                           Condensed Financial Highlights
                                     (Unaudited)
                                               Three Months Ended
                                   ---------------------------------------------
                                        November 2,               October 27,
                                           1997                      1996
                                   --------------------      -------------------
  Net sales                        $        122,926,000      $       105,204,000
  Net income                       $          4,505,000      $         3,710,000
  Earnings per share               $               0.36      $              0.33
  Average shares outstanding                 12,668,000               11,312,000
  
                                                Six Months Ended                
                                   --------------------------------------------- 
                                         November 2,               October 27,
                                            1997                      1996
                                   ---------------------      ------------------
  Net sales                        $        222,424,000      $       195,733,000
  Net income                       $          7,355,000      $         5,920,000
  Earnings per share               $               0.58      $              0.52
  Average shares outstanding                 12,649,000               11,304,000
  
  
  
                                        -END-
  
  
  
  
  
  
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                           CONSOLIDATED INCOME STATEMENTS
   FOR THE THREE MONTHS AND SIX MONTHS ENDED NOVEMBER 2, 1997 AND OCTOBER 27, 1996
  
                  (Amounts in Thousands, Except for Per Share Data)
  
  <TABLE>
  <CAPTION>
                                                        THREE MONTHS ENDED (UNAUDITED)
                                     ----------------------------------------------------------------------
  
                                              Amounts                                  Percent of Sales
                                     --------------------------                    --------------------------
                                     November 2,   October 27,     % Over
                                        1997          1996         (Under)           1998          1997
                                     ------------  ------------  ------------      ------------  ------------
  
  <S>                             <C>                 <C>             <C>              <C>           <C>    
  Net sales                       $      122,926       105,204        16.8 %           100.0 %       100.0 %
  Cost of sales                          100,191        86,082        16.4 %            81.5 %        81.8 %
                                     ------------  ------------  ------------      ------------  ------------
          Gross profit                    22,735        19,122        18.9 %            18.5 %        18.2 %
  
  Selling, general and
    administrative expenses               13,632        11,704        16.5 %            11.1 %        11.1 %
                                     ------------  ------------  ------------      ------------  ------------
          Income from operations           9,103         7,418        22.7 %             7.4 %         7.1 %
  
  Interest expense                         1,820         1,242        46.5 %             1.5 %         1.2 %
  Interest income                           (72)          (60)        20.0 %           (0.1) %       (0.1) %
  Other expense (income), net                425           301        41.2 %             0.3 %         0.3 %
                                     ------------  ------------  ------------      ------------  ------------
          Income before income taxes       6,930         5,935        16.8 %             5.6 %         5.6 %
  
  Income taxes  *                          2,425         2,225         9.0 %            35.0 %        37.5 %
                                     ------------  ------------  ------------      ------------  ------------
          Net income              $        4,505         3,710        21.4 %             3.7 %         3.5 %
                                     ============  ============  ============      ============  ============
  
  Average shares outstanding              12,668        11,312        12.0 %
  Net income per share                     $0.36         $0.33         9.1 %
  Dividends per share                    $0.0350       $0.0325         7.7 %
  
  </TABLE>
  <TABLE>
  <CAPTION>
  
  
                                                         SIX MONTHS ENDED (UNAUDITED)
                                     ----------------------------------------------------------------------
  
                                              Amounts                                  Percent of Sales
                                     --------------------------                    --------------------------
                                     November 2,   October 27,     % Over
                                        1997          1996         (Under)           1998          1997
                                     ------------  ------------  ------------      ------------  ------------
  
  <S>                             <C>                 <C>            <C>               <C>           <C>    
  Net sales                       $      222,424       195,733        13.6 %           100.0 %       100.0 %
  Cost of sales                          182,956       160,691        13.9 %            82.3 %        82.1 %
                                     ------------  ------------  ------------      ------------  ------------
          Gross profit                    39,468        35,042        12.6 %            17.7 %        17.9 %
  
  Selling, general and
    administrative expenses               24,548        22,568         8.8 %            11.0 %        11.5 %
                                     ------------  ------------  ------------      ------------  ------------
          Income from operations          14,920        12,474        19.6 %             6.7 %         6.4 %
  
  Interest expense                         3,100         2,424        27.9 %             1.4 %         1.2 %
  Interest income                           (162)         (117)       38.5 %            (0.1) %       (0.1) %
  Other expense (income), net                667           696        (4.2) %            0.3 %         0.4 %
                                     ------------  ------------  ------------      ------------  ------------
          Income before income taxes      11,315         9,471        19.5 %             5.1 %         4.8 %
  
  Income taxes  *                          3,960         3,551        11.5 %            35.0 %        37.5 %
                                     ------------  ------------  ------------      ------------  ------------
          Net income              $        7,355         5,920        24.2 %             3.3 %         3.0 %
                                     ============  ============  ============      ============  ============
  
  Average shares outstanding              12,649        11,304        11.9 %
  Net income per share                     $0.58         $0.52        11.5 %
  Dividends per share                    $0.0700       $0.0650         7.7 %
  
   * Percent of sales column is calculated as a % of income before income taxes.
  
  </TABLE>
  
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                             CONSOLIDATED BALANCE SHEETS
                NOVEMBER 2, 1997, OCTOBER 27, 1996 AND APRIL 27, 1997
  
                          (Unaudited, Amounts in Thousands)
  
  <TABLE>
  <CAPTION>
                                                         Amounts                  Increase
                                               ----------------------------
                                                November 2,    October 27,       (Decrease)        * April 27,
                                                                           ------------------------
                                                   1997           1996      Dollars       Percent     1997
                                               --------------  ----------- -----------    --------- --------
  Current assets
  <S>                                        <C>                  <C>         <C>         <C>       <C>
       Cash and cash investments             $         1,209          744         465      62.5 %       830
       Accounts receivable                            74,314       52,202      22,112      42.4 %    56,691
       Inventories                                    70,192       52,300      17,892      34.2 %    53,463
       Other current assets                            6,136        3,697       2,439      66.0 %     5,450
                                               --------------  ----------- -----------    --------- --------
                Total current assets                 151,851      108,943      42,908      39.4 %   116,434
  
  Restricted investments                               8,258        5,379       2,879      53.5 %    11,018
  Property, plant & equipment, net                   107,377       80,316      27,061      33.7 %    91,231
  Goodwill                                            49,778       22,568      27,210     120.6 %    22,262
  Other assets                                         3,715        2,321       1,394      60.1 %     3,007
                                               --------------  ----------- -----------    --------- --------
  
                Total assets                 $       320,979      219,527     101,452      46.2 %   243,952
                                               ==============  =========== ===========    ========= ========
  
  
  
  Current Liabilities
       Current maturities of long-term dept  $           100        7,100     (7,000)     (98.6)%       100
       Accounts payable                               36,709       26,936       9,773      36.3 %    29,903
       Accrued expenses                               15,175       16,841     (1,666)     (9.9) %    15,074
       Income taxes payable                            1,034          836         198      23.7 %     1,580
                                               --------------  ----------- -----------    --------- --------
                Total current liabilities             53,018       51,713       1,305       2.5 %    46,657
  
  Long-term debt                                     139,991       72,891      67,100      92.1 %    76,541
  
  Deferred income taxes                                9,965        8,088       1,877      23.2 %     9,965
                                               --------------  ----------- -----------    --------- --------
                Total liabilities                    202,974      132,692      70,282      53.0 %   133,163
  
  Shareholders' equity                               118,005       86,835      31,170      35.9 %   110,789
                                               --------------  ----------- -----------    --------- --------
  
                Total liabilities and
                shareholders' equity         $       320,979      219,527     101,452      46.2 %   243,952
                                               ==============  =========== ===========    ========= ========
  
  Shares outstanding                                  12,687       11,339       1,348      11.9 %    12,609
                                               ==============  =========== ===========    ========= ========
  
  </TABLE>
  
  * Derived from audited financial
  statements.
  
  <PAGE>
  
                                     CULP, INC.
                            FINANCIAL INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE SIX MONTHS ENDED NOVEMBER 2, 1997 AND OCTOBER 27, 1996
                          (Unaudited, Amounts in Thousands)
  
  <TABLE>
  <CAPTION>
                                                                           SIX MONTHS ENDED
                                                                       --------------------------
  
                                                                               Amounts
                                                                       -------------------------
                                                                       November 2,   October 27,
                                                                          1997         1996
                                                                       -----------  ------------
  
  Cash flows from operating activities:
  <S>                                                              <C>                  <C>  
      Net income                                                   $        7,355         5,920
      Adjustments to reconcile net income to net
         cash provided by (used in) operating activities:
            Depreciation                                                    6,869         6,321
            Amortization of intangible assets                                 533           444
            Provision for deferred income taxes                                 0             0
            Changes in assets and liabilities, net of the effects
              business acquired:
               Accounts receivable                                        (17,623)         (164)
               Inventories                                                (11,813)       (4,905)
               Other current assets                                          (686)          470
               Other assets                                                  (188)          (22)
               Accounts payable                                            10,668         3,220
               Accrued expenses                                               295         4,277
               Income taxes payable                                          (546)          639
                                                                       -----------  -----------
                 Net cash provided by (used in)operating activities        (5,136)       16,200
                                                                       -----------  ------------
  Cash flows from investing activities:
      Capital expenditures                                                (19,216)       (9,676)
      Purchases of restricted investments                                  (8,662)         (107)
      Purchase of investments to fund deferred compensation liability        (581)            0
      Sale of restricted investments                                       11,422             2
      Business acquired                                                   (36,628)            0
                                                                       -----------  ------------
                 Net cash used in investing activities                    (53,665)       (9,781)
                                                                       -----------  ------------
  Cash flows from financing activities:
      Proceeds from issuance of long-term debt                             63,500         1,000
      Principal payments on long-term debt                                    (50)       (3,050)
      Change in accounts payable-capital expenditures                      (3,862)       (3,592)
      Dividends paid                                                        (889)         (735)
      Proceeds from common stock issued                                       481           204
                                                                       -----------  ------------
                 Net cash provided by (used in) financing activities       59,180        (6,173)
                                                                       -----------  ------------
  
  Increase in cash and cash investments                                       379           246
  
  Cash and cash investments at beginning of period                            830           498
                                                                       -----------  ------------
  
  Cash and cash investments at end of period                       $        1,209           744
                                                                       ===========  ============
  
  </TABLE>
  
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL ANALYSIS
                                  NOVEMBER 2, 1997
                                      <TABLE>
  <CAPTION>
  
  
                                            FISCAL 97                              FISCAL 98
                                           -------------   ----------------------------------------------------------   --------------
                                                Q2              Q1             Q2            Q3             Q4               LTM
                                           -------------   ----------------------------------------------------------   --------------
  
  INVENTORIES
  <S>                                          <C>            <C>            <C>
          Inventory turns                           6.6            5.8            6.1
  
  RECEIVABLES
          Days sales in receivables                 45             50             55
          Percent current & less than 30
            days past due                         99.9%          95.0%          97.8%
  
  WORKING CAPITAL
          Current ratio                             2.1            3.6            2.9
          Working capital turnover                  5.4            5.1            4.8
          Working capital                       $57,230        $88,969        $98,833
          Working capital as a % of sales (4)     18.4%          23.8%          21.9%
  
  PROPERTY, PLANT & EQUIPMENT
          Depreciation rate                        8.1%           7.1%           7.4%
          Percent property, plant &
            equipment are depreciated             48.6%          46.8%          45.3%
          Capital expenditures                  $26,958 (1)     $9,153        $10,063
  
  PROFITABILITY
          Net profit margin                        3.5%           2.9%           3.7%                                          3.6%
          Gross profit margin                     18.2%          16.8%          18.5%                                         18.1%
          Operating income margin                  7.1%           5.8%           7.4%                                          7.0%
          SG & A expenses/net sales               11.1%          11.0%          11.1%                                         11.1%
          Return on average total capital          9.3%           7.6%          10.0%                                          9.6%
          Return on average equity                17.4%          10.2%          15.6%                                         14.7%
          Earnings per share                      $0.33          $0.23          $0.36                                         $1.23
  
  LEVERAGE (3)
          Total liabilities/equity               152.8%         123.1%         172.0%
          Funded debt/equity                      85.9%          77.4%         111.7%
          Funded debt/capital employed            46.2%          43.6%          52.8%
          Funded debt                           $74,612        $87,930       $131,833
          Funded debt/EBITDA (LTM)                 1.97           2.18           3.10
          EBITDA/Interest expense, net (LTM)                                                                                    8.5
  
  OTHER
          Book value per share                    $7.66          $8.98          $9.30
          Employees at quarter end                3,098          3,180          3,554
          Sales per employee (annualized)      $138,000       $125,000       $146,000
          Capital employed (3)                 $161,447       $201,467       $249,838
          Effective income tax rate               37.5%          35.0%          35.0%
          EBITDA (2)                            $10,540         $9,012        $12,643                                       $42,516
          EBITDA/net sales                        10.0%           9.1%          10.3%                                         10.0%
  </TABLE>
  
    (1) Expenditures for entire
  year
    (2) Earnings before interest, income taxes, and depreciation &
  amortization.
    (3) Total liabilities, long-term debt, funded debt and capital employed are 
  all net of restricted investments.
    (4) Working capital for this calculation is accounts receivable,
  inventories and accounts payable.
    (5) LTM represents "Latest Twelve
  Months"
  
  <PAGE>
  
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                       SALES BY PRODUCT CATEGORY/BUSINESS UNIT
     FOR THREE MONTHS AND SIX MONTHS ENDED NOVEMBER 2, 1997 AND OCTOBER 27, 1996
  
  
                                     (Amounts in thousands)
  
  <TABLE>
  <CAPTION>
                                                 THREE MONTHS ENDED (UNAUDITED)
                                   ------------------------------------------------------------
  
                                         Amounts                        Percent of Total Sales
                                   --------------------                 -----------------------
                                   November 2, October 27,   % Over
  Product Category/Business Unit      1997       1996        (Under)        1998        1997
  ------------------------------   ---------  ---------   ------------  ----------   ----------
  Upholstery Fabrics
  <S>                           <C>             <C>          <C>         <C>         <C>   
      Culp Textures             $    24,454     24,001        1.9 %       19.9 %      22.8 %
      Rossville/Chromatex            21,602     21,722       (0.6) %      17.6 %      20.6 %
                                   ---------  ---------   ------------  ----------   ----------
                                     46,056     45,723        0.7 %       37.5 %      43.5 %
  
      Velvets/Prints                 43,928     40,233        9.2 %       35.7 %      38.2 %
  
      Phillips                       10,725          0      100.0 %        8.7 %       0.0 %
                                   ---------  ---------   ------------  ----------   ----------
                                    100,709     85,956       17.2 %       81.9 %      81.7 %
  Mattress Ticking
      Culp Home Fashions             22,217     19,248       15.4 %       18.1 %      18.3 %
                                   ---------  ---------   ------------  ----------   ----------
  
                              * $   122,926    105,204       16.8 %      100.0 %     100.0 %
                                   =========  =========   ============  ==========   ==========
  
  </TABLE>
  <TABLE>
  <CAPTION>
  
                                                  SIX MONTHS ENDED (UNAUDITED)
                                   ------------------------------------------------------------
  
                                         Amounts                        Percent of Total Sales
                                   --------------------                 -----------------------
                                   November 2, October 27,  % Over
  Product Category/Business Unit      1997       1996        (Under)      1998        1997
  ------------------------------   ---------  ---------   ------------  ----------   ----------
  Upholstery Fabrics
  <S>                           <C>            <C>           <C>         <C>         <C>   
      Culp Textures             $    46,147     44,802        3.0 %       20.7 %      22.9 %
      Rossville/Chromatex            39,723     39,887       (0.4)%       17.9 %      20.4 %
                                   ---------  ---------   ------------  ----------   ----------
                                     85,870     84,689        1.4 %       38.6 %      43.3 %
  
      Velvets/ Prints                82,325     75,100        9.6 %       37.0 %      38.4 %
  
      Phillips                       10,725          0      100.0 %        4.8 %       0.0 %
                                   ---------  ---------   ------------  ----------   ----------
                                    178,920    159,789       12.0 %       80.4 %      81.6 %
  Matress Ticking
      Culp Home Fashions             43,504     35,944       21.0 %       19.6 %      18.4 %
                                   ---------  ---------   ------------  ----------   ----------
  
                              * $   222,424    195,733       13.6 %      100.0 %     100.0 %
                                   =========  =========   ============  ==========   ==========
  
  </TABLE>
  
  
  *U.S. sales were $87,622 and $79,304 for the three months of
  fiscal 1998 and fiscal 1997, respectively;
   and $162,029 and $149,860 for the six months of fiscal 1998 and
  fiscal 1997, respectively.
   The percentage increase in U.S. sales was 10 %  for the three months and
  an increase of 8 % for the six months.
  
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                       INTERNATIONAL SALES BY GEOGRAPHIC AREA
     FOR THREE MONTHS AND SIX MONTHS ENDED NOVEMBER 2, 1997 AND OCTOBER 27, 1996
  
  
                                       (Amounts in thousands)
  
  <TABLE>
  <CAPTION>
                                                   THREE MONTHS ENDED (UNAUDITED)
                                  ------------------------------------------------------------------
  
                                          Amounts                           Percent of Total Sales
                                  -------------------------                -------------------------
                                  November 2,   October 27,    % Over
        Geographic Area              1997          1996        (Under)         1998          1997
  ----------------------------    ------------  -----------  ------------  -----------    ----------
  <S>                           <C>                 <C>        <C>           <C>          <C>   
  North America (Excluding USA) $       8,162        8,016      1.8 %         23.1 %       30.9 %
  Europe                                6,624        5,716     15.9 %         18.8 %       22.1 %
  Middle East                           7,439        5,079     46.5 %         21.1 %       19.6 %
  Far East & Asia                       9,720        5,019     93.7 %         27.5 %       19.4 %
  South America                         1,216          632     92.4 %          3.4 %        2.4 %
  All other areas                       2,143        1,438     49.0 %          6.1 %        5.6 %
                                  ------------  -----------  ------------  -----------    ----------
  
                                $      35,304       25,900     36.3 %        100.0 %      100.0 %
                                  ============  ===========  ============  ===========    ==========
  
  </TABLE>
  <TABLE>
  <CAPTION>
  
                                                    SIX MONTHS ENDED (UNAUDITED)
                                  ------------------------------------------------------------------
  
                                          Amounts                           Percent of Total Sales
                                  -------------------------                -------------------------
                                  November 2,   October 27,    % Over
        Geographic Area              1997          1996        (Under)         1998          1997
  ----------------------------    ------------  -----------  ------------  -----------    ----------
  <S>                            <C>                <C>        <C>           <C>          <C>   
  North America (Excluding USA)  $     15,206       14,073      8.1 %         25.2 %       30.7 %
  Europe                               11,125       10,483      6.1 %         18.4 %       22.9 %
  Middle East                          14,003        9,156     52.9 %         23.2 %       20.0 %
  Far East & Asia                      15,662        8,815     77.7 %         25.9 %       19.2 %
  South America                         1,462          999     46.3 %          2.4 %        2.2 %
  All other areas                       2,937        2,347     25.1 %          4.9 %        5.1 %
                                  ------------  -----------  ------------  -----------    ----------
  
                              $        60,395       45,873     31.7 %        100.0 %      100.0 %
                                  ============  ===========  ============  ===========    ==========
  
  </TABLE>
  
  International sales, and the percentage of total sales, for each of the last six
  fiscal years  follows:  fiscal 1992-$ 34,094 (18%);  fiscal 1993-$ 40,729 (20%);
  fiscal  1994-$ 44,038  (18%);  fiscal 1995-$ 57,971 (19%);  fiscal 1996-$ 77,397
  (22%);  and fiscal  1997-$  101,571  (25%).  International  sales for the second
  quarter  represented 29% and 25% for 1998 and 1997,  respectively.  Year-to-date
  international  sales  represented  27% and 23% of total sales for 1998 and 1997,
  respectively.
  
  Certain amounts for fiscal year 1997 have been  reclassified to conform with the
  fiscal year 1998  presentation.  Additionally, certain amounts were reclassified
  from the fiscal year 1998 first quarter presentation.
  
  
  
  <PAGE>
  
  
                                     Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1996 vs 1997 vs 1998
  
                               (Amounts in thousands)
                                      <TABLE>
  <CAPTION>
  
                                              Fiscal 1996                                       Fiscal 1997                   
                             -----------------------------------------------   ---------------------------------------------- 
  Product Category/Business Units  Q1      Q2        Q3       Q4     TOTAL         Q1     Q2        Q3        Q4      TOTAL   
  ---------------------------
  
  Upholstery Fabrics
  <S>                           <C>      <C>       <C>     <C>      <C>          <C>    <C>        <C>     <C>       <C>      
      Culp Textures             17,584   22,715    20,685   23,400   84,384      20,801  24,001    20,389   23,027    88,218  
      Rossville/Chromatex       15,358   17,960    18,567   22,318   74,203      18,165  21,722    18,953   20,672    79,512  
                             -----------------------------------------------   ---------------------------------------------- 
                                32,942   40,675    39,252   45,718  158,587      38,966  45,723    39,342   43,699   167,730  
  
      Velvets/Prints            23,523   32,081    31,836   38,261  125,701      34,867  40,233    40,387   40,980   156,467  
  
      Phillips                                                                                                                
                                     -        -         -        -        -           -       -         -        -         -  
                             -----------------------------------------------   ---------------------------------------------- 
                                56,465   72,756    71,088   83,979  284,288      73,833  85,956    79,729   84,679   324,197  
  
  Mattress Ticking
      Culp Home Fashions        15,892   17,916    15,388   18,183   67,379      16,696  19,248    17,739   20,999    74,682  
                             -----------------------------------------------   ---------------------------------------------- 
  
                                72,357   90,672    86,476  102,162  351,667      90,529 105,204    97,468  105,678   398,879  
                             ===============================================   ============================================== 
  </TABLE>
  
                                         
  
                                     Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1996 vs 1997 vs 1998
  
                               (Amounts in thousands)
  <TABLE>
  <CAPTION>
  
                                                 Fiscal 1998
                               -----------------------------------------------
  Product Category/Business Unit   Q1        Q2        Q3        Q4     TOTAL
  ---------------------------
  
  Upholstery Fabrics
  <S>                            <C>       <C>                         <C>   
      Culp Textures               21,693    24,454                      46,147
      Rossville/Chromatex         18,121    21,602                      39,723
                               -----------------------------------------------
                                  39,814    46,056                      85,870
  
      Velvets/Prints              38,397    43,928                      82,325
  
      Phillips                              10,725                      10,725
                                       -
                               -----------------------------------------------
                                  78,211   100,709                     178,920
  
  Mattress Ticking
      Culp Home Fashions          21,287    22,217                      43,504
                               -----------------------------------------------
  
                                  99,498   122,926                     222,424
                               ===============================================
  </TABLE>
  <TABLE>
  <CAPTION>
                                  Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1996 vs 1997 vs 1998
  
                               (Amounts in thousands)
                         
  
  
                                                                                Percent increase(decrease) from prior year:
                                                                                      Product Category/Business Units
  -------------------------------------------------------------------------------------------------------------------------------
                                              Fiscal 1996                                       Fiscal 1997                      
                             -----------------------------------------------   --------------------------------------------------
  Upholstery Fabrics
  <S>                            <C>       <C>       <C>      <C>      <C>         <C>     <C>      <C>       <C>       <C>      
      Culp Textures              (10.3)    (0.5)     (1.2)     7.6     (0.9)       18.3     5.7      (1.4)    (1.6)       4.5 3  
      Rossville/Chromatex          1.4     14.0      13.2     35.5     16.4        18.3    20.9       2.1     (7.4)       7.2 2) 
                             -----------------------------------------------   --------------------------------------------------
                                 (5.2)      5.4       5.1     19.7      6.5        18.3    12.4       0.2     (4.4)       5.8 2  
  
      Velvets/Prints              13.9     21.3      12.5     21.8     17.7        48.2    25.4      26.9      7.1       24.5 1  
  
      Phillips                                                                                                                
                                     -        -         -        -        -           -       -         -        -         -     
                             -----------------------------------------------   --------------------------------------------------
                                   1.9     11.9       8.3     20.6     11.2        30.8    18.1      12.2      0.8      14.0     
  
  Mattress Ticking
      Culp Home Fashions          45.1     33.6      26.7     14.9     28.8         5.1     7.4      15.3     15.5      10.8     
                             -----------------------------------------------   -------------------------------------------------
  
                                   9.1     15.6      11.2     19.6     14.2        25.1    16.0      12.7      3.4      13.4     
                             ===============================================   =================================================
  
     Overall Growth Rate
  
  Internal (without acquisitions)  6.4     13.0       8.7     19.6     12.3        25.1    16.0      12.7      3.4      13.4     
  External                         2.7      2.6       2.5               1.9                                                      
                                                                 -                    -       -         -        -         -  
                             -----------------------------------------------   -------------------------------------------------
                             ===============================================   =================================================
  
  </TABLE>
  <TABLE>
  <CAPTION>
                     Percent increase(decrease) from prior year:
                           Product Category/Business Units
  ----------------------------------------------------------------------------
                                               Fiscal 1998
                               -----------------------------------------------
  Upholstery Fabrics
  <S>                              <C>       <C>                        <C>
      Culp Textures                  4.3       1.9                        3.0
      Rossville/Chromatex           (0.2)     (0.6)                      (0.4)
                              -----------------------------------------------
                                     2.2       0.7                        1.4
  
      Velvets/Prints                10.1       9.2                        9.6
  
      Phillips                       -                                    -
                              -----------------------------------------------
                                    5.9       17.2                       12.0
  
  Mattress Ticking
      Culp Home Fashions           27.5       15.4                       21.0
                              -----------------------------------------------
  
                                    9.9       16.8                       13.6
                              ===============================================
  
     Overall Growth Rate
  
  Internal (without acquisitions)   9.9       6.6                        8.1
  External                                   10.2                        5.5
                              -----------------------------------------------                                                      
                              ===============================================
  
  </TABLE>
                                           
                                                                   (Page 8 of 11)
   
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
   for the three and six month periods ended November 2, 1997 and October 27, 1996
  
  
  INCOME STATEMENT COMMENTS
  
  GENERAL - Net sales increased 16.8 % to $122.9 million and net income  increased
  21.4% to $ 4.5 million for the second quarter, as compared with the same quarter
  of last year.  This  performance  marks the 20th  consecutive  quarter of record
  earnings and the 18th  consecutive  quarter of record sales (based on comparable
  year-earlier  periods).  Net sales for the quarter  without  including  Phillips
  Mills  increased  6.7% versus the same quarter of last year.  The  company's net
  profit margin increased slightly to 3.7 % from 3.5 % for the quarter.  Also, the
  company  achieved  a return on  average  shareholder's  equity of 12.9 % for the
  first six months.  The company  acquired  Phillips Mills at the beginning of the
  second  quarter and the Phillips  results are included  beginning with the first
  day of the quarter  (August 4, 1997).  The company  attributes  this  consistent
  record to several key competitive strengths:
  
  Diverse Global Customer Base - penetrating  other end-use markets in addition to
  U.  S.  residential  furniture,  such  as  bedding,  international,   commercial
  furniture and juvenile  furniture;  sales to these other  markets  accounted for
  approximately 50% of net sales during the second quarter;  additionally,  no one
  customer accounted for more than 7% of sales during the second quarter of fiscal
  1998;
  
  Design  Innovation  - investing  in the  creative  aspect of our  business - the
  company  has   significantly   increased  the  resources   (both  designers  and
  computer-aided  design  (CAD)  systems)  dedicated  to the  design  and  product
  development areas in each business unit; the company's in-house design staff now
  includes  over 50 people.  Additionally,  the  company is  planning  to open its
  state-of-the-art design center in Burlington, North Carolina during January 1998
  that will  bring  together  most of its design  resources  in one  facility  and
  utilize advanced CAD systems and technology.
  
  Vertical  Integration  -  realizing  additional  manufacturing   integration  by
  producing  various raw material  components  that are used in the manufacture of
  its products; and
  
  Ability to  Identify  and  Integrate  Acquisitions  -  investing  in  selective,
  accretive acquisitions in complementary businesses which we know and understand,
  and that  strengthen  existing  marketing  positions or add  strategic  vertical
  manufacturing capabilities.
  
  NET SALES - Compared  with the second  quarter of last year,  upholstery  fabric
  sales  increased  17.2% to $100.7 million and mattress  ticking sales  increased
  15.4% to $22.2  million for the quarter (See Sales by Business  Unit schedule on
  Page 5 and Sales by  Business  Unit - Trend  Analysis  on Page 7). The growth in
  upholstery  fabric  sales  for  the  second  quarter   primarily   reflects  the
  incremental  sales from the Phillips  acquisition  of $10.7 million and gains in
  Velvets/Prints   -   up   9.2%;   other   changes   by   business   unit   were:
  Rossville/Chromatex  - down 0.6 %; and Culp  Textures  - up 1.9%.  The growth in
  demand in sales for upholstery  fabrics from U.S.  manufacturers  of residential
  furniture as a group began slowing  during the second half of fiscal 1997.  That
  pattern has  continued  thus far into fiscal  1998.  The  company  believes  the
  financial difficulties of a number of significant furniture retailers, including
  the recent  bankruptcies  of Levitz and  Montgomery  Wards,  have  significantly
  contributed  to the slower rate of growth.  Business with  U.S.-based  customers
  increased 10% from a year ago while sales to customers outside the United States
  rose 36% for the  quarter.  The sales gains in the U.S.  relate to the  bedding,
  commercial  and  juvenile  markets,  while the sales  gains  outside of the U.S.
  relate  principally to the residential  furniture  market.  Sales of wet printed
  flock  upholstery  fabrics,  which remain one of the company's  growing  product
  categories  internationally,  increased  57.0% from the same quarter a year ago.
  The increased  sales by Culp Home Fashions  during the second quarter (up 15.4%)
  reflect  the  continued   positive  response  to  the  new  designs  and  fabric
  constructions,  notably in  printed  jacquard  ticking.  The growth in Culp Home
  Fashions has been significantly aided by the company's  investment in additional
  weaving capacity to manufacture wide jacquard  greige,  or unfinished,  goods at
  the company's  Rayonese facility in Canada.  These greige goods are then further
  processed at other  facilities by printing,  dyeing and other finishing steps to
  produce mattress ticking.
  
  
  <PAGE>
  
   
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
   for the three and six month periods ended November 2, 1997 and October 27, 1996
  
  
  International  sales were up 36.3% for the quarter.  International  sales in all
  major regions and each  business unit were strong,  and accounted for 29% of net
  sales for the quarter.  (See International  Sales by Geographic Area schedule on
  page 6.) The vast  majority  of  international  sales  are  denominated  in U.S.
  dollars.
  
  GROSS PROFIT - The gross profit  increase of 18.9% for the second quarter versus
  the same  quarter  of last year  reflects  a  substantial  gain in the Culp Home
  Fashions  business unit, the incremental gross profit from the Phillips business
  unit, a moderate increase in Rossville/Chromatex, flat results in Velvets/Prints
  and lower results in Culp  Textures.  The overall gross profit margin  increased
  slightly to 18.5% for the quarter versus 18.2% in the same quarter of last year.
  The company is benefiting  significantly from its international sales growth and
  the operation of its jacquard greige goods facility in Canada (Rayonese),  which
  also will complete a major  expansion of wide weaving  capacity during the third
  quarter. Factors which adversely affected the company's profitability during the
  quarter  included:  (a)  slower  growth in demand  from  U.S.  manufacturers  of
  residential  furniture;  and (b) start-up costs related to expansion projects in
  the Velvets/Prints  business unit (flock coating line, the new printing facility
  in Lumberton,  N.C. and the integration of the Phillips velvet products into new
  facilities  which  resulted  from the closing of the  Phillips  velvet  plant in
  August ). The company  believes  the  majority of the  start-up  and  transition
  issues are now resolved.
  
  S,G&A EXPENSES - S,G&A expenses for the second quarter were  essentially flat as
  a  percentage  of sales  versus the same  period of last year.  The  increase in
  absolute dollars is principally due to incremental  S,G&A expenses for Phillips,
  higher  sales  commissions   related  to  international  sales  and  significant
  investments in additional design resources,  which were offset by lower accruals
  for incentive-based compensation plans and other factors.
  
  INTEREST  EXPENSE - The increase for the second  quarter of 46.5 % over the same
  quarter  of last year is due to higher  average  borrowings  outstanding,  which
  resulted from the company's  acquisition  of Phillips Mills that was made on the
  first day of this  quarter,  and from capital  expenditure  and working  capital
  investments that were made during the first half of this year. . INTEREST INCOME
  - Interest  income  increased for the quarter due to the higher level of unspent
  IRB  borrowings  which are  reported as  Restricted  Investments  on the balance
  sheet.
  
  OTHER EXPENSE (INCOME),  NET - Other expense (income) increased to $425,000 from
  $301,000 in the same  quarter of last year,  due  primarily  to the  incremental
  goodwill amortization related to Phillips.
  
  INCOME TAXES - The effective tax rate for the second quarter was 35.0%, compared
  with 37.5 % for the same quarter of last year, due to the lower tax rate related
  to an estimated  higher amount of Canadian income and tax benefits related to an
  estimated higher level of international sales.
  
  EBITDA - EBITDA for the  quarter  increased  20.0 % to $12.6  million  from last
  year's second quarter and  represented  10.3 % of net sales compared with 10.0 %
  of net sales for the same period of last year.
  
  
  
  
  
  
  
  <PAGE>
  
  
   
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
   for the three and six month periods ended November 2, 1997 and October 27, 1996
  
  
  BALANCE SHEET COMMENTS
  
  WORKING CAPITAL - Accounts receivable  increased 42.4% from October 1996, due to
  the Phillips acquisition and increased sales for the second quarter.  Days sales
  outstanding represented 55 days, up from 45 days at October 27, 1996 and 49 days
  at April 27, 1997.  Accounts  receivable  continued to increase at a faster rate
  than sales because of the  increasing  mix of  international  sales and mattress
  ticking  sales,  which carry longer  payment terms than U.S.  upholstery  fabric
  sales.  Inventories  increased 34.2% from October 27, 1996. inventory turns were
  6.1 versus 6.6 for last year's second.  Operating working capital  (comprised of
  accounts receivable,  inventory and accounts payable) increased significantly to
  $107.8  million at November 2, 1997,  from $77.6 million at October 27, 1996 and
  $80.3 million at April 27, 1997, for the reasons mentioned above.
   
  PROPERTY, PLANT AND EQUIPMENT - The company has maintained a significant program
  of capital  expenditures over the past several years designed to expand capacity
  to support sales growth,  increase  vertical  integration to lower product costs
  and  control  more of its supply of raw  materials,  and  enhance  manufacturing
  efficiencies  through  modernization.  The company is currently planning capital
  spending of  approximately  $36 million during fiscal 1998, which includes about
  $12.5  million  for  expansion   projects  (35%);  $10.5  million  for  vertical
  integration projects (29%); and $13.0 million for modernization  projects (36%).
  The principal  expansion project involves completion of various items related to
  the Lumberton,  N.C. printing facility.  The key vertical  integration  projects
  include yarn extrusion  expansion and additional  weaving  capacity for jacquard
  greige  goods at  Rayonese.  The  modernization  projects  encompass a number of
  smaller projects throughout the company's  operations.  Depreciation expense for
  fiscal 1998 is expected to be approximately $15.0 million.
  
  LONG-TERM  DEBT - The  company's  funded  debt-to-capital  ratio  was  52.8 % at
  November 2, 1997, up from 46.2% at October 27, 1996, and up from 37.2 % at April
  27,  1997.  Funded debt was $131.8  million at November 2, 1997,  up from $ 74.6
  million at October  27, 1996 and up from $ 65.6  million at April 1997.  (Funded
  debt equals  long-term  debt,  including  current  maturities,  less  restricted
  investments,  which  represent  unspent IRB funds.) The  increase in funded debt
  from April 1997 resulted from the Phillips acquisition ($36.6 million),  capital
  expenditures ($19.2 million), an operating cash flow deficit ($5.1 million), and
  a decrease in accounts payable related to capital  expenditures  ($3.9 million).
  The sources of financing used to fund the Phillips  acquisition  were borrowings
  under the company's revolving credit facility in the amount of $31 million and a
  note payable from the seller of $6 million.
  
  PHILLIPS  ACQUISITION - On August 5, 1997, the company acquired the business and
  certain  assets  relating  to the  upholstery  fabric  businesses  operating  as
  Phillips  Mills.  Based  on the  terms  of the  asset  purchase  agreement,  the
  transaction is valued at approximately $37 million,  which included cash, seller
  debt  retired,  a  note  payable  to  the  seller  and  acquisition  costs.  The
  consideration  for the acquisition  also included stock options and an agreement
  for contingent  payments to the selling  companies  within three years following
  closing that could range from $0 to $5,500,000,  depending upon the future sales
  performance of the Phillips  jacquard  fabric product line. (See Form 8-K, dated
  April 30, 1997, which provides additional information related to the acquisition
   .)
  
  
  <PAGE>
  
  
  
  
  
  
  
  
  
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
   for the three and six month periods ended November 2, 1997 and October 27, 1996
  
  
  
  PENDING ACQUISITION OF ARTEE INDUSTRIES - On October 14, 1997, Culp entered into
  a definitive ASSET PURCHASE  AGREEMENT to acquire the business and substantially
  all assets and to assume certain  liabilities of Artee Industries,  Incorporated
  ("Artee"), a yarn manufacturer. The transaction value at closing is estimated at
  $17.4  million,  and includes  the issuance of new shares of Culp common  stock,
  cash and a note, as well as the repayment at closing of Artee's interest-bearing
  debt. Also, there is an "earn-out" which provides the opportunity for additional
  consideration  of up to $7.2 million (60% in stock and 40% in cash),  based upon
  the  profitability  of Artee during Culp's  fiscal year ending May 2, 1999.  The
  acquisition  will be accounted  for as a purchase,  and therefore the results of
  Artee from the closing date will be included in Culp's  results.  Closing of the
  transaction  is  expected  on May 4,  1998,  or  possibly  earlier,  if  certain
  profitability  levels are  reached.  Conditions  to closing are set forth in the
  agreement and include, among other things, the satisfactory completion of Culp's
  due diligence and a minimum net worth requirement.  (See Form 8-K, dated October
  15, 1997, which provides additional information related to the acquisition.)
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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) November 12, 1997
  
                                     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)
                                  (910) 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 (11
  pages),  both dated November 12, 1997,  related to the quarter ended November 2,
  1997.
  
  Forward  Looking  Information.  The  discussion  in this  Form  8-K may  contain
  statements that could be deemed forward-looking statements, which are inherently
  subject to risks and uncertainties.  These 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
  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 adversely affect the company.
  
                                    SIGNATURES
  
  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
                                       Senior Vice President and
                                       Chief Financial Officer
  
                                By:    Stephen T. Hancock
                                       Stephen T. Hancock
                                       General Accounting Manager
  
  Dated:   November 12,  1997
  Culp Reports Second Quarter Gains
  Page 2
  November 12, 1997
  
  FOR IMMEDIATE RELEASE
  
              CULP REPORTS INCREASED SECOND QUARTER SALES AND EARNINGS
   
                  NET INCOME RISES 21% TO NEW SECOND-QUARTER RECORD
  
  HIGH POINT, N.C. (November 12, 1997) Culp, Inc. (NYSE: CFI) today reported sales
  and earnings for the second quarter and first half of its 1998 fiscal year.
  
  For the three  months  ended  November  2, 1997,  Culp  reported  that net sales
  increased 17% to $122.9  million  compared  with $105.2  million a year ago. Net
  income for the quarter increased 21% to $4.5 million compared with $3.7 million.
  Earnings  per  share  increased  9% to  $0.36  on 12.7  million  average  shares
  outstanding versus $0.33 per share on 11.3 million average shares outstanding.
  
  The gains for the second quarter  brought net sales for the first half to $222.4
  million,  up 14% from $195.7 million in the first six months of fiscal 1997. Net
  income for the first half increased to $7.4 million  compared with $5.9 million.
  Earnings per share rose 12% to $0.58 on 12.6 million average shares  outstanding
  versus  $0.52  per  share on 11.3  million  average  shares  outstanding  in the
  year-earlier period.
  
  The increase of 12% in the average number of shares  outstanding  for the second
  quarter  and first six months was due  principally  to the  Company's  secondary
  offering completed in February 1997.
  
  The Company noted that $10.7 million of the increase in net sales for the second
  quarter is attributable to the Phillips Mills  acquisition,  which was completed
  at the beginning of the second quarter.
  
  "These results marked the 20th consecutive quarter of record earnings versus the
  comparable  year-earlier  period,"  said Robert G. Culp,  III,  chief  executive
  officer.  "We are  particularly  pleased  with the higher net sales and earnings
  considering the slower growth in demand that we have  experienced  thus far this
  year,  particularly for certain categories of upholstery fabrics from U.S.-based
  residential  furniture  customers.  We had not expected business to be as robust
  this year, and our results appear generally to mirror  industry-wide  trends. We
  did  achieve  a 10% gain in sales  to  U.S.-based  accounts  during  the  second
  quarter, aided by continuing gains from our Home Fashions business unit, and the
  incremental  sales from the Phillips  Mills  acquisition.  Our sales of mattress
  ticking  are up  significantly  from a year ago,  reflecting  the success of the
  wider variety of new textures and patterns that we are  introducing.  Sales from
  our Home  Fashions  group  are  also  benefiting  from  Culp's  ongoing  capital
  investment  program  and,  in  particular,   projects  that  have  substantially
  increased our capacity for  manufacturing  wide jacquard  unfinished  goods. The
  success we are having in expanding this portion of our business  relates both to
  the  value  of our new  designs  and a  consistent  ability  to meet  customers'
  delivery schedules."
  
                                       -MORE-
  Culp  added,  "The  momentum in our  international  business  remains  positive.
  Shipments to customers  outside the United  States  increased 36% for the second
  quarter and accounted for 29% of net sales.  We are  benefiting  from a stronger
  competitive  presence in established  markets such as Europe and the Middle East
  and from greater  penetration  into faster growing  regions such as Asia and the
  Far East.
  
  "A highlight of Culp's  progress thus far in fiscal 1998 has been the results of
  our ongoing initiative to pursue complementary acquisitions. The performance for
  the second quarter includes the initial contribution from the assets we acquired
  from Phillips Mills in August. The assimilation of these additional resources is
  proceeding as planned. A main factor driving that transaction was the ability to
  broaden our marketing  base,  especially  in  upholstery  fabrics for motion and
  other casual  styles of furniture.  The  agreement  signed last month to acquire
  Artee  Industries  principally  represents  a  means  to  further  our  vertical
  integration.  The addition of Artee's  WrapSpun TM,  open-end  spun and chenille
  yarns  will also  support  the  accelerated  design  initiatives  of each of our
  business units to produce fabrics that embody innovative textures and styles. An
  important  aspect  of  our  strategic  planning  is  maintaining  the  financial
  resources  that  will  enable  us to  consider  future  opportunities  for other
  acquisitions."
  
  Culp,  Inc. is the  world's  largest  manufacturer  and  marketer of  upholstery
  fabrics for furniture and is a leading producer of mattress ticking for bedding.
  The Company's  fabrics are used primarily in the  production of residential  and
  commercial furniture and bedding products.
  
                                     CULP, INC.
                           Condensed Financial Highlights
                                     (Unaudited)
                                               Three Months Ended
                                   ---------------------------------------------
                                        November 2,               October 27,
                                           1997                      1996
                                   --------------------      -------------------
  Net sales                        $        122,926,000      $       105,204,000
  Net income                       $          4,505,000      $         3,710,000
  Earnings per share               $               0.36      $              0.33
  Average shares outstanding                 12,668,000               11,312,000
  
                                                Six Months Ended                
                                   --------------------------------------------- 
                                         November 2,               October 27,
                                            1997                      1996
                                   ---------------------      ------------------
  Net sales                        $        222,424,000      $       195,733,000
  Net income                       $          7,355,000      $         5,920,000
  Earnings per share               $               0.58      $              0.52
  Average shares outstanding                 12,649,000               11,304,000
  
                                        -END-
  CULP, INC. FINANCIAL INFORMATION RELEASE
                           CONSOLIDATED INCOME STATEMENTS
   FOR THE THREE MONTHS AND SIX MONTHS ENDED NOVEMBER 2, 1997 AND OCTOBER 27, 1996
  
                  (Amounts in Thousands, Except for Per Share Data)
  THREE MONTHS ENDED (UNAUDITED)
                                     ----------------------------------------------------------------------
  
                                              Amounts                                  Percent of Sales
                                     --------------------------                    --------------------------
                                     November 2,   October 27,     % Over
                                        1997          1996         (Under)           1998          1997
                                     ------------  ------------  ------------      ------------  ------------
  Net sales                       $      122,926       105,204        16.8 %           100.0 %       100.0 %
  Cost of sales                          100,191        86,082        16.4 %            81.5 %        81.8 %
                                     ------------  ------------  ------------      ------------  ------------
          Gross profit                    22,735        19,122        18.9 %            18.5 %        18.2 %
  
  Selling, general and
    administrative expenses               13,632        11,704        16.5 %            11.1 %        11.1 %
                                     ------------  ------------  ------------      ------------  ------------
          Income from operations           9,103         7,418        22.7 %             7.4 %         7.1 %
  
  Interest expense                         1,820         1,242        46.5 %             1.5 %         1.2 %
  Interest income                           (72)          (60)        20.0 %           (0.1) %       (0.1) %
  Other expense (income), net                425           301        41.2 %             0.3 %         0.3 %
                                     ------------  ------------  ------------      ------------  ------------
          Income before income taxes       6,930         5,935        16.8 %             5.6 %         5.6 %
  
  Income taxes  *                          2,425         2,225         9.0 %            35.0 %        37.5 %
                                     ------------  ------------  ------------      ------------  ------------
          Net income              $        4,505         3,710        21.4 %             3.7 %         3.5 %
                                     ============  ============  ============      ============  ============
  
  Average shares outstanding              12,668        11,312        12.0 %
  Net income per share                     $0.36         $0.33         9.1 %
  Dividends per share                    $0.0350       $0.0325         7.7 %
  SIX MONTHS ENDED (UNAUDITED)
                                     ----------------------------------------------------------------------
  
                                              Amounts                                  Percent of Sales
                                     --------------------------                    --------------------------
                                     November 2,   October 27,     % Over
                                        1997          1996         (Under)           1998          1997
                                     ------------  ------------  ------------      ------------  ------------
  Net sales                       $      222,424       195,733        13.6 %           100.0 %       100.0 %
  Cost of sales                          182,956       160,691        13.9 %            82.3 %        82.1 %
                                     ------------  ------------  ------------      ------------  ------------
          Gross profit                    39,468        35,042        12.6 %            17.7 %        17.9 %
  
  Selling, general and
    administrative expenses               24,548        22,568         8.8 %            11.0 %        11.5 %
                                     ------------  ------------  ------------      ------------  ------------
          Income from operations          14,920        12,474        19.6 %             6.7 %         6.4 %
  
  Interest expense                         3,100         2,424        27.9 %             1.4 %         1.2 %
  Interest income                           (162)         (117)       38.5 %            (0.1) %       (0.1) %
  Other expense (income), net                667           696        (4.2) %            0.3 %         0.4 %
                                     ------------  ------------  ------------      ------------  ------------
          Income before income taxes      11,315         9,471        19.5 %             5.1 %         4.8 %
  
  Income taxes  *                          3,960         3,551        11.5 %            35.0 %        37.5 %
                                     ------------  ------------  ------------      ------------  ------------
          Net income              $        7,355         5,920        24.2 %             3.3 %         3.0 %
                                     ============  ============  ============      ============  ============
  
  Average shares outstanding              12,649        11,304        11.9 %
  Net income per share                     $0.58         $0.52        11.5 %
  Dividends per share                    $0.0700       $0.0650         7.7 %
  
   * Percent of sales column is calculated as a % of income before income taxes.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                             CONSOLIDATED BALANCE SHEETS
                NOVEMBER 2, 1997, OCTOBER 27, 1996 AND APRIL 27, 1997
  
                          (Unaudited, Amounts in Thousands)
  Amounts                  Increase
                                               ----------------------------
                                                November 2,    October 27,       (Decrease)        * April 27,
                                                                           ------------------------
                                                   1997           1996      Dollars       Percent     1997
                                               --------------  ----------- -----------    --------- --------
  Current assets
  Cash and cash investments             $         1,209          744         465      62.5 %       830
       Accounts receivable                            74,314       52,202      22,112      42.4 %    56,691
       Inventories                                    70,192       52,300      17,892      34.2 %    53,463
       Other current assets                            6,136        3,697       2,439      66.0 %     5,450
                                               --------------  ----------- -----------    --------- --------
                Total current assets                 151,851      108,943      42,908      39.4 %   116,434
  
  Restricted investments                               8,258        5,379       2,879      53.5 %    11,018
  Property, plant & equipment, net                   107,377       80,316      27,061      33.7 %    91,231
  Goodwill                                            49,778       22,568      27,210     120.6 %    22,262
  Other assets                                         3,715        2,321       1,394      60.1 %     3,007
                                               --------------  ----------- -----------    --------- --------
  
                Total assets                 $       320,979      219,527     101,452      46.2 %   243,952
                                               ==============  =========== ===========    ========= ========
  
  Current Liabilities
       Current maturities of long-term dept  $           100        7,100     (7,000)     (98.6)%       100
       Accounts payable                               36,709       26,936       9,773      36.3 %    29,903
       Accrued expenses                               15,175       16,841     (1,666)     (9.9) %    15,074
       Income taxes payable                            1,034          836         198      23.7 %     1,580
                                               --------------  ----------- -----------    --------- --------
                Total current liabilities             53,018       51,713       1,305       2.5 %    46,657
  
  Long-term debt                                     139,991       72,891      67,100      92.1 %    76,541
  
  Deferred income taxes                                9,965        8,088       1,877      23.2 %     9,965
                                               --------------  ----------- -----------    --------- --------
                Total liabilities                    202,974      132,692      70,282      53.0 %   133,163
  
  Shareholders' equity                               118,005       86,835      31,170      35.9 %   110,789
                                               --------------  ----------- -----------    --------- --------
  
                Total liabilities and
                shareholders' equity         $       320,979      219,527     101,452      46.2 %   243,952
                                               ==============  =========== ===========    ========= ========
  
  Shares outstanding                                  12,687       11,339       1,348      11.9 %    12,609
                                               ==============  =========== ===========    ========= ========
  * Derived from audited financial
  statements.
  CULP, INC.
                            FINANCIAL INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE SIX MONTHS ENDED NOVEMBER 2, 1997 AND OCTOBER 27, 1996
                          (Unaudited, Amounts in Thousands)
  SIX MONTHS ENDED
                                                                       --------------------------
  
                                                                               Amounts
                                                                       -------------------------
                                                                       November 2,   October 27,
                                                                          1997         1996
                                                                       -----------  ------------
  
  Cash flows from operating activities:
  Net income                                                   $        7,355         5,920
      Adjustments to reconcile net income to net
         cash provided by (used in) operating activities:
            Depreciation                                                    6,869         6,321
            Amortization of intangible assets                                 533           444
            Provision for deferred income taxes                                 0             0
            Changes in assets and liabilities, net of the effects
              business acquired:
               Accounts receivable                                        (17,623)         (164)
               Inventories                                                (11,813)       (4,905)
               Other current assets                                          (686)          470
               Other assets                                                  (188)          (22)
               Accounts payable                                            10,668         3,220
               Accrued expenses                                               295         4,277
               Income taxes payable                                          (546)          639
                                                                       -----------  -----------
                 Net cash provided by (used in)operating activities        (5,136)       16,200
                                                                       -----------  ------------
  Cash flows from investing activities:
      Capital expenditures                                                (19,216)       (9,676)
      Purchases of restricted investments                                  (8,662)         (107)
      Purchase of investments to fund deferred compensation liability        (581)            0
      Sale of restricted investments                                       11,422             2
      Business acquired                                                   (36,628)            0
                                                                       -----------  ------------
                 Net cash used in investing activities                    (53,665)       (9,781)
                                                                       -----------  ------------
  Cash flows from financing activities:
      Proceeds from issuance of long-term debt                             63,500         1,000
      Principal payments on long-term debt                                    (50)       (3,050)
      Change in accounts payable-capital expenditures                      (3,862)       (3,592)
      Dividends paid                                                        (889)         (735)
      Proceeds from common stock issued                                       481           204
                                                                       -----------  ------------
                 Net cash provided by (used in) financing activities       59,180        (6,173)
                                                                       -----------  ------------
  
  Increase in cash and cash investments                                       379           246
  
  Cash and cash investments at beginning of period                            830           498
                                                                       -----------  ------------
  
  Cash and cash investments at end of period                       $        1,209           744
                                                                       ===========  ============
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL ANALYSIS
                                  NOVEMBER 2, 1997
  FISCAL 97                              FISCAL 98
                                           -------------   ----------------------------------------------------------   --------------
                                                Q2              Q1             Q2            Q3             Q4               LTM
                                           -------------   ----------------------------------------------------------   --------------
  
  INVENTORIES
  Inventory turns                           6.6            5.8            6.1
  
  RECEIVABLES
          Days sales in receivables                 45             50             55
          Percent current & less than 30
            days past due                         99.9%          95.0%          97.8%
  
  WORKING CAPITAL
          Current ratio                             2.1            3.6            2.9
          Working capital turnover                  5.4            5.1            4.8
          Working capital                       $57,230        $88,969        $98,833
          Working capital as a % of sales (4)     18.4%          23.8%          21.9%
  
  PROPERTY, PLANT & EQUIPMENT
          Depreciation rate                        8.1%           7.1%           7.4%
          Percent property, plant &
            equipment are depreciated             48.6%          46.8%          45.3%
          Capital expenditures                  $26,958 (1)     $9,153        $10,063
  
  PROFITABILITY
          Net profit margin                        3.5%           2.9%           3.7%                                          3.6%
          Gross profit margin                     18.2%          16.8%          18.5%                                         18.1%
          Operating income margin                  7.1%           5.8%           7.4%                                          7.0%
          SG & A expenses/net sales               11.1%          11.0%          11.1%                                         11.1%
          Return on average total capital          9.3%           7.6%          10.0%                                          9.6%
          Return on average equity                17.4%          10.2%          15.6%                                         14.7%
          Earnings per share                      $0.33          $0.23          $0.36                                         $1.23
  
  LEVERAGE (3)
          Total liabilities/equity               152.8%         123.1%         172.0%
          Funded debt/equity                      85.9%          77.4%         111.7%
          Funded debt/capital employed            46.2%          43.6%          52.8%
          Funded debt                           $74,612        $87,930       $131,833
          Funded debt/EBITDA (LTM)                 1.97           2.18           3.10
          EBITDA/Interest expense, net (LTM)                                                                                    8.5
  
  OTHER
          Book value per share                    $7.66          $8.98          $9.30
          Employees at quarter end                3,098          3,180          3,554
          Sales per employee (annualized)      $138,000       $125,000       $146,000
          Capital employed (3)                 $161,447       $201,467       $249,838
          Effective income tax rate               37.5%          35.0%          35.0%
          EBITDA (2)                            $10,540         $9,012        $12,643                                       $42,516
          EBITDA/net sales                        10.0%           9.1%          10.3%                                         10.0%
  (1) Expenditures for entire
  year
    (2) Earnings before interest, income taxes, and depreciation &
  amortization.
    (3) Total liabilities, long-term debt, funded debt and capital employed are 
  all net of restricted investments.
    (4) Working capital for this calculation is accounts receivable,
  inventories and accounts payable.
    (5) LTM represents "Latest Twelve
  Months"
  CULP, INC. FINANCIAL INFORMATION RELEASE
                       SALES BY PRODUCT CATEGORY/BUSINESS UNIT
     FOR THREE MONTHS AND SIX MONTHS ENDED NOVEMBER 2, 1997 AND OCTOBER 27, 1996
  
                                     (Amounts in thousands)
  THREE MONTHS ENDED (UNAUDITED)
                                   ------------------------------------------------------------
  
                                         Amounts                        Percent of Total Sales
                                   --------------------                 -----------------------
                                   November 2, October 27,   % Over
  Product Category/Business Unit      1997       1996        (Under)        1998        1997
  ------------------------------   ---------  ---------   ------------  ----------   ----------
  Upholstery Fabrics
  Culp Textures             $    24,454     24,001        1.9 %       19.9 %      22.8 %
      Rossville/Chromatex            21,602     21,722       (0.6) %      17.6 %      20.6 %
                                   ---------  ---------   ------------  ----------   ----------
                                     46,056     45,723        0.7 %       37.5 %      43.5 %
  
      Velvets/Prints                 43,928     40,233        9.2 %       35.7 %      38.2 %
  
      Phillips                       10,725          0      100.0 %        8.7 %       0.0 %
                                   ---------  ---------   ------------  ----------   ----------
                                    100,709     85,956       17.2 %       81.9 %      81.7 %
  Mattress Ticking
      Culp Home Fashions             22,217     19,248       15.4 %       18.1 %      18.3 %
                                   ---------  ---------   ------------  ----------   ----------
  
                              * $   122,926    105,204       16.8 %      100.0 %     100.0 %
                                   =========  =========   ============  ==========   ==========
  SIX MONTHS ENDED (UNAUDITED)
                                   ------------------------------------------------------------
  
                                         Amounts                        Percent of Total Sales
                                   --------------------                 -----------------------
                                   November 2, October 27,  % Over
  Product Category/Business Unit      1997       1996        (Under)      1998        1997
  ------------------------------   ---------  ---------   ------------  ----------   ----------
  Upholstery Fabrics
  Culp Textures             $    46,147     44,802        3.0 %       20.7 %      22.9 %
      Rossville/Chromatex            39,723     39,887       (0.4)%       17.9 %      20.4 %
                                   ---------  ---------   ------------  ----------   ----------
                                     85,870     84,689        1.4 %       38.6 %      43.3 %
  
      Velvets/ Prints                82,325     75,100        9.6 %       37.0 %      38.4 %
  
      Phillips                       10,725          0      100.0 %        4.8 %       0.0 %
                                   ---------  ---------   ------------  ----------   ----------
                                    178,920    159,789       12.0 %       80.4 %      81.6 %
  Matress Ticking
      Culp Home Fashions             43,504     35,944       21.0 %       19.6 %      18.4 %
                                   ---------  ---------   ------------  ----------   ----------
  
                              * $   222,424    195,733       13.6 %      100.0 %     100.0 %
                                   =========  =========   ============  ==========   ==========
  *U.S. sales were $87,622 and $79,304 for the three months of
  fiscal 1998 and fiscal 1997, respectively;
   and $162,029 and $149,860 for the six months of fiscal 1998 and
  fiscal 1997, respectively.
   The percentage increase in U.S. sales was 10 %  for the three months and
  an increase of 8 % for the six months.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                       INTERNATIONAL SALES BY GEOGRAPHIC AREA
     FOR THREE MONTHS AND SIX MONTHS ENDED NOVEMBER 2, 1997 AND OCTOBER 27, 1996
  
                                       (Amounts in thousands)
  THREE MONTHS ENDED (UNAUDITED)
                                  ------------------------------------------------------------------
  
                                          Amounts                           Percent of Total Sales
                                  -------------------------                -------------------------
                                  November 2,   October 27,    % Over
        Geographic Area              1997          1996        (Under)         1998          1997
  ----------------------------    ------------  -----------  ------------  -----------    ----------
  North America (Excluding USA) $       8,162        8,016      1.8 %         23.1 %       30.9 %
  Europe                                6,624        5,716     15.9 %         18.8 %       22.1 %
  Middle East                           7,439        5,079     46.5 %         21.1 %       19.6 %
  Far East & Asia                       9,720        5,019     93.7 %         27.5 %       19.4 %
  South America                         1,216          632     92.4 %          3.4 %        2.4 %
  All other areas                       2,143        1,438     49.0 %          6.1 %        5.6 %
                                  ------------  -----------  ------------  -----------    ----------
  
                                $      35,304       25,900     36.3 %        100.0 %      100.0 %
                                  ============  ===========  ============  ===========    ==========
  SIX MONTHS ENDED (UNAUDITED)
                                  ------------------------------------------------------------------
  
                                          Amounts                           Percent of Total Sales
                                  -------------------------                -------------------------
                                  November 2,   October 27,    % Over
        Geographic Area              1997          1996        (Under)         1998          1997
  ----------------------------    ------------  -----------  ------------  -----------    ----------
  North America (Excluding USA)  $     15,206       14,073      8.1 %         25.2 %       30.7 %
  Europe                               11,125       10,483      6.1 %         18.4 %       22.9 %
  Middle East                          14,003        9,156     52.9 %         23.2 %       20.0 %
  Far East & Asia                      15,662        8,815     77.7 %         25.9 %       19.2 %
  South America                         1,462          999     46.3 %          2.4 %        2.2 %
  All other areas                       2,937        2,347     25.1 %          4.9 %        5.1 %
                                  ------------  -----------  ------------  -----------    ----------
  
                              $        60,395       45,873     31.7 %        100.0 %      100.0 %
                                  ============  ===========  ============  ===========    ==========
  International sales, and the percentage of total sales, for each of the last six
  fiscal years  follows:  fiscal 1992-$ 34,094 (18%);  fiscal 1993-$ 40,729 (20%);
  fiscal  1994-$ 44,038  (18%);  fiscal 1995-$ 57,971 (19%);  fiscal 1996-$ 77,397
  (22%);  and fiscal  1997-$  101,571  (25%).  International  sales for the second
  quarter  represented 29% and 25% for 1998 and 1997,  respectively.  Year-to-date
  international  sales  represented  27% and 23% of total sales for 1998 and 1997,
  respectively.
  
  Certain amounts for fiscal year 1997 have been  reclassified to conform with the
  fiscal year 1998  presentation.  Additionally, certain amounts were reclassified
  from the fiscal year 1998 first quarter presentation.
  Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1996 vs 1997 vs 1998
  
                               (Amounts in thousands)
  Fiscal 1996                                       Fiscal 1997                   
                             -----------------------------------------------   ---------------------------------------------- 
  Product Category/Business Units  Q1      Q2        Q3       Q4     TOTAL         Q1     Q2        Q3        Q4      TOTAL   
  ---------------------------
  
  Upholstery Fabrics
  Culp Textures             17,584   22,715    20,685   23,400   84,384      20,801  24,001    20,389   23,027    88,218  
      Rossville/Chromatex       15,358   17,960    18,567   22,318   74,203      18,165  21,722    18,953   20,672    79,512  
                             -----------------------------------------------   ---------------------------------------------- 
                                32,942   40,675    39,252   45,718  158,587      38,966  45,723    39,342   43,699   167,730  
  
      Velvets/Prints            23,523   32,081    31,836   38,261  125,701      34,867  40,233    40,387   40,980   156,467  
  
      Phillips                                                                                                                
                                     -        -         -        -        -           -       -         -        -         -  
                             -----------------------------------------------   ---------------------------------------------- 
                                56,465   72,756    71,088   83,979  284,288      73,833  85,956    79,729   84,679   324,197  
  
  Mattress Ticking
      Culp Home Fashions        15,892   17,916    15,388   18,183   67,379      16,696  19,248    17,739   20,999    74,682  
                             -----------------------------------------------   ---------------------------------------------- 
  
                                72,357   90,672    86,476  102,162  351,667      90,529 105,204    97,468  105,678   398,879  
                             ===============================================   ==============================================
  Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1996 vs 1997 vs 1998
  
                               (Amounts in thousands)
  Fiscal 1998
                               -----------------------------------------------
  Product Category/Business Unit   Q1        Q2        Q3        Q4     TOTAL
  ---------------------------
  
  Upholstery Fabrics
  Culp Textures               21,693    24,454                      46,147
      Rossville/Chromatex         18,121    21,602                      39,723
                               -----------------------------------------------
                                  39,814    46,056                      85,870
  
      Velvets/Prints              38,397    43,928                      82,325
  
      Phillips                              10,725                      10,725
                                       -
                               -----------------------------------------------
                                  78,211   100,709                     178,920
  
  Mattress Ticking
      Culp Home Fashions          21,287    22,217                      43,504
                               -----------------------------------------------
  
                                  99,498   122,926                     222,424
                               ===============================================
  Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1996 vs 1997 vs 1998
  
                               (Amounts in thousands)
                         
  
                                                                                Percent increase(decrease) from prior year:
                                                                                      Product Category/Business Units
  -------------------------------------------------------------------------------------------------------------------------------
                                              Fiscal 1996                                       Fiscal 1997                      
                             -----------------------------------------------   --------------------------------------------------
  Upholstery Fabrics
  Culp Textures              (10.3)    (0.5)     (1.2)     7.6     (0.9)       18.3     5.7      (1.4)    (1.6)       4.5 3  
      Rossville/Chromatex          1.4     14.0      13.2     35.5     16.4        18.3    20.9       2.1     (7.4)       7.2 2) 
                             -----------------------------------------------   --------------------------------------------------
                                 (5.2)      5.4       5.1     19.7      6.5        18.3    12.4       0.2     (4.4)       5.8 2  
  
      Velvets/Prints              13.9     21.3      12.5     21.8     17.7        48.2    25.4      26.9      7.1       24.5 1  
  
      Phillips                                                                                                                
                                     -        -         -        -        -           -       -         -        -         -     
                             -----------------------------------------------   --------------------------------------------------
                                   1.9     11.9       8.3     20.6     11.2        30.8    18.1      12.2      0.8      14.0     
  
  Mattress Ticking
      Culp Home Fashions          45.1     33.6      26.7     14.9     28.8         5.1     7.4      15.3     15.5      10.8     
                             -----------------------------------------------   -------------------------------------------------
  
                                   9.1     15.6      11.2     19.6     14.2        25.1    16.0      12.7      3.4      13.4     
                             ===============================================   =================================================
  
     Overall Growth Rate
  
  Internal (without acquisitions)  6.4     13.0       8.7     19.6     12.3        25.1    16.0      12.7      3.4      13.4     
  External                         2.7      2.6       2.5               1.9                                                      
                                                                 -                    -       -         -        -         -  
                             -----------------------------------------------   -------------------------------------------------
                             ===============================================   =================================================
  Percent increase(decrease) from prior year:
                           Product Category/Business Units
  ----------------------------------------------------------------------------
                                               Fiscal 1998
                               -----------------------------------------------
  Upholstery Fabrics
  Culp Textures                  4.3       1.9                        3.0
      Rossville/Chromatex           (0.2)     (0.6)                      (0.4)
                              -----------------------------------------------
                                     2.2       0.7                        1.4
  
      Velvets/Prints                10.1       9.2                        9.6
  
      Phillips                       -                                    -
                              -----------------------------------------------
                                    5.9       17.2                       12.0
  
  Mattress Ticking
      Culp Home Fashions           27.5       15.4                       21.0
                              -----------------------------------------------
  
                                    9.9       16.8                       13.6
                              ===============================================
  
     Overall Growth Rate
  
  Internal (without acquisitions)   9.9       6.6                        8.1
  External                                   10.2                        5.5
                              -----------------------------------------------                                                      
                              ===============================================
  (Page 8 of 11)
   
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
   for the three and six month periods ended November 2, 1997 and October 27, 1996
  
  INCOME STATEMENT COMMENTS
  
  GENERAL - Net sales increased 16.8 % to $122.9 million and net income  increased
  21.4% to $ 4.5 million for the second quarter, as compared with the same quarter
  of last year.  This  performance  marks the 20th  consecutive  quarter of record
  earnings and the 18th  consecutive  quarter of record sales (based on comparable
  year-earlier  periods).  Net sales for the quarter  without  including  Phillips
  Mills  increased  6.7% versus the same quarter of last year.  The  company's net
  profit margin increased slightly to 3.7 % from 3.5 % for the quarter.  Also, the
  company  achieved  a return on  average  shareholder's  equity of 12.9 % for the
  first six months.  The company  acquired  Phillips Mills at the beginning of the
  second  quarter and the Phillips  results are included  beginning with the first
  day of the quarter  (August 4, 1997).  The company  attributes  this  consistent
  record to several key competitive strengths:
  
  Diverse Global Customer Base - penetrating  other end-use markets in addition to
  U.  S.  residential  furniture,  such  as  bedding,  international,   commercial
  furniture and juvenile  furniture;  sales to these other  markets  accounted for
  approximately 50% of net sales during the second quarter;  additionally,  no one
  customer accounted for more than 7% of sales during the second quarter of fiscal
  1998;
  
  Design  Innovation  - investing  in the  creative  aspect of our  business - the
  company  has   significantly   increased  the  resources   (both  designers  and
  computer-aided  design  (CAD)  systems)  dedicated  to the  design  and  product
  development areas in each business unit; the company's in-house design staff now
  includes  over 50 people.  Additionally,  the  company is  planning  to open its
  state-of-the-art design center in Burlington, North Carolina during January 1998
  that will  bring  together  most of its design  resources  in one  facility  and
  utilize advanced CAD systems and technology.
  
  Vertical  Integration  -  realizing  additional  manufacturing   integration  by
  producing  various raw material  components  that are used in the manufacture of
  its products; and
  
  Ability to  Identify  and  Integrate  Acquisitions  -  investing  in  selective,
  accretive acquisitions in complementary businesses which we know and understand,
  and that  strengthen  existing  marketing  positions or add  strategic  vertical
  manufacturing capabilities.
  
  NET SALES - Compared  with the second  quarter of last year,  upholstery  fabric
  sales  increased  17.2% to $100.7 million and mattress  ticking sales  increased
  15.4% to $22.2  million for the quarter (See Sales by Business  Unit schedule on
  Page 5 and Sales by  Business  Unit - Trend  Analysis  on Page 7). The growth in
  upholstery  fabric  sales  for  the  second  quarter   primarily   reflects  the
  incremental  sales from the Phillips  acquisition  of $10.7 million and gains in
  Velvets/Prints   -   up   9.2%;   other   changes   by   business   unit   were:
  Rossville/Chromatex  - down 0.6 %; and Culp  Textures  - up 1.9%.  The growth in
  demand in sales for upholstery  fabrics from U.S.  manufacturers  of residential
  furniture as a group began slowing  during the second half of fiscal 1997.  That
  pattern has  continued  thus far into fiscal  1998.  The  company  believes  the
  financial difficulties of a number of significant furniture retailers, including
  the recent  bankruptcies  of Levitz and  Montgomery  Wards,  have  significantly
  contributed  to the slower rate of growth.  Business with  U.S.-based  customers
  increased 10% from a year ago while sales to customers outside the United States
  rose 36% for the  quarter.  The sales gains in the U.S.  relate to the  bedding,
  commercial  and  juvenile  markets,  while the sales  gains  outside of the U.S.
  relate  principally to the residential  furniture  market.  Sales of wet printed
  flock  upholstery  fabrics,  which remain one of the company's  growing  product
  categories  internationally,  increased  57.0% from the same quarter a year ago.
  The increased  sales by Culp Home Fashions  during the second quarter (up 15.4%)
  reflect  the  continued   positive  response  to  the  new  designs  and  fabric
  constructions,  notably in  printed  jacquard  ticking.  The growth in Culp Home
  Fashions has been significantly aided by the company's  investment in additional
  weaving capacity to manufacture wide jacquard  greige,  or unfinished,  goods at
  the company's  Rayonese facility in Canada.  These greige goods are then further
  processed at other  facilities by printing,  dyeing and other finishing steps to
  produce mattress ticking.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
   for the three and six month periods ended November 2, 1997 and October 27, 1996
  
  International  sales were up 36.3% for the quarter.  International  sales in all
  major regions and each  business unit were strong,  and accounted for 29% of net
  sales for the quarter.  (See International  Sales by Geographic Area schedule on
  page 6.) The vast  majority  of  international  sales  are  denominated  in U.S.
  dollars.
  
  GROSS PROFIT - The gross profit  increase of 18.9% for the second quarter versus
  the same  quarter  of last year  reflects  a  substantial  gain in the Culp Home
  Fashions  business unit, the incremental gross profit from the Phillips business
  unit, a moderate increase in Rossville/Chromatex, flat results in Velvets/Prints
  and lower results in Culp  Textures.  The overall gross profit margin  increased
  slightly to 18.5% for the quarter versus 18.2% in the same quarter of last year.
  The company is benefiting  significantly from its international sales growth and
  the operation of its jacquard greige goods facility in Canada (Rayonese),  which
  also will complete a major  expansion of wide weaving  capacity during the third
  quarter. Factors which adversely affected the company's profitability during the
  quarter  included:  (a)  slower  growth in demand  from  U.S.  manufacturers  of
  residential  furniture;  and (b) start-up costs related to expansion projects in
  the Velvets/Prints  business unit (flock coating line, the new printing facility
  in Lumberton,  N.C. and the integration of the Phillips velvet products into new
  facilities  which  resulted  from the closing of the  Phillips  velvet  plant in
  August ). The company  believes  the  majority of the  start-up  and  transition
  issues are now resolved.
  
  S,G&A EXPENSES - S,G&A expenses for the second quarter were  essentially flat as
  a  percentage  of sales  versus the same  period of last year.  The  increase in
  absolute dollars is principally due to incremental  S,G&A expenses for Phillips,
  higher  sales  commissions   related  to  international  sales  and  significant
  investments in additional design resources,  which were offset by lower accruals
  for incentive-based compensation plans and other factors.
  
  INTEREST  EXPENSE - The increase for the second  quarter of 46.5 % over the same
  quarter  of last year is due to higher  average  borrowings  outstanding,  which
  resulted from the company's  acquisition  of Phillips Mills that was made on the
  first day of this  quarter,  and from capital  expenditure  and working  capital
  investments that were made during the first half of this year. . INTEREST INCOME
  - Interest  income  increased for the quarter due to the higher level of unspent
  IRB  borrowings  which are  reported as  Restricted  Investments  on the balance
  sheet.
  
  OTHER EXPENSE (INCOME),  NET - Other expense (income) increased to $425,000 from
  $301,000 in the same  quarter of last year,  due  primarily  to the  incremental
  goodwill amortization related to Phillips.
  
  INCOME TAXES - The effective tax rate for the second quarter was 35.0%, compared
  with 37.5 % for the same quarter of last year, due to the lower tax rate related
  to an estimated  higher amount of Canadian income and tax benefits related to an
  estimated higher level of international sales.
  
  EBITDA - EBITDA for the  quarter  increased  20.0 % to $12.6  million  from last
  year's second quarter and  represented  10.3 % of net sales compared with 10.0 %
  of net sales for the same period of last year.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
   for the three and six month periods ended November 2, 1997 and October 27, 1996
  
  BALANCE SHEET COMMENTS
  
  WORKING CAPITAL - Accounts receivable  increased 42.4% from October 1996, due to
  the Phillips acquisition and increased sales for the second quarter.  Days sales
  outstanding represented 55 days, up from 45 days at October 27, 1996 and 49 days
  at April 27, 1997.  Accounts  receivable  continued to increase at a faster rate
  than sales because of the  increasing  mix of  international  sales and mattress
  ticking  sales,  which carry longer  payment terms than U.S.  upholstery  fabric
  sales.  Inventories  increased 34.2% from October 27, 1996. inventory turns were
  6.1 versus 6.6 for last year's second.  Operating working capital  (comprised of
  accounts receivable,  inventory and accounts payable) increased significantly to
  $107.8  million at November 2, 1997,  from $77.6 million at October 27, 1996 and
  $80.3 million at April 27, 1997, for the reasons mentioned above.
   
  PROPERTY, PLANT AND EQUIPMENT - The company has maintained a significant program
  of capital  expenditures over the past several years designed to expand capacity
  to support sales growth,  increase  vertical  integration to lower product costs
  and  control  more of its supply of raw  materials,  and  enhance  manufacturing
  efficiencies  through  modernization.  The company is currently planning capital
  spending of  approximately  $36 million during fiscal 1998, which includes about
  $12.5  million  for  expansion   projects  (35%);  $10.5  million  for  vertical
  integration projects (29%); and $13.0 million for modernization  projects (36%).
  The principal  expansion project involves completion of various items related to
  the Lumberton,  N.C. printing facility.  The key vertical  integration  projects
  include yarn extrusion  expansion and additional  weaving  capacity for jacquard
  greige  goods at  Rayonese.  The  modernization  projects  encompass a number of
  smaller projects throughout the company's  operations.  Depreciation expense for
  fiscal 1998 is expected to be approximately $15.0 million.
  
  LONG-TERM  DEBT - The  company's  funded  debt-to-capital  ratio  was  52.8 % at
  November 2, 1997, up from 46.2% at October 27, 1996, and up from 37.2 % at April
  27,  1997.  Funded debt was $131.8  million at November 2, 1997,  up from $ 74.6
  million at October  27, 1996 and up from $ 65.6  million at April 1997.  (Funded
  debt equals  long-term  debt,  including  current  maturities,  less  restricted
  investments,  which  represent  unspent IRB funds.) The  increase in funded debt
  from April 1997 resulted from the Phillips acquisition ($36.6 million),  capital
  expenditures ($19.2 million), an operating cash flow deficit ($5.1 million), and
  a decrease in accounts payable related to capital  expenditures  ($3.9 million).
  The sources of financing used to fund the Phillips  acquisition  were borrowings
  under the company's revolving credit facility in the amount of $31 million and a
  note payable from the seller of $6 million.
  
  PHILLIPS  ACQUISITION - On August 5, 1997, the company acquired the business and
  certain  assets  relating  to the  upholstery  fabric  businesses  operating  as
  Phillips  Mills.  Based  on the  terms  of the  asset  purchase  agreement,  the
  transaction is valued at approximately $37 million,  which included cash, seller
  debt  retired,  a  note  payable  to  the  seller  and  acquisition  costs.  The
  consideration  for the acquisition  also included stock options and an agreement
  for contingent  payments to the selling  companies  within three years following
  closing that could range from $0 to $5,500,000,  depending upon the future sales
  performance of the Phillips  jacquard  fabric product line. (See Form 8-K, dated
  April 30, 1997, which provides additional information related to the acquisition
   .)
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
   for the three and six month periods ended November 2, 1997 and October 27, 1996
  
  PENDING ACQUISITION OF ARTEE INDUSTRIES - On October 14, 1997, Culp entered into
  a definitive ASSET PURCHASE  AGREEMENT to acquire the business and substantially
  all assets and to assume certain  liabilities of Artee Industries,  Incorporated
  ("Artee"), a yarn manufacturer. The transaction value at closing is estimated at
  $17.4  million,  and includes  the issuance of new shares of Culp common  stock,
  cash and a note, as well as the repayment at closing of Artee's interest-bearing
  debt. Also, there is an "earn-out" which provides the opportunity for additional
  consideration  of up to $7.2 million (60% in stock and 40% in cash),  based upon
  the  profitability  of Artee during Culp's  fiscal year ending May 2, 1999.  The
  acquisition  will be accounted  for as a purchase,  and therefore the results of
  Artee from the closing date will be included in Culp's  results.  Closing of the
  transaction  is  expected  on May 4,  1998,  or  possibly  earlier,  if  certain
  profitability  levels are  reached.  Conditions  to closing are set forth in the
  agreement and include, among other things, the satisfactory completion of Culp's
  due diligence and a minimum net worth requirement.  (See Form 8-K, dated October
  15, 1997, which provides additional information related to the acquisition.)