content: --------------------------------------------------------------------------------
  
                                    UNITED STATES
                         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) February 24, 2004
  
                                     CULP, INC.
  
               (Exact name of registrant as specified in its charter)
  
  
    North Carolina                       0-12781                   56-1001967
  (State or other jurisdiction of   (Commission File No.)         (IRS Employer
         incorporation)                                        Identification No.)
  
  
  
                                101 South Main Street
                          High Point, North Carolina 27260
                      (Address of principal executive offices)
                                   (336) 889-5161
                (Registrant's telephone number, including area code)
  
  
  
  
  
            (Former name or former address, if changed since last report)
  
  
  
  
  
  --------------------------------------------------------------------------------
  
  
  
  <PAGE>
  
  
                                                       INDEX
  
  
  
                                                                        Page
  Item 7 -  Exhibits                                                      3
  Item 12 - Results of Operations and Financial Condition                 3
  Signature                                                               4
  Exhibits
  
  
  
  <PAGE>
  
  
  
  
      Item 7 -- Exhibits
  
      99(a)  News Release dated February 24, 2004
  
      99(b)  Financial Information Release dated February 24, 2004
  
      Item 12 -- Results of Operations and Financial Condition
  
  On February 24, 2004,  Culp,  Inc. (the  "Registrant")  issued a news release to
  announce its financial  results for the quarter ended February 1, 2004. The news
  release is attached hereto as Exhibit 99(a).
  
  Also on February  24,  2004,  the  Registrant  released a Financial  Information
  Release containing  additional  financial  information and disclosures about the
  Registrant's  third  quarter  ended  February  1,  2004.  The news  release  and
  financial  information  release  contain  disclosures  about free cash  flow,  a
  non-GAAP   performance   measure,   that  management  believes  provides  useful
  information to investors  because it measures the company's  available cash flow
  for potential debt  repayment,  stock  repurchases  and additions to cash,  cash
  equivalents  and  short-term  investments.  In  addition,  the news  release and
  financial information release contain proforma income statements which reconcile
  the  reported   income   statements   with  proforma   results,   which  exclude
  restructuring   and  related  charges,   one-time   expenses  related  to  early
  extinguishment of debt, and cumulative effect of accounting  change. The company
  has included this proforma information in order to show operational  performance
  excluding  the effects of  restructuring  charges and expenses  related to early
  debt repayment that are not expected to occur on a regular basis.
  
  
  Forward  Looking  Information.  This  Report and the  exhibits  attached  hereto
  contain  statements that may be deemed  "forward-looking  statements" within the
  meaning  of the  federal  securities  laws,  including  the  Private  Securities
  Litigation  Reform Act of 1995  (Section 27A  of the  Securities Act of 1933 and
  Section 27A of the  Securities  and Exchange Act of 1934).  Such  statements are
  inherently  subject  to  risks  and  uncertainties.   Further,  forward  looking
  statements  are  intended  to speak  only as of the date on which they are made.
  Forward-looking statements are statements that include projections, expectations
  or beliefs  about future  events or results or otherwise  are not  statements of
  historical  fact.  Such  statements  are often but not always  characterized  by
  qualifying words such as "expect,"  "believe,"  "estimate," "plan" and "project"
  and their  derivatives,  and  include but are not  limited to  statements  about
  expectations for the company's future sales, gross profit margins, SG&A or other
  expenses,  and earnings,  as well as any statements regarding the company's view
  of estimates of the  company's  future  results by analysts.  Factors that could
  influence the matters discussed in such statements  include the level of housing
  starts and sales of existing homes,  consumer  confidence,  trends in disposable
  income, and general economic conditions.  Decreases in these economic indicators
  could have a negative effect on the company's business and prospects.  Likewise,
  increases in interest rates,  particularly home mortgage rates, and increases in
  consumer  debt or the  general  rate of  inflation,  could  affect  the  company
  adversely.  In  addition,  strengthening  of  the U.  S.  dollar  against  other
  currencies  could make the company's  products less  competitive on the basis of
  price in markets  outside  the  United  States.  Also,  economic  and  political
  instability  in  international  areas could affect the  company's  operations or
  sources of goods in those areas, as well as demand for the company's products in
  international  markets.  Finally,  unanticipated  delays  or costs in  executing
  restructuring actions could cause the cumulative effect of restructuring actions
  to fail to meet the objectives set forth by management. Other factors that could
  affect the matters  discussed in forward looking  statements are included in the
  company's periodic reports filed with the Securities and Exchange Commission.
  
  
  <PAGE>
  
  
  
  
  
  
  
                                             SIGNATURE
  
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
  
                                              CULP, INC.
                                              (Registrant)
  
  
                                      By:      Franklin N. Saxon
                                               ------------------
                                               Executive Vice President and
                                               Chief Financial Officer
  
  
  
  
  
  Dated:  February 24, 2004
  
  <PAGE>
  Exhibit 99(a)
                                    NEWS RELEASE
  
  Investor Contact: Kathy J. Hardy         Media Contact:   Kenneth M. Ludwig
                    Corporate Secretary                     Senior Vice President,
                    336-888-6209                            Human Resources
                                                            336-889-5161
  
  
                  CULP ANNOUNCES THIRD QUARTER FISCAL 2004 RESULTS
  
  HIGH POINT,  N.C.  (February 24, 2004) - Culp, Inc.  (NYSE:  CFI) today reported
  financial  and  operating  results for the third  quarter and nine months  ended
  February 1, 2004. The highlights for the quarter include:
  
  o       Net income of $0.16 per diluted share, excluding a charge for the early
          extinguishment of debt
  
  o       Gross profit margin of 18.9%, driven by continued improvement in the
          upholstery fabrics segment
  
  o       Prepayment of $25 million of the company's $75 million of outstanding
          senior notes
  
  o       Debt to capital ratio reduced to 33.9%, the lowest level for Culp since
          fiscal 1993
  
  o       Earnings expectation for the fourth quarter of fiscal 2004 is $0.31 to
          $0.35 per diluted share.
  
       For the three months ended  February 1, 2004, net sales were $76.6 million,
  compared  with $79.5  million a year ago.  The  company  reported  net income of
  $752,000,  or $0.06 per diluted share, for the third quarter of fiscal 2004. The
  results for the third fiscal quarter  include a one-time charge of $1.7 million,
  or $0.10 per diluted  share,  related to the  previously  announced  $25 million
  prepayment of the company's $75 million of outstanding  senior notes.  Excluding
  this  charge  for the early  extinguishment  of debt,  net  income for the third
  fiscal  quarter  was  $1.9 million,  or $0.16 per  diluted  share.  The  company
  reported  net income of $1.7  million,  or $0.14 per  diluted  share,  including
  restructuring  and related  charges for the third  quarter of fiscal  2003.  The
  financial  results  for the  third  quarter  of fiscal  2003  include a total of
  $397,000 in  restructuring  and related  charges.  Excluding these charges,  net
  income  for the third  fiscal  quarter  of 2003 was $1.9  million,  or $0.16 per
  diluted  share.  (A  reconciliation  to the net  income and  earnings  per share
  calculations has been set forth on Page 5.)
  
       For the nine months ended February 1, 2004, the company  reported net sales
  of  $233.0 million  compared with $249.2 million for the same period a year ago.
  Net income for the first nine months of fiscal 2004 was $3.5  million,  or $0.30
  per  diluted  share,  compared  with a net loss of $28.2  million,  or $2.46 per
  diluted share,  including  restructuring  charges and the  cumulative  effect of
  accounting  change,  for the first nine  months of fiscal  2003.  Excluding  the
  $1.7 million  charge for the early  extinguishment  of debt described above, net
  income for the first nine months of fiscal 2004 was $4.6  million,  or $0.39 per
  diluted share.  Excluding  restructuring  and related charges and the cumulative
  effect of accounting change, net income for the first nine months of fiscal 2003
  was $5.1 million, or $0.43 per diluted share. The year-to-date period for fiscal
  2004 included 40 weeks versus 39 weeks for the same period of fiscal 2003.
  <PAGE>
  
       "Our  results  for the  third  fiscal  quarter  of 2004  reflect  continued
  productivity improvement and solid profitability in spite of a modest decline in
  sales,"  remarked  Robert G. Culp,  III, chief  executive  officer of Culp, Inc.
  "Mattress ticking sales continued to gain momentum with a 6.9% increase over the
  prior year period,  and a 5.8% increase for the fiscal year to date. This growth
  trend is  particularly  meaningful  in light of the bedding  industry's  ongoing
  transition to selling predominantly  one-sided  mattresses,  which utilize about
  one-third  less  fabric.  Upholstery  fabric sales  declined  8.1% over the same
  period last year, primarily related to consumer preference for leather furniture
  and competition from imported fabrics and cut and sewn kits. However,  our gross
  profit  margin for the quarter was 18.9%,  the highest in sixteen  years for the
  company's third quarter. This improved profitability reflects gains in operating
  efficiencies within the upholstery fabrics segment.  Our ability to drive higher
  gross  profit  margins  in this  segment  confirms  the  value of our  strategic
  initiatives  over  the past  year to  streamline  our  operations  and  focus on
  improving the profitability of our sales mix.
  
       "Strengthening  our  balance  sheet  has been an  important  focus  for our
  company,"  added Culp.  "During the third fiscal  quarter,  we elected to make a
  $25.0 million prepayment on $75.0 million of outstanding senior notes. Including
  this  prepayment,  we have  generated  sufficient  free cash flow to reduce  our
  long-term debt by a total of $86.0 million over the past three and a half years.
  By taking this  opportunity to further reduce our debt on favorable  terms,  our
  long-term  debt  now  stands  at  $51.1  million.  As a  result,  our  long-term
  debt-to-capital  ratio  improved to 33.9% at the end of the third fiscal quarter
  of 2004,  compared with 51.1% a year ago. We will realize  annualized savings of
  approximately $1.7 million,  or $0.09 per share, in net interest expense in each
  of the next two years,  and a declining  amount over the remainder of the notes'
  term until 2010."
  
       Culp added,  "While the home furnishings retail  environment  appears to be
  improving,  we anticipate our  consolidated  sales for the fourth fiscal quarter
  will decrease  slightly over last year's level.  Mattress  ticking segment sales
  are expected to continue to increase over the prior year and we believe the gain
  will be  significantly  higher  than  the 6.9  percent  increase  this  quarter.
  Upholstery  fabrics segment sales are expected to decline at about the same rate
  we experienced this quarter.  Based on these sales  expectations and the current
  industry outlook,  we expect to report net income in the range of $0.31 to $0.35
  per share  diluted  for the  fourth  fiscal  quarter,  with the  actual  results
  depending  primarily  upon the level of demand  throughout  the quarter.  Culp's
  results to date  demonstrate  the strength of our  operations and our ability to
  execute our  strategy,  and we look forward to building on this momentum for the
  remainder of fiscal 2004."
  
       Culp,  Inc. is one of the world's largest  marketers of upholstery  fabrics
  for furniture  and is a leading  marketer of mattress  ticking for bedding.  The
  Company's  fabrics are used  principally in the  production of  residential  and
  commercial furniture and bedding products.
  
       This  release  contains  statements  that  may be  deemed  "forward-looking
  statements"  within the meaning of the federal  securities  laws,  including the
  Private Securities  Litigation Reform Act of 1995 (Section 27A of the Securities
  Act of 1933 and Section 27A of the  Securities  and Exchange Act of 1934).  Such
  statements  are  inherently  subject  to  risks  and   uncertainties.   Further,
  forward-looking  statements  are  intended to speak only as of the date on which
  they  are  made.   Forward-looking   statements  are  statements   that  include
  projections, expectations or beliefs about future events or results or otherwise
  are not statements of historical  fact. Such statements are often but not always
  characterized  by  qualifying  words such as  "expect,"  "believe,"  "estimate,"
  "plan" and "project" and their  derivatives,  and include but are not limited to
  statements  about  expectations  for the company's  future  sales,  gross profit
  margins,  SG&A or  other  expenses,  and  earnings,  as  well as any  statements
  regarding the company's  view of estimates of the  company's  future  results by
  analysts.  Factors that could influence the matters discussed in such statements
  include  the level of  housing  starts  and sales of  existing  homes,  consumer
  confidence,  trends in  disposable  income,  and  general  economic  conditions.
  Decreases  in these  economic  indicators  could have a  negative  effect on the
  company's  business  and  prospects.  Likewise,  increases  in  interest  rates,
  particularly  home mortgage rates, and increases in consumer debt or the general
  rate  of   inflation,   could  affect  the  company   adversely.   In  addition,
  strengthening  of the U. S.  dollar  against  other  currencies  could  make the
  company's products less competitive on the basis of price in markets outside the
  United States.  Also, economic and political  instability in international areas
  could affect the  company's  operations  or sources of goods in those areas,  as
  well as demand for the company's  products in  international  markets.  Finally,
  unanticipated delays or costs in executing restructuring actions could cause the
  cumulative  effect of  restructuring  actions to fail to meet the objectives set
  forth by  management.  Other factors that could affect the matters  discussed in
  forward-looking  statements are included in the company's periodic reports filed
  with the Securities and Exchange Commission.
  
  
  <PAGE>
  
  
                                     CULP, INC.
                           Condensed Financial Highlights
                                     (Unaudited)
  <TABLE>
  <CAPTION>
  
                                                                       Three Months Ended
                                                                 -------------------------------
                                                                   February 1,     January 26,
                                                                      2004            2003
                                                                 -------------    --------------
  <S>                                                            <C>              <C>
  Net sales                                                      $  76,561,000    $  79,492,000
  Net income                                                     $     752,000    $   1,667,000
  Net income per share:
     Basic                                                       $        0.07    $        0.15
     Diluted                                                     $        0.06    $        0.14
  Net income per share, diluted, excluding restructuring
     and related charges and early extinguishment of debt*       $        0.16    $        0.16
  Average shares outstanding:
     Basic                                                          11,529,000       11,485,000
     Diluted                                                        11,859,000       11,714,000
  
  
                                                                        Nine Months Ended
                                                                 -------------------------------
                                                                   February 1,     January 26,
                                                                      2004            2003
                                                                 -------------    --------------
  Net sales                                                      $ 232,968,000    $ 249,240,000
                                                                 =============    ==============
  
  Income (loss) before cumulative effect of accounting change    $   3,487,000    $  (4,008,000)
  Cumulative effect of accounting change, net of income taxes              -0-      (24,151,000)
                                                                 -------------    --------------
  Net income (loss)                                              $   3,487,000    $ (28,159,000)
                                                                 =============    ==============
  Basic and diluted income (loss) per share:
    Income (loss) before cumulative effect of accounting change  $        0.30    $       (0.35)
    Cumulative effect of accounting change                                0.00            (2.11)
                                                                 -------------    --------------
  
  Net income (loss) per share                                    $        0.30    $       (2.46)
                                                                 =============    ==============
  Net income per share, diluted, excluding restructuring
    and related charges, early extinguishment of debt and
    cumulative effect of accounting change**                     $        0.39    $        0.43
  
  Average shares outstanding:
     Basic                                                          11,522,000       11,450,000
     Diluted                                                        11,764,000       11,450,000
  
  * Excludes charge for early extinguishment of debt of $1.7 million, or $0.10 per
    diluted share, for the third quarter of fiscal 2004. Excludes  restructuring
    and related charges of $397,000 ($240,000,  or $0.02 per diluted share, after
    taxes) for the third quarter of fiscal 2003.
  
  ** Excludes charge for early  extinguishment  of debt of $1.7 million,  or $0.10
     per diluted share, for the first nine months of fiscal 2004. Excludes
     cumulative effect of accounting  change,  net of income taxes,  of $24.2
     million ($2.11 per diluted share) for the first nine months of fiscal 2003.
     Excludes  restructuring and related charges of $14.9 million ($9.1 million,
     or $0.80 per share diluted, after taxes) for the first nine months of fiscal
     2003.
  </TABLE>
  
  
  <PAGE>
  
                                     CULP, INC.
  
       Reconciliation of Net Income (Loss) as Reported to Pro Forma Net Income
                                     (Unaudited)
  <TABLE>
  <CAPTION>
  
                                      Three Months Ended                Nine Months Ended
                                 -----------------------------   -----------------------------
                                  February 1,      January 26,     February 1,     January 26,
                                     2004             2003            2004            2003
                                 -------------   -------------   -------------    ------------
  <S>                            <C>             <C>             <C>              <C>
  Net income (loss), as reported $     752,000   $   1,667,000   $   3,487,000    $(28,159,000)
  Cumulative effect of
    accounting change, net of
    income taxes                            --              --              --      24,151,000
  Restructuring and related
    charges, net of income taxes            --         240,000              --       9,114,000
  Early extinguishment of debt,
    net of income taxes              1,120,000              --       1,120,000              --
                                 -------------   -------------   -------------    ------------
  Pro forma net income (loss)    $   1,872,000   $   1,907,000   $   4,607,000    $  5,106,000
                                 =============   =============   =============    ============
  
  
              Reconciliation of Net Income (Loss) Per Share as Reported
                          to Pro Forma Net Income Per Share
                                     (Unaudited)
  
  Diluted net income (loss) per
    share                        $        0.06   $        0.14   $        0.30    $       (2.46)
  Cumulative effect of
    accounting change, net of
    income taxes                            --              --              --             2.11
  Restructuring and related
    charges, net of income taxes            --            0.02              --             0.80
  Early extinguishment of debt,
    net of income taxes                   0.10              --            0.10              --
  Effect of dilutive stock options          --              --           (0.01)           (0.02)
                                  ------------    ------------     ------------     ------------
  Diluted net income
    per share, adjusted          $        0.16   $        0.16    $       0.39     $       0.43
                                  ============    ============     ============     ============
  
  </TABLE>
  
            Reconciliation of Cash Flow from Operations to Free Cash Flow
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                        Nine Months Ended
                                                                 -----------------------------
                                                                   February 1,     January 26,
                                                                      2004            2003
                                                                 -------------    ------------
  <S>                                                            <C>              <C>
  Cash flow from operations                                      $  16,782,000    $ 23,864,000
  Capital expenditures                                              (4,097,000)     (5,224,000)
  Change in accounts payable-capital expenditures                   (2,772,000)       (778,000)
                                                                 -------------    ------------
  Free cash flow                                                 $   9,913,000    $ 17,862,000
                                                                 =============    ============
  </TABLE>
  
  
  
  
  <PAGE>
  Exhibit 99(b)
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                      CONSOLIDATED STATEMENTS OF INCOME (LOSS)
  FOR THE THREE MONTHS AND NINE MONTHS ENDED FEBRUARY 1, 2004 AND JANUARY 26, 2003
                                     (UNAUDITED)
                  (Amounts in Thousands, Except for Per Share Data)
  
  <TABLE>
  <CAPTION>
                                                                                     THREE MONTHS ENDED
                                                       ----------------------------------------------------------------------------
                                                                 Amounts                                    Percent of Sales
                                                       ---------------------------                   ------------------------------
                                                       February 1,     January 26,      % Over       February 1,      January 26,
                                                           2004           2003         (Under)           2004            2003
                                                       -------------   -----------   ------------    --------------   -------------
  <S>                                              <C>                   <C>          <C>               <C>             <C>
  Net sales                                        $         76,561        79,492       (3.7) %           100.0 %         100.0 %
  Cost of sales                                              62,093        65,704       (5.5) %            81.1 %          82.7 %
                                                       -------------   -----------   -----------    --------------   -------------
       Gross profit                                          14,468        13,788        4.9  %            18.9 %          17.3 %
  
  Selling, general and
    administrative expenses                                  10,282         9,798        4.9  %            13.4 %          12.3 %
  Restructuring expense                                           0          (354)    (100.0) %             0.0 %          (0.4)%
                                                       -------------   -----------   -----------    --------------   -------------
       Income  from operations                                4,186         4,344        3.6  %             5.5 %           5.5 %
  
  Interest expense                                            1,534         1,665       (7.9) %             2.0 %           2.1 %
  Interest income                                              (113)         (143)     (21.0) %            (0.1)%          (0.2)%
  Early extinguishment of debt                                1,672             0      100.0  %             2.2 %           0.0 %
  Other expense (income), net                                   229           192       19.3  %             0.3 %           0.2 %
                                                       -------------   -----------   -----------    --------------   -------------
       Income before income taxes                               864         2,630      (67.1) %             1.1 %           3.3 %
  
  Income taxes*                                                 112           963      (88.4) %            13.0 %          36.6 %
                                                       -------------   -----------   -----------    --------------   -------------
  
       Net income                                  $            752         1,667       54.9  %             1.0 %           2.1 %
                                                       =============   ===========   ===========    ==============   =============
  
  Net income  per share-basic                                 $0.07         $0.15      (53.3) %
  Net income per share-diluted                                $0.06         $0.14      (57.1) %
  Net income per share, diluted, excluding                    $0.16         $0.16        0.0  %
    restructuring and related charges and early
    extinguishment of debt (see proforma statement
    on page 6)
  Average shares outstanding-basic                           11,529        11,485        0.4  %
  Average shares outstanding-diluted                         11,859        11,714        1.2  %
  
  
  
                                                                                      NINE MONTHS ENDED
                                                       ----------------------------------------------------------------------------
                                                                  Amounts                                      Percent of Sales
                                                       ---------------------------                   ------------------------------
                                                       February 1,     January 26,      % Over       February 1,       January 26,
                                                           2004           2003         (Under)           2004             2003
                                                       -------------   -----------   ------------    --------------   -------------
  
  Net sales                                        $        232,968       249,240       (6.5) %           100.0 %         100.0 %
  Cost of sales                                             190,283       207,855       (8.5) %            81.7 %          83.4 %
                                                       -------------   -----------   -----------    --------------   -------------
       Gross profit                                          42,685        41,385        3.1  %            18.3 %          16.6 %
  
  Selling, general and
    administrative expenses                                  31,089        29,716        4.6  %            13.3 %          11.9 %
  Restructuring expense                                           0        13,006     (100.0) %             0.0 %           5.2 %
                                                       -------------   -----------   -----------    --------------   -------------
       Income (loss) from operations                         11,596        (1,337)     967.3  %             5.0 %          (0.5)%
  
  Interest expense                                            4,540         5,244      (13.4) %             1.9 %           2.1 %
  Interest income                                              (356)         (414)     (14.0) %            (0.2)%          (0.2)%
  Early extinguishment of debt                                1,672             0      100.0  %             0.7 %           0.0 %
  Other expense (income), net                                   536           645      (16.9) %             0.2 %           0.3 %
                                                       -------------   -----------   -----------    --------------   -------------
       Income (loss) before income taxes                      5,204        (6,812)     176.4  %             2.2 %          (2.7)%
  
  Income taxes*                                               1,717        (2,804)     161.2  %            33.0 %          41.2 %
                                                       -------------   -----------   -----------    --------------   -------------
  Income (loss) before cumulative effect of                   3,487        (4,008)     187.0  %             1.5 %          (1.6)%
     accounting change                                                                               ===========      ==========
  
  Cumulative effect of accounting change, net of
     income taxes                                                 0       (24,151)
                                                       -------------   -----------
  
       Net income (loss)                           $          3,487       (28,159)
                                                       =============   ===========
  <PAGE>
  
  Basic income (loss) per share:
       Income (loss) before cumulative effect of
          accounting change                        $           0.30         (0.35)     186.5  %
       Cumulative effect of accounting change                  0.00         (2.11)     100.0  %
                                                       -------------   -----------   --------
       Net income (loss)                           $           0.30         (2.46)     112.3  %
                                                       =============   ===========   ========
  
  Diluted income (loss) per share:
       Income (loss) before cumulative effect of
          accounting change                        $           0.30         (0.35)     184.7  %
       Cumulative effect of accounting change                  0.00         (2.11)     100.0  %
                                                       -------------   -----------   --------
       Net income (loss)                           $           0.30         (2.46)     112.1  %
                                                       =============   ===========   ========
  
  Net income per share, diluted, excluding                    $0.39         $0.43       (9.3) %
    restructuring and related charges, early
    extinguishment of debt and cumulative
    effect of accounting change (see proforma
    statement on page 7)
  Average shares outstanding-basic                           11,522        11,450        0.6  %
  Average shares outstanding-diluted                         11,764        11,450        2.7  %
  
   *   Percent of sales column for income taxes is calculated as a % of income (loss) before income
  taxes.
  </TABLE>
  
  <PAGE>
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                             CONSOLIDATED BALANCE SHEETS
                FEBRUARY 1, 2004, JANUARY 26, 2003 AND APRIL 27, 2003
                                      UNAUDITED
                               (Amounts in Thousands)
  <TABLE>
  <CAPTION>
  
                                           Amounts             Increase
                                    -----------------------   (Decrease)
                                    February 1, January 26, -------------------  *April 27,
                                       2004        2003     Dollars  Percent        2003
                                    ----------- ----------- -------- ---------- ---------
  <S>                             <C>              <C>     <C>       <C>         <C>
  Current assets
     Cash and cash equivalents    $      8,932      38,480  (29,548)  (76.8)%     14,355
     Short-term investments                  0           0        0     0.0 %     10,043
     Accounts receivable                28,282      32,427   (4,145)  (12.8)%     32,259
     Inventories                        52,000      53,560   (1,560)   (2.9)%     49,552
     Deferred income taxes              12,303       9,447    2,856    30.2 %     12,303
     Other current assets                2,610       5,892   (3,282)  (55.7)%      3,204
                                    ----------- ----------- -------- ---------- ---------
            Total current assets       104,127     139,806  (35,679)  (25.5)%    121,716
  
  
  Property, plant & equipment, net      78,909      85,396   (6,487)   (7.6)%     84,962
  Goodwill                               9,240       9,240        0     0.0 %      9,240
  Other assets                           1,577       2,311     (734)  (31.8)%      2,235
                                    ----------- ----------- -------- ---------- ---------
  
            Total assets          $    193,853     236,753  (42,900)  (18.1)%    218,153
                                    =========== =========== ======== ========== =========
  
  
  
  Current liabilities
     Current maturities of
     long-term debt               $        544      13,133  (12,589)  (95.9)%        500
     Accounts payable                   17,790      21,924   (4,134)  (18.9)%     19,874
     Accrued expenses                   12,901      14,646   (1,745)  (11.9)%     14,071
     Accrued restructuring               6,353       8,465   (2,112)  (24.9)%      7,743
     Income taxes payable                2,428           0    2,428   100.0 %        349
                                    ----------- ----------- -------- -------    ---------
            Total current liabilities   40,016      58,168  (18,152)  (31.2)%     42,537
  
  
  Long-term debt                        50,519      83,008  (32,489)  (39.1)%     76,000
  
  Deferred income taxes                  3,851       3,502      349    10.0 %      3,851
                                    ----------- ----------- -------- ---------- ---------
            Total liabilities           94,386     144,678  (50,292)  (34.8)%    122,388
  
  Shareholders' equity                  99,467      92,075    7,392     8.0 %     95,765
                                    ----------- ----------- -------- ---------- ---------
  
            Total liabilities and
            shareholders' equity  $    193,853     236,753  (42,900)   (18.1)%   218,153
                                    =========== =========== ======== ========== =========
  
  Shares outstanding                    11,529      11,487       42      0.4 %    11,515
                                    =========== =========== ======== ========== =========
  
  </TABLE>
  
   * Derived from audited financial statements
  
  <PAGE>
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE NINE MONTHS ENDED FEBRUARY 1, 2004 AND JANUARY 26, 2003
                                      Unaudited
                               (Amounts in Thousands)
  <TABLE>
  <CAPTION>
  
  
                                                                              NINE MONTHS ENDED
                                                                          --------------------------
                                                                                   Amounts
                                                                          --------------------------
                                                                          February 1,   January 26,
                                                                             2004          2003
                                                                          ------------  ------------
  <S>                                                                 <C>               <C>
  Cash flows from operating activities:
       Net income (loss)                                               $        3,487      (28,159)
       Adjustments to reconcile net income (loss) to net cash
          provided by operating activities:
             Cumulative effect of accounting change, net of income taxes            0       24,151
             Depreciation                                                      10,294       10,554
             Amortization of other assets                                         136          286
             Stock-based compensation                                             157          158
             Restructuring expense                                                  0       13,006
             Changes in assets and liabilities:
                Accounts receivable                                             3,977       10,939
                Inventories                                                    (2,448)       4,339
                Other current assets                                              594       (1,885)
                Other assets                                                      522          295
                Accounts payable                                                  544       (5,477)
                Accrued expenses                                               (1,170)      (1,551)
                Accrued restructuring                                          (1,390)      (2,792)
                Income taxes payable                                            2,079            0
                                                                          ------------  ------------
                   Net cash provided by operating activities                   16,782       23,864
                                                                          ------------  ------------
  
  Cash flows from investing activities:
       Capital expenditures                                                    (4,097)      (5,224)
       Proceeds from the sale of short-term investments                        10,043            0
                                                                          ------------  ------------
                   Net cash provided by (used) in investing activities          5,946       (5,224)
                                                                          ------------  ------------
  
  Cash flows from financing activities:
       Payments on vendor-financed capital expenditures                        (2,772)        (778)
       Principal payments of long-term debt                                   (25,437)     (12,343)
       Proceeds from common stock issued                                           58          968
                                                                          ------------  ------------
                   Net cash used in financing activities                      (28,151)     (12,153)
                                                                          ------------  ------------
  
  Increase (decrease) in cash and cash equivalents                             (5,423)       6,487
  
  Cash and cash equivalents at beginning of period                             14,355       31,993
                                                                          ------------  ------------
  
  Cash and cash equivalents at end of period                           $        8,932       38,480
                                                                          ============  ============
  
  Free Cash Flow   (1)                                                 $        9,913       17,862
                                                                          ============  ============
  
  
  --------------------------------------------------------------------------------------------------
  
  (1)  Free Cash Flow reconciliation is as follows:                          3rd QTR       3rd QTR
                                                                             FY 2004       FY 2003
                                                                       -----------------------------
  A)   Net cash provided by operating activities                               16,782       23,864
  B)   Minus:  Capital Expenditures                                            (4,097)      (5,224)
  C)   Minus:  Payments on vendor-financed capital expenditures                (2,772)        (778)
                                                                          ------------  ------------
                                                                                9,913       17,862
                                                                          ============  ============
  
  --------------------------------------------------------------------------------------------------
  </TABLE>
  
  <PAGE>
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL ANALYSIS
                                  FEBRUARY 1, 2004
  <TABLE>
  <CAPTION>
  
  
                                                   FISCAL 03                                 FISCAL 04
                                                 --------------      ---------------------------------------------------------
                                                     Q3                     Q1              Q2              Q3            Q4
                                                 --------------      ---------------------------------------------------------
  <S>                                             <C>                 <C>              <C>             <C>
  INVENTORIES
       Inventory turns                                  4.8                  5.0             5.1             4.7
  
  RECEIVABLES
       Days sales in receivables                         34                   32              34              31
  
  WORKING CAPITAL
       Current ratio                                    3.1                  3.1             2.9             2.6
       Operating working capital turnover (1)           4.9                  5.1             5.3             5.3
       Operating working capital (1)                $64,063              $54,854         $61,262         $62,492
  
  PROPERTY, PLANT & EQUIPMENT
       Depreciation rate                               6.2%                 6.2%            6.3%            6.2%
       Percent property, plant &
         equipment are depreciated                    61.0%                62.3%           62.9%           64.0%
       Capital expenditures                         $12,229  (2)          $1,781          $1,360          $1,101
  
  LEVERAGE
       Total liabilities/equity                      157.1%               124.7%          128.0%           94.9%
       Long-term debt/equity                         104.4%                80.3%           77.7%           51.3%
       Long-term debt/capital employed                51.1%                44.5%           43.7%           33.9%(3)
       Long-term debt                               $96,141              $76,551         $76,616         $51,063
  
  OTHER
       Book value per share                           $8.02                $8.28           $8.55           $8.63
       Employees at quarter end                       2,534                2,383           2,373           2,350
       Sales per employee (annualized)             $124,306             $121,628        $139,161        $129,682
       Capital employed                            $188,216             $171,891        $175,221        $150,530
  
    (1) Working capital for this calculation is accounts receivable, inventories and accounts payable
    (2) Expenditures for entire year
    (3) Capital employed represents long-term debt plus stockholders equity; Long-term debt is long-term
        debt plus current maturities of of long-term debt
  
  
  </TABLE>
  
  
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                      SALES / GROSS PROFIT BY SEGMENT/DIVISION
      FOR THE THREE AND NINE MONTHS ENDED FEBRUARY 1, 2004 AND JANUARY 26, 2003
  <TABLE>
  <CAPTION>
  
                               (Amounts in thousands)
  
                                                                            THREE MONTHS ENDED (UNAUDITED)
                                                           ------------------------------------------------------------------
                                                                 Amounts                          Percent of Total Sales
                                                           ---------------------              -------------------------------
                                                           February 1, January 26, % Over       February 1,      January 26,
  Segment/Division Sales (1)                                 2004        2003      (Under)         2004              2003
  ------------------------------------------------------   ----------  ---------  ----------  ---------------  --------------
  <S>                                                   <C>            <C>        <C>             <C>             <C>
  Upholstery Fabrics
      Culp Decorative Fabrics                           $     29,173     31,798     (8.3)%          38.1 %          40.0 %
      Culp Velvets/Prints                                     21,769     22,841     (4.7)%          28.4 %          28.7 %
      Culp Yarn                                                  505      1,356    (62.8)%           0.7 %           1.7 %
                                                           ----------  ---------  ----------  ---------------  --------------
                                                              51,447     55,995     (8.1)%          67.2 %          70.4 %
  Mattress Ticking
       Culp Home Fashions                                     25,114     23,497      6.9 %          32.8 %          29.6 %
                                                           ----------  ---------  ----------  ---------------  --------------
  
                                                        $     76,561     79,492     (3.7)%         100.0 %         100.0 %
                                                           ==========  =========  ==========  ===============  ==============
  
  
  
  Segment Gross Profit                                                                              Gross Profit Margin
  ------------------------------------------------------                                      -------------------------------
  
  Upholstery Fabrics                                    $      9,375      8,088     15.9 %          18.2 %          14.4 %
  Restructuring related charges                                    0        751   (100.0)%           0.0 %           1.3 %
                                                           ----------  ---------  ----------  ---------------  --------------
  Pro forma Upholstery Fabrics gross profit (2)                9,375      8,839      6.1 %          18.2 %          15.8 %
  
  Mattress Ticking                                             5,093      5,700    (10.6)%          20.3 %          24.3 %
                                                           ----------  ---------  ----------  ---------------  --------------
  
  Pro forma gross profit                                $     14,468     14,539     (0.5)%          18.9 %          18.3 %
                                                           ==========  =========  ==========  ===============  ==============
  
  
                                                                             NINE MONTHS ENDED (UNAUDITED)
                                                           ------------------------------------------------------------------
  
                                                                 Amounts                          Percent of Total Sales
                                                           ---------------------              -------------------------------
                                                           February 1, January 26, % Over       February 1,      January 26,
   Segment/Division Sales (1)                                 2004        2003      (Under)         2004             2003
  ------------------------------------------------------   ----------  ---------  ----------  ---------------  --------------
  Upholstery Fabrics
      Culp Decorative Fabrics                           $     88,002    100,473    (12.4)%          37.8 %          40.3 %
      Culp Velvets/Prints                                     62,093     69,277    (10.4)%          26.7 %          27.8 %
      Culp Yarn                                                3,751      4,702    (20.2)%           1.6 %           1.9 %
                                                           ----------  ---------  ----------  ---------------  --------------
                                                             153,846    174,452    (11.8)%          66.0 %          70.0 %
  Mattress Ticking
       Culp Home Fashions                                     79,122     74,788      5.8 %          34.0 %          30.0 %
                                                           ----------  ---------  ----------  ---------------  --------------
  
                                                        $    232,968    249,240     (6.5)%         100.0 %         100.0 %
                                                           ==========  =========  ==========  ===============  ==============
  
  
  
  Segment Gross Profit                                                                              Gross Profit Margin
  ------------------------------------------------------                                      -------------------------------
  
  Upholstery Fabrics                                    $     25,191     23,738      6.1 %          16.4 %          13.6 %
  Restructuring related charges                                    0      1,911   (100.0)%           0.0 %           1.1 %
                                                           ----------  ---------  ----------  ---------------  --------------
  Pro forma Upholstery Fabrics gross profit (2)               25,191     25,649     (1.8)%          16.4 %          14.7 %
  
  Mattress Ticking                                            17,494     17,647     (0.9)%          22.1 %          23.6 %
                                                           ----------  ---------  ----------  ---------------  --------------
  
  Pro forma gross profit                                $     42,685     43,296     (1.4)%          18.3 %          17.4 %
                                                           ==========  =========  ==========  ===============  ==============
  
  (1)  International Sales and portion of total sales is: Q3 - $8.5 million FY04 (11.1%) & $8.2 million
       FY03 (10.3%); YTD - $26.1 million FY04 (11.2%) & $29.8 million FY03 (12.0%)
  (2)  Pro forma includes $751,000 and $1.9 million of restructuring related charges from the shut down of the
       Chattanooga operation for the three and nine month period of fiscal 2003, respectively.
  </TABLE>
  
  <PAGE>
                                      CULP, INC.
                     PROFORMA CONSOLIDATED STATEMENTS OF INCOME
          FOR THE THREE MONTHS ENDED FEBRUARY 1, 2004 AND JANUARY 26, 2003
                  (Amounts in Thousands, Except for Per Share Data)
  <TABLE>
  <CAPTION>
                                                                 THREE MONTHS ENDED
                                          ------------------------------------------------------------
                                          As Reported                           February 1, 2004
                                          February 1,  % of              % of     Proforma Net    % of
                                              2004     Sales  Adjustments Sales  of Adjustments   Sales
                                          ------------------  -----------------    ---------------------
  <S>                                   <C>          <C>        <C>     <C>         <C>        <C>
  Net sales                             $    76,561  100.0%          0    0.0%         76,561    100.0%
  Cost of sales                              62,093   81.1%          0    0.0%         62,093     81.1%
                                          ------------------  -----------------    ---------------------
           Gross profit                      14,468   18.9%          0    0.0%         14,468     18.9%
  
  Selling, general and
    administrative expenses                  10,282   13.4%          0    0.0%         10,282     13.4%
  Restructuring expense                           0    0.0%          0    0.0%              0      0.0%
                                          ------------------  -----------------    ---------------------
           Income  from operations            4,186    5.5%          0    0.0%          4,186      5.5%
  
  Interest expense                            1,534    2.0%          0    0.0%          1,534      2.0%
  Interest income                              (113)  -0.1%          0    0.0%           (113)    -0.1%
  Early extinguishment of debt                1,672    2.7%     (1,672)   0.0% (2)          0      0.0%
  Other expense (income), net                   229    0.3%          0    0.0%            229      0.3%
                                          ------------------  -----------------    ---------------------
           Income before income taxes           864    1.1%      1,672    2.2%          2,536      3.3%
  
  Income taxes  (1)                             112   13.0%        552   33.0%            664     26.2%
                                          ------------------  -----------------    ---------------------
  Net income (loss)                     $       752    1.0%      1,120    1.5%          1,872      2.4%
                                          ==================  =================    =====================
  
  Net income (loss) per share-basic           $0.07              $0.10                  $0.16
  Net income (loss) per share-diluted         $0.06              $0.10                  $0.16
  Average shares outstanding-basic           11,529             11,529                 11,529
  Average shares outstanding-diluted         11,859             11,529                 11,859
  
  
                                     CULP, INC.
                     PROFORMA CONSOLIDATED STATEMENTS OF INCOME
          FOR THE THREE MONTHS ENDED FEBRUARY 1, 2004 AND JANUARY 26, 2003
                  (Amounts in Thousands, Except for Per Share Data)
  
                                 THREE MONTHS ENDED
  
                                          ------------------------------------------------------------------------------------
                                            As Reported                            January 26, 2003         Proforma
                                            January 26, % of               % of       Proforma Net   % of    % Over
                                               2003    Sales  Adjustments  Sales     of Adjustments  Sales   (Under)
                                             ----------------  -------------------    ---------------------  ---------
  Net sales                             $      79,492  100.0%         0     0.0%           79,492    100.0%      -3.7%
  Cost of sales                                65,704   82.7%      (751)   -0.9% (3)       64,953     81.7%      -4.4%
                                             ----------------  -------------------    ---------------------  ---------
           Gross profit                        13,788   17.3%      (751)   -0.9%           14,539     18.3%      -0.5%
  
  Selling, general and
    administrative expenses                     9,798   12.3%         0     0.0%            9,798     12.3%       4.9%
  Restructuring expense                         (354)   -0.4%       354     0.4% (4)            0      0.0%       0.0%
                                             ----------------  -------------------    ---------------------  ---------
           Income  from operations              4,344    5.5%      (397)   -0.5%            4,741      6.0%     -11.7%
  
  Interest expense                              1,665    2.1%         0     0.0%            1,665      2.1%      -7.9%
  Interest income                                (143)  -0.2%         0     0.0%             (143)    -0.2%     -21.0%
  Early extinguishment of debt                      0    0.0%         0     0.0%                0      0.0%       0.0%
  Other expense (income), net                     192    0.2%         0     0.0%              192      0.2%      19.3%
                                             ----------------  -------------------    ---------------------  ---------
           Income before income taxes           2,630    3.3%      (397)   -0.5%            3,027      3.8%     -16.2%
  
  Income taxes  (1)                               963   36.6%      (157)   39.5%            1,120     37.0%     -40.7%
                                             ----------------  -------------------    ---------------------  ---------
  Net income (loss)                     $       1,667    2.1%      (240)   -0.3%            1,907      2.4%      -1.8%
                                             ================  ===================    =====================  =========
  Net income (loss) per share-basic             $0.15            ($0.02)                    $0.17
  Net income (loss) per share-diluted           $0.14            ($0.02)                    $0.16
  Average shares outstanding-basic             11,485            11,485                    11,485
  Average shares outstanding-diluted           11,714            11,485                    11,714
  
  Notes:
   (1)  Percent of net sales column for income taxes is calculated as a % of income (loss) before income taxes
   (2)  Premium and fees paid to reduce private placement loan balance
   (3)  The $751,000 represents restructuring related charges for inventory markdowns and movement of equipment related to
        the Chattanooga plant closing
   (4)  The $354,000 restructuring credit represents the reversal of excess accrued employment benefit and plant security costs
        associated with the shutdown of the wet printed flock operation
   </TABLE>
  <PAGE>
                                     CULP, INC.
                  PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
           FOR THE NINE MONTHS ENDED FEBRUARY 1, 2004 AND JANUARY 26, 2003
                  (Amounts in Thousands, Except for Per Share Data)
  <TABLE>
  <CAPTION>
  
                                                                            NINE MONTHS ENDED
                                                      -------------------------------------------------------------------
                                                      As Reported                                February 1, 2004
                                                      February 1,  % of                  % of      Proforma Net     % of
                                                         2004      Sales    Adjustments  Sales     of Adjustments   Sales
                                                      --------------------  -------------------    -----------------------
  <S>                                               <C>            <C>         <C>      <C>           <C>        <C>
  Net sales                                         $     232,968  100.0%            0    0.0%          232,968    100.0%
  Cost of sales                                           190,283   81.7%            0    0.0%          190,283     81.7%
                                                      --------------------  -------------------    -----------------------
           Gross profit                                    42,685   18.3%            0    0.0%           42,685     18.3%
  
  Selling, general and
    administrative expenses                                31,089   13.3%            0    0.0%           31,089     13.3%
  Restructuring expense                                         0    0.0%            0    0.0%                0      0.0%
                                                      --------------------  -------------------    -----------------------
           Income  (loss) from operations                  11,596    5.0%            0    0.0%           11,596      5.0%
  
  Interest expense                                          4,540    1.9%            0    0.0%            4,540      1.9%
  Interest income                                            (356)  -0.2%            0    0.0%            (356)     -0.2%
  Early extinguishment of debt                              1,672    0.7%       (1,672)   0.0% (2)            0      0.0%
  Other expense (income), net                                 536    0.2%            0    0.0%              536      0.2%
                                                      --------------------  -------------------    -----------------------
           Income (loss) before income taxes                5,204    2.2%        1,672    0.7%            6,876      3.0%
  
  Income taxes  (1)                                         1,717   33.0%          552   33.0%            2,269     33.0%
                                                      --------------------  -------------------    -----------------------
  Income (loss) before cumulative effect of         $       3,487    1.5%        1,120    0.5%            4,607      2.0%
     accounting change
                                                      --------------------  ===================    =======================
  
  Cumulative effect of accounting change, net                   0                                         0
     of income taxes
                                                      ------------          -----------          -------------
  
           Net income (loss)                                3,487                1,120                  4,607
                                                      ============          ===========          =============
  
  Basic income (loss) per share:
           Income (loss) before cumulative effect
              of accounting change                  $        0.30                 0.10                   0.40
           Cumulative effect of accounting change            0.00                 0.00                   0.00
                                                      ------------         ------------          -------------
  
           Net income (loss)                                 0.30                 0.10                   0.40
                                                      ============         ============          =============
  
  Diluted income (loss) per share:
           Income (loss) before cumulative effect
              of accounting change                  $        0.30                 0.10                   0.39
           Cumulative effect of accounting change            0.00                 0.00                   0.00
                                                      ------------         ------------          -------------
  
           Net income (loss)                                 0.30                 0.10                   0.39
                                                      ============         ============          =============
  Average shares outstanding-basic                         11,522               11,522                 11,522
  Average shares outstanding-diluted                       11,764               11,522                 11,764
  
  <PAGE>
  
                                     CULP, INC.
                  PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
           FOR THE NINE MONTHS ENDED FEBRUARY 1, 2004 AND JANUARY 26, 2003
                  (Amounts in Thousands, Except for Per Share Data)
  
                                                                                NINE MONTHS ENDED
                                                    ------------------------------------------------------------------------------
                                                       As Reported                             January 26,  2003          Proforma
                                                       January 26,  % of                % of      Proforma Net    % of      % Over
                                                          2003     Sales   Adjustments Sales    of Adjustments   Sales    (Under)
                                                       -------------------  ------------------    ---------------------  ---------
  Net sales                                      $        249,240  100.0%           0                 249,240   100.0%      -6.5%
  Cost of sales                                           207,855   83.4%      (1,911)  -0.8% (3)     205,944    82.6%      -7.6%
                                                       -------------------  ------------------    ---------------------  ---------
           Gross profit                                    41,385   16.6%      (1,911)  -0.8%          43,296    17.4%      -1.4%
  
  Selling, general and
    administrative expenses                                29,716   11.9%           0    0.0%          29,716    11.9%       4.6%
  Restructuring expense                                    13,006    5.2%     (13,006)  -5.2% (4)           0     0.0%       0.0%
                                                       -------------------  ------------------    ---------------------  ---------
           Income  (loss) from operations                  (1,337)  -0.5%     (14,917)  -6.0%          13,580     5.4%     -14.6%
  
  Interest expense                                          5,244    2.1%           0    0.0%           5,244     2.1%     -13.4%
  Interest income                                            (414)  -0.2%           0    0.0%            (414)   -0.2%     -14.0%
  Early extinguishment of debt                                  0    0.0%           0    0.0%               0     0.0%       0.0%
  Other expense (income), net                                 645    0.3%           0    0.0%             645     0.3%     -16.9%
                                                       -------------------  ------------------    ---------------------  ---------
           Income (loss) before income taxes               (6,812)  -2.7%     (14,917)  -6.0%           8,105     3.3%     -15.2%
  
  Income taxes  (1)                                        (2,804)  41.2%      (5,803)  38.9%           2,999    37.0%     -24.3%
                                                       -------------------  ------------------    ---------------------  ---------
  Income (loss) before cumulative effect of                (4,008)  -1.6%      (9,114)  -3.7%           5,106     2.0%      -9.8%
     accounting change
                                                       -------------------  ------------------    ---------------------  ---------
  
  Cumulative effect of accounting change, net             (24,151)             24,151                       0
     of income taxes
                                                       ------------         -----------           -------------
  
           Net income (loss)                              (28,159)                                      5,106
                                                       ============                               =============
  
  Basic income (loss) per share:
           Income (loss) before cumulative effect
              of accounting change                 $        (0.35)             ($0.80)                   0.45
           Cumulative effect of accounting change           (2.11)               2.11                    0.00
                                                       ------------
                                                                                                  -------------
           Net income (loss)                                (2.46)                                      $0.45
                                                       ============                               =============
  
  Diluted income (loss) per share:
           Income (loss) before cumulative effect
              of accounting change                 $        (0.35)               0.80)                   0.43
           Cumulative effect of accounting change           (2.11)               2.11                    0.00
                                                       ------------
                                                                                                  -------------
           Net income (loss)                                (2.46)                                      $0.43
                                                       ============                               =============
  
  Average shares outstanding-basic                          11,450             11,450                  11,450
  Average shares outstanding-diluted                        11,450             11,450                  11,775
  
  
  Notes:
   (1)  Percent of net sales column for income taxes is calculated as a % of income (loss) before income taxes
   (2)  Premium and fees paid to reduce private placement loan balance
   (3)  The $1.9 million represents restructuring related charges for inventory markdowns and movement of equipment
        relating to the Chattanooga plant closing
   (4)  The $13.0 million represents restructuring charges for the shut down of the Chattanooga operation, $12.1 million, and the
        additional write-down of wet printed assets held for sale, $1.3 million
        offset by a restructuring credit of $354,000 for over accrued employee benefit and plant security costs
  </TABLE>
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
      for the three and nine months ended February 1, 2004 and January 26, 2003
  
  
  
  OVERVIEW
  
  Highlights for the third quarter ended February 1, 2004, include:
  
  o       Net income of $0.16 per diluted share, excluding a charge for early
          extinguishment of debt;
  
  o       Gross profit margin of 18.9%, driven by continued improvement in the
          upholstery fabrics segment;
  
  o       Prepayment of $25 million of the company's $75 million of outstanding
          senior notes;
  
  o       Debt to capital ratio reduced to 33.9%, the lowest level for Culp since
          fiscal 1993; and
  
  o       Earnings expectation for the fourth quarter of fiscal 2004 is $0.31 to
          $0.35 per diluted share.
  
  
       GENERAL -- For the third quarter of fiscal 2004,  net sales  decreased 3.7%
  to $76.6 million; and the company reported net income of $752,000,  or $0.06 per
  share  diluted,  compared  with net income of $1.7  million,  or $0.14 per share
  diluted,  in the third quarter of fiscal 2003.  Included in the current  quarter
  results was a $1.7 million charge,  or $0.10 per share diluted,  associated with
  the $25 million  prepayment of the company's $75 million of  outstanding  senior
  notes.  Excluding this charge for the early extinguishment of debt, net earnings
  for the third  quarter  of fiscal  2004  were  $1.9  million  or $0.16 per share
  diluted. Excluding restructuring and related charges, net earnings for the third
  quarter  of fiscal  2003  were $1.9  million  or $0.16  per share  diluted  (see
  reconciliation  on page 6). For the first nine months of fiscal 2004,  net sales
  decreased  6.5% to $233  million;  and the company  reported  net income of $3.5
  million, or $0.30 per share diluted, compared to a net loss of $28.2 million, or
  $2.46 per share  diluted,  for the same  period  last year.  Excluding  the $1.7
  million charge for the early extinguishment of debt, earnings for the first nine
  months of fiscal  2004 were $4.6  million or $0.39 per share  diluted,  compared
  with earnings for the same period last year of $5.1 million,  or $0.43 per share
  diluted,  excluding  restructuring and related charges and the cumulative effect
  of accounting change (see reconciliation on page 7). The year-to-date period for
  fiscal  2004  included  40 weeks  versus 39 weeks for the same  period of fiscal
  2003.
  
  
  INCOME STATEMENT COMMENTS
  
       UPHOLSTERY FABRICS SEGMENT (See page 5 - Sales and Gross Profit by Segment)
  
       Net Sales --  Upholstery  fabric sales for the third quarter of fiscal 2004
  decreased  8.1% to $51.4  million when  compared to the third  quarter of fiscal
  2003,  primarily  reflecting a decline in orders in the Culp Decorative  Fabrics
  (CDF) division  related to consumer  preference for leather and competition from
  imported  fabrics,  including  cut and sewn kits.  Although  the 8.1% decline is
  higher than the 4.3%  decline  experienced  during the  previous  quarter,  this
  quarterly sales decline is a substantial  improvement over the 22.5% decrease in
  the first quarter of fiscal 2004 and the 17.2% decrease in the fourth quarter of
  fiscal 2003.
  
  With the company's offshore sourcing efforts,  including the China platform, the
  company is increasing significantly sales of upholstery fabric products produced
  outside of the company's U.S.  manufacturing  plants. These sales, which include
  micro denier suedes, accounted for approximately 8.5% of upholstery fabric sales
  for the third quarter of fiscal 2004, almost double the percentage from the year
  earlier quarter
  
  Upholstery  fabric yards sold during the third quarter were 11.8 million  versus
  13.2 million in the third  quarter of fiscal  2003, a decline of 10.6%.  Average
  selling  price was $4.28 for the third  quarter  compared with $4.11 in the same
  quarter of last year,  an  increase of 4.1%,  due  primarily  to higher  average
  selling prices in the Culp Decorative Fabrics division.
  
       Gross Profit -- Gross profit for the third  quarter of fiscal 2004 was $9.4
  million,  or 18.2%,  versus $8.1 million, or 14.4%, for the same quarter of last
  year. Excluding  restructuring related charges of $751,000,  which were included
  in cost of sales in last year's third quarter,  gross profit dollars and margins
  were $8.8  million and 15.8%,  respectively.  The  increase in gross  profit and
  margins  primarily  reflects   significant  gains  in  manufacturing   operating
  efficiencies within the CDF division.
  
  
       China  Operations  -- The  start up of the  company's  China  operation  is
  generally  proceeding in accordance with previously  announced plans. During the
  third quarter, the company completed the installation of manufacturing equipment
  and began running some production trials. During the fourth quarter, the company
  expects to begin incoming fabric  inspection and testing,  and to start shipping
  fabric to customers.  Limited finishing operations are also anticipated to begin
  in the  fourth  quarter  of this  fiscal  year.  As  expected,  the  company  is
  experiencing  modest operating losses in its China operation during the start up
  phase,  which  is  expected  to be  completed  by the end of this  fiscal  year,
  although some level of operating  losses from the China operation is expected to
  continue until some time in fiscal 2005.
  
  
       MATTRESS TICKING SEGMENT (See page 5 - Sales and Gross Profit by Segment)
  
       Net Sales -- Mattress  ticking  sales for the third  quarter of fiscal 2004
  increased 6.9% to $25.1  million,  due to better  industry  demand and continued
  gains  with key  customers.  The 5.8%  fiscal  year to date  sales  gain in this
  segment is  especially  noteworthy  because  it  continues  to occur  during the
  bedding industry's  transition to selling  predominately  one-sided  mattresses,
  which utilize about one-third less mattress  ticking.  This transition at retail
  began in late  calendar  year 2002 and is  expected to  continue  through  early
  calendar year 2005.
  
  Mattress  ticking  yards sold during the third  quarter of fiscal 2004 were 10.0
  million  compared with 9.0 million yards in the third quarter of last year.  The
  average selling price was $2.50 for the third quarter,  compared to $2.59 in the
  same quarter last year.
  
       Gross Profit -- For the third quarter of fiscal 2004, the mattress  ticking
  segment  reported  gross  profit  dollars and margins of $5.1 million and 20.3%,
  respectively,  compared  with $5.7 million and 24.3% for the same period of last
  year.  The  reduction  in gross  profit  was due  principally  to lower  selling
  margins.
  
  
       SG&A  EXPENSES  -- SG&A  expenses of $10.3  million  for the third  quarter
  increased  approximately  $500,000,  or 4.9%,  from the prior year amount.  As a
  percent of net sales,  SG&A expenses  increased to 13.4% from 12.3% the previous
  year.  This increase over the prior year was due primarily to a $435,000  credit
  to bad debt  expense in the third  quarter of fiscal 2003  resulting  from a net
  reduction in the allowance for doubtful accounts,  due to a decrease in past due
  receivable balances.  The company did not have any bad debt expense or credit to
  bad debt expense in the third quarter of fiscal 2004.
  
       INTEREST  EXPENSE AND  INTEREST  INCOME --  Interest  expense for the third
  quarter  declined to $1.5 million  from $1.7  million the  previous  year due to
  lower  borrowings  outstanding.  Interest  income  decreased  to  $113,000  from
  $143,000 the previous year due to lower  interest rates earned in fiscal 2004 as
  compared to the previous year.
  
       EARLY EXTINGISHMENT OF DEBT - See LONG-TERM DEBT discussion below.
  
       INCOME TAXES -- The  effective  tax rate (taxes as a  percentage  of pretax
  income  (loss)) for the first nine months of fiscal 2004 was 33.0% compared with
  41.2% for the first nine  months of fiscal  2003.  The higher rate for the prior
  period reflects the increased tax benefits  related to the company's loss in the
  U.S.  resulting from the  restructuring  charges recorded in the second quarter.
  Excluding the  cumulative  effect of  accounting  change and  restructuring  and
  related charges, the effective tax rate for the first nine months of fiscal 2003
  was 37.0%.  The lower rate for fiscal 2004 also  reflects  the benefit  from the
  company's decrease in estimated accruals during the third quarter, which reduced
  the annual  effective rate from 37.0% to 33.0%,  and increased  earnings for the
  quarter and year-to-date by $208,000, or $0.02 per diluted share.
  
  
  BALANCE SHEET COMMENTS
  
       CASH, CASH EQUIVALENTS AND SHORT-TERM  INVESTMENTS - Cash, cash equivalents
  and short-term investments as of February 1, 2004 decreased to $8.9 million from
  $24.4  million  at the end of  fiscal  2003,  reflecting  free cash flow of $9.9
  million for the first nine months of fiscal 2004, and the $25 million prepayment
  of the company's $75 million outstanding senior notes (see additional discussion
  of free cash flow and debt below).
  
       WORKING  CAPITAL -- Accounts  receivable  as of February 1, 2004  decreased
  12.8% from the year-earlier level,  principally due to an increase in the number
  of customers  taking the cash  discount for shorter  payment  terms.  Days sales
  outstanding  totaled 31 days at  February  1, 2004,  compared to 34 days for the
  same period  last fiscal  year.  Inventories  at the close of the third  quarter
  decreased 2.9% from a year ago.  Inventory  turns for the third quarter were 4.7
  versus 4.8 for the year-earlier period.  Operating working capital (comprised of
  accounts  receivable,  inventories and trade accounts payable) was $62.5 million
  at February 1, 2004, down from $64.1 million a year ago.
  
       PROPERTY, PLANT AND EQUIPMENT -- Capital spending for the first nine months
  of fiscal 2004 was $4.2 million.  Depreciation is estimated at $14.0 million for
  the full fiscal year,  which is unchanged  from the  previous  year.  For fiscal
  2004, the company expects capital expenditures to be approximately $7.0 million,
  of  which   approximately  $3.5  million  is  related  to  the  company's  China
  operations.  The China investment includes manufacturing equipment and leasehold
  improvements.  For fiscal 2005, the company anticipates capital  expenditures to
  be approximately $8.0 million.
  
       INTANGIBLE  ASSETS -- As of February 1, 2004,  $9.2  million in goodwill is
  the company's only intangible asset.
  
       LONG-TERM  DEBT - During the third quarter of fiscal 2004, the company made
  a $25.0 million  prepayment on its $75.0 million of outstanding senior notes. As
  part of the  transaction,  the  company  negotiated  a five  percent,  or  $1.25
  million,  premium to be paid to the current note holders for the  prepayment  of
  this principal amount. This premium amount, along with other related transaction
  costs,  resulted in a charge of $1.7 million,  or $0.10 per share,  in the third
  quarter of fiscal 2004. As a result of this prepayment, the company will realize
  annualized  savings of  approximately  $1.7 million,  or $0.09 per share, in net
  interest  expense in each of the next two years, and a declining amount over the
  reminder of the notes' term until 2010.  In addition,  the  company's  long-term
  debt to capital ratio  improved to 33.9% compared with 51.1% for the same period
  last year.  During the past three and one half years the company  has  generated
  sufficient cash flow from operations to reduce  long-term debt by $86.0 million,
  or 62.0%.
  
       The company's remaining $51.1 million in long-term debt is unsecured and is
  comprised of $50 million in outstanding senior notes, with a fixed interest rate
  of 7.76%, and a $1.1 million,  non-interest  bearing term loan with the Canadian
  government.  Additionally, the company has a $15.0 million revolving credit line
  with a bank, of which no balance is  outstanding  at February 1, 2004.  The bank
  agreement  expires in August 2004. The first scheduled  principal payment on the
  $50  million  term loan is due March  2006 in the  amount of $7.5  million.  The
  Canadian  government  loan is  repaid in annual  installments  of  approximately
  $500,000 per year. The company was in compliance with all financial covenants in
  its loan agreements as of February 1, 2004.
  
  
  FREE CASH FLOW COMMENTS
  
       Free cash  flow (see  reconciliation  on page 3 of this  release)  was $9.9
  million for the first nine months of fiscal 2004,  compared  with $17.9  million
  for the same period last year.  This decrease is primarily due to less cash flow
  generated from working capital.  For fiscal 2004, the company believes free cash
  flow will be substantially  less than fiscal 2003 primarily  because the company
  does not expect the continued significant reduction in working capital reflected
  in each of the previous three years.  In addition,  the company will have higher
  payments on  vendor-financed  capital  expenditures ($3.7 million in fiscal 2004
  compared with $1.3 million in fiscal 2003).
  
  
  BUSINESS OUTLOOK
  
       While the home furnishings retail environment appears to be improving,  the
  company expects that fourth quarter  consolidated  sales will decrease  slightly
  from the same quarter of last year.  Mattress ticking segment sales are expected
  to continue to increase  in the fourth  quarter at a  significantly  higher rate
  than the 6.9% growth in the third quarter.  Upholstery  fabric segment sales are
  expected to decline from the same quarter of last year at about the same rate of
  8.1%  experienced  in the third  quarter,  due primarily to softness in incoming
  orders for CDF. With these sales  expectations and the current industry outlook,
  the  company  expects  to report  net  income in the range of $0.31 to $0.35 per
  diluted share, with actual results primarily  depending upon the level of demand
  throughout the quarter.
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text: --------------------------------------------------------------------------------
  
                                    UNITED STATES
                         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) February 24, 2004
  
                                     CULP, INC.
  
               (Exact name of registrant as specified in its charter)
  
    North Carolina                       0-12781                   56-1001967
  (State or other jurisdiction of   (Commission File No.)         (IRS Employer
         incorporation)                                        Identification No.)
  
                                101 South Main Street
                          High Point, North Carolina 27260
                      (Address of principal executive offices)
                                   (336) 889-5161
                (Registrant's telephone number, including area code)
  
            (Former name or former address, if changed since last report)
  
  --------------------------------------------------------------------------------
  INDEX
  
                                                                        Page
  Item 7 -  Exhibits                                                      3
  Item 12 - Results of Operations and Financial Condition                 3
  Signature                                                               4
  Exhibits
  Item 7 -- Exhibits
  
      99(a)  News Release dated February 24, 2004
  
      99(b)  Financial Information Release dated February 24, 2004
  
      Item 12 -- Results of Operations and Financial Condition
  
  On February 24, 2004,  Culp,  Inc. (the  "Registrant")  issued a news release to
  announce its financial  results for the quarter ended February 1, 2004. The news
  release is attached hereto as Exhibit 99(a).
  
  Also on February  24,  2004,  the  Registrant  released a Financial  Information
  Release containing  additional  financial  information and disclosures about the
  Registrant's  third  quarter  ended  February  1,  2004.  The news  release  and
  financial  information  release  contain  disclosures  about free cash  flow,  a
  non-GAAP   performance   measure,   that  management  believes  provides  useful
  information to investors  because it measures the company's  available cash flow
  for potential debt  repayment,  stock  repurchases  and additions to cash,  cash
  equivalents  and  short-term  investments.  In  addition,  the news  release and
  financial information release contain proforma income statements which reconcile
  the  reported   income   statements   with  proforma   results,   which  exclude
  restructuring   and  related  charges,   one-time   expenses  related  to  early
  extinguishment of debt, and cumulative effect of accounting  change. The company
  has included this proforma information in order to show operational  performance
  excluding  the effects of  restructuring  charges and expenses  related to early
  debt repayment that are not expected to occur on a regular basis.
  
  Forward  Looking  Information.  This  Report and the  exhibits  attached  hereto
  contain  statements that may be deemed  "forward-looking  statements" within the
  meaning  of the  federal  securities  laws,  including  the  Private  Securities
  Litigation  Reform Act of 1995  (Section 27A  of the  Securities Act of 1933 and
  Section 27A of the  Securities  and Exchange Act of 1934).  Such  statements are
  inherently  subject  to  risks  and  uncertainties.   Further,  forward  looking
  statements  are  intended  to speak  only as of the date on which they are made.
  Forward-looking statements are statements that include projections, expectations
  or beliefs  about future  events or results or otherwise  are not  statements of
  historical  fact.  Such  statements  are often but not always  characterized  by
  qualifying words such as "expect,"  "believe,"  "estimate," "plan" and "project"
  and their  derivatives,  and  include but are not  limited to  statements  about
  expectations for the company's future sales, gross profit margins, SG&A or other
  expenses,  and earnings,  as well as any statements regarding the company's view
  of estimates of the  company's  future  results by analysts.  Factors that could
  influence the matters discussed in such statements  include the level of housing
  starts and sales of existing homes,  consumer  confidence,  trends in disposable
  income, and general economic conditions.  Decreases in these economic indicators
  could have a negative effect on the company's business and prospects.  Likewise,
  increases in interest rates,  particularly home mortgage rates, and increases in
  consumer  debt or the  general  rate of  inflation,  could  affect  the  company
  adversely.  In  addition,  strengthening  of  the U.  S.  dollar  against  other
  currencies  could make the company's  products less  competitive on the basis of
  price in markets  outside  the  United  States.  Also,  economic  and  political
  instability  in  international  areas could affect the  company's  operations or
  sources of goods in those areas, as well as demand for the company's products in
  international  markets.  Finally,  unanticipated  delays  or costs in  executing
  restructuring actions could cause the cumulative effect of restructuring actions
  to fail to meet the objectives set forth by management. Other factors that could
  affect the matters  discussed in forward looking  statements are included in the
  company's periodic reports filed with the Securities and Exchange Commission.
  SIGNATURE
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
                                              CULP, INC.
                                              (Registrant)
  
                                      By:      Franklin N. Saxon
                                               ------------------
                                               Executive Vice President and
                                               Chief Financial Officer
  
  Dated:  February 24, 2004
  Exhibit 99(a)
                                    NEWS RELEASE
  
  Investor Contact: Kathy J. Hardy         Media Contact:   Kenneth M. Ludwig
                    Corporate Secretary                     Senior Vice President,
                    336-888-6209                            Human Resources
                                                            336-889-5161
  
                  CULP ANNOUNCES THIRD QUARTER FISCAL 2004 RESULTS
  
  HIGH POINT,  N.C.  (February 24, 2004) - Culp, Inc.  (NYSE:  CFI) today reported
  financial  and  operating  results for the third  quarter and nine months  ended
  February 1, 2004. The highlights for the quarter include:
  
  o       Net income of $0.16 per diluted share, excluding a charge for the early
          extinguishment of debt
  
  o       Gross profit margin of 18.9%, driven by continued improvement in the
          upholstery fabrics segment
  
  o       Prepayment of $25 million of the company's $75 million of outstanding
          senior notes
  
  o       Debt to capital ratio reduced to 33.9%, the lowest level for Culp since
          fiscal 1993
  
  o       Earnings expectation for the fourth quarter of fiscal 2004 is $0.31 to
          $0.35 per diluted share.
  
       For the three months ended  February 1, 2004, net sales were $76.6 million,
  compared  with $79.5  million a year ago.  The  company  reported  net income of
  $752,000,  or $0.06 per diluted share, for the third quarter of fiscal 2004. The
  results for the third fiscal quarter  include a one-time charge of $1.7 million,
  or $0.10 per diluted  share,  related to the  previously  announced  $25 million
  prepayment of the company's $75 million of outstanding  senior notes.  Excluding
  this  charge  for the early  extinguishment  of debt,  net  income for the third
  fiscal  quarter  was  $1.9 million,  or $0.16 per  diluted  share.  The  company
  reported  net income of $1.7  million,  or $0.14 per  diluted  share,  including
  restructuring  and related  charges for the third  quarter of fiscal  2003.  The
  financial  results  for the  third  quarter  of fiscal  2003  include a total of
  $397,000 in  restructuring  and related  charges.  Excluding these charges,  net
  income  for the third  fiscal  quarter  of 2003 was $1.9  million,  or $0.16 per
  diluted  share.  (A  reconciliation  to the net  income and  earnings  per share
  calculations has been set forth on Page 5.)
  
       For the nine months ended February 1, 2004, the company  reported net sales
  of  $233.0 million  compared with $249.2 million for the same period a year ago.
  Net income for the first nine months of fiscal 2004 was $3.5  million,  or $0.30
  per  diluted  share,  compared  with a net loss of $28.2  million,  or $2.46 per
  diluted share,  including  restructuring  charges and the  cumulative  effect of
  accounting  change,  for the first nine  months of fiscal  2003.  Excluding  the
  $1.7 million  charge for the early  extinguishment  of debt described above, net
  income for the first nine months of fiscal 2004 was $4.6  million,  or $0.39 per
  diluted share.  Excluding  restructuring  and related charges and the cumulative
  effect of accounting change, net income for the first nine months of fiscal 2003
  was $5.1 million, or $0.43 per diluted share. The year-to-date period for fiscal
  2004 included 40 weeks versus 39 weeks for the same period of fiscal 2003.
  "Our  results  for the  third  fiscal  quarter  of 2004  reflect  continued
  productivity improvement and solid profitability in spite of a modest decline in
  sales,"  remarked  Robert G. Culp,  III, chief  executive  officer of Culp, Inc.
  "Mattress ticking sales continued to gain momentum with a 6.9% increase over the
  prior year period,  and a 5.8% increase for the fiscal year to date. This growth
  trend is  particularly  meaningful  in light of the bedding  industry's  ongoing
  transition to selling predominantly  one-sided  mattresses,  which utilize about
  one-third  less  fabric.  Upholstery  fabric sales  declined  8.1% over the same
  period last year, primarily related to consumer preference for leather furniture
  and competition from imported fabrics and cut and sewn kits. However,  our gross
  profit  margin for the quarter was 18.9%,  the highest in sixteen  years for the
  company's third quarter. This improved profitability reflects gains in operating
  efficiencies within the upholstery fabrics segment.  Our ability to drive higher
  gross  profit  margins  in this  segment  confirms  the  value of our  strategic
  initiatives  over  the past  year to  streamline  our  operations  and  focus on
  improving the profitability of our sales mix.
  
       "Strengthening  our  balance  sheet  has been an  important  focus  for our
  company,"  added Culp.  "During the third fiscal  quarter,  we elected to make a
  $25.0 million prepayment on $75.0 million of outstanding senior notes. Including
  this  prepayment,  we have  generated  sufficient  free cash flow to reduce  our
  long-term debt by a total of $86.0 million over the past three and a half years.
  By taking this  opportunity to further reduce our debt on favorable  terms,  our
  long-term  debt  now  stands  at  $51.1  million.  As a  result,  our  long-term
  debt-to-capital  ratio  improved to 33.9% at the end of the third fiscal quarter
  of 2004,  compared with 51.1% a year ago. We will realize  annualized savings of
  approximately $1.7 million,  or $0.09 per share, in net interest expense in each
  of the next two years,  and a declining  amount over the remainder of the notes'
  term until 2010."
  
       Culp added,  "While the home furnishings retail  environment  appears to be
  improving,  we anticipate our  consolidated  sales for the fourth fiscal quarter
  will decrease  slightly over last year's level.  Mattress  ticking segment sales
  are expected to continue to increase over the prior year and we believe the gain
  will be  significantly  higher  than  the 6.9  percent  increase  this  quarter.
  Upholstery  fabrics segment sales are expected to decline at about the same rate
  we experienced this quarter.  Based on these sales  expectations and the current
  industry outlook,  we expect to report net income in the range of $0.31 to $0.35
  per share  diluted  for the  fourth  fiscal  quarter,  with the  actual  results
  depending  primarily  upon the level of demand  throughout  the quarter.  Culp's
  results to date  demonstrate  the strength of our  operations and our ability to
  execute our  strategy,  and we look forward to building on this momentum for the
  remainder of fiscal 2004."
  
       Culp,  Inc. is one of the world's largest  marketers of upholstery  fabrics
  for furniture  and is a leading  marketer of mattress  ticking for bedding.  The
  Company's  fabrics are used  principally in the  production of  residential  and
  commercial furniture and bedding products.
  
       This  release  contains  statements  that  may be  deemed  "forward-looking
  statements"  within the meaning of the federal  securities  laws,  including the
  Private Securities  Litigation Reform Act of 1995 (Section 27A of the Securities
  Act of 1933 and Section 27A of the  Securities  and Exchange Act of 1934).  Such
  statements  are  inherently  subject  to  risks  and   uncertainties.   Further,
  forward-looking  statements  are  intended to speak only as of the date on which
  they  are  made.   Forward-looking   statements  are  statements   that  include
  projections, expectations or beliefs about future events or results or otherwise
  are not statements of historical  fact. Such statements are often but not always
  characterized  by  qualifying  words such as  "expect,"  "believe,"  "estimate,"
  "plan" and "project" and their  derivatives,  and include but are not limited to
  statements  about  expectations  for the company's  future  sales,  gross profit
  margins,  SG&A or  other  expenses,  and  earnings,  as  well as any  statements
  regarding the company's  view of estimates of the  company's  future  results by
  analysts.  Factors that could influence the matters discussed in such statements
  include  the level of  housing  starts  and sales of  existing  homes,  consumer
  confidence,  trends in  disposable  income,  and  general  economic  conditions.
  Decreases  in these  economic  indicators  could have a  negative  effect on the
  company's  business  and  prospects.  Likewise,  increases  in  interest  rates,
  particularly  home mortgage rates, and increases in consumer debt or the general
  rate  of   inflation,   could  affect  the  company   adversely.   In  addition,
  strengthening  of the U. S.  dollar  against  other  currencies  could  make the
  company's products less competitive on the basis of price in markets outside the
  United States.  Also, economic and political  instability in international areas
  could affect the  company's  operations  or sources of goods in those areas,  as
  well as demand for the company's  products in  international  markets.  Finally,
  unanticipated delays or costs in executing restructuring actions could cause the
  cumulative  effect of  restructuring  actions to fail to meet the objectives set
  forth by  management.  Other factors that could affect the matters  discussed in
  forward-looking  statements are included in the company's periodic reports filed
  with the Securities and Exchange Commission.
  CULP, INC.
                           Condensed Financial Highlights
                                     (Unaudited)
  Three Months Ended
                                                                 -------------------------------
                                                                   February 1,     January 26,
                                                                      2004            2003
                                                                 -------------    --------------
  Net sales                                                      $  76,561,000    $  79,492,000
  Net income                                                     $     752,000    $   1,667,000
  Net income per share:
     Basic                                                       $        0.07    $        0.15
     Diluted                                                     $        0.06    $        0.14
  Net income per share, diluted, excluding restructuring
     and related charges and early extinguishment of debt*       $        0.16    $        0.16
  Average shares outstanding:
     Basic                                                          11,529,000       11,485,000
     Diluted                                                        11,859,000       11,714,000
  
                                                                        Nine Months Ended
                                                                 -------------------------------
                                                                   February 1,     January 26,
                                                                      2004            2003
                                                                 -------------    --------------
  Net sales                                                      $ 232,968,000    $ 249,240,000
                                                                 =============    ==============
  
  Income (loss) before cumulative effect of accounting change    $   3,487,000    $  (4,008,000)
  Cumulative effect of accounting change, net of income taxes              -0-      (24,151,000)
                                                                 -------------    --------------
  Net income (loss)                                              $   3,487,000    $ (28,159,000)
                                                                 =============    ==============
  Basic and diluted income (loss) per share:
    Income (loss) before cumulative effect of accounting change  $        0.30    $       (0.35)
    Cumulative effect of accounting change                                0.00            (2.11)
                                                                 -------------    --------------
  
  Net income (loss) per share                                    $        0.30    $       (2.46)
                                                                 =============    ==============
  Net income per share, diluted, excluding restructuring
    and related charges, early extinguishment of debt and
    cumulative effect of accounting change**                     $        0.39    $        0.43
  
  Average shares outstanding:
     Basic                                                          11,522,000       11,450,000
     Diluted                                                        11,764,000       11,450,000
  
  * Excludes charge for early extinguishment of debt of $1.7 million, or $0.10 per
    diluted share, for the third quarter of fiscal 2004. Excludes  restructuring
    and related charges of $397,000 ($240,000,  or $0.02 per diluted share, after
    taxes) for the third quarter of fiscal 2003.
  
  ** Excludes charge for early  extinguishment  of debt of $1.7 million,  or $0.10
     per diluted share, for the first nine months of fiscal 2004. Excludes
     cumulative effect of accounting  change,  net of income taxes,  of $24.2
     million ($2.11 per diluted share) for the first nine months of fiscal 2003.
     Excludes  restructuring and related charges of $14.9 million ($9.1 million,
     or $0.80 per share diluted, after taxes) for the first nine months of fiscal
     2003.
  CULP, INC.
  
       Reconciliation of Net Income (Loss) as Reported to Pro Forma Net Income
                                     (Unaudited)
  Three Months Ended                Nine Months Ended
                                 -----------------------------   -----------------------------
                                  February 1,      January 26,     February 1,     January 26,
                                     2004             2003            2004            2003
                                 -------------   -------------   -------------    ------------
  Net income (loss), as reported $     752,000   $   1,667,000   $   3,487,000    $(28,159,000)
  Cumulative effect of
    accounting change, net of
    income taxes                            --              --              --      24,151,000
  Restructuring and related
    charges, net of income taxes            --         240,000              --       9,114,000
  Early extinguishment of debt,
    net of income taxes              1,120,000              --       1,120,000              --
                                 -------------   -------------   -------------    ------------
  Pro forma net income (loss)    $   1,872,000   $   1,907,000   $   4,607,000    $  5,106,000
                                 =============   =============   =============    ============
  
              Reconciliation of Net Income (Loss) Per Share as Reported
                          to Pro Forma Net Income Per Share
                                     (Unaudited)
  
  Diluted net income (loss) per
    share                        $        0.06   $        0.14   $        0.30    $       (2.46)
  Cumulative effect of
    accounting change, net of
    income taxes                            --              --              --             2.11
  Restructuring and related
    charges, net of income taxes            --            0.02              --             0.80
  Early extinguishment of debt,
    net of income taxes                   0.10              --            0.10              --
  Effect of dilutive stock options          --              --           (0.01)           (0.02)
                                  ------------    ------------     ------------     ------------
  Diluted net income
    per share, adjusted          $        0.16   $        0.16    $       0.39     $       0.43
                                  ============    ============     ============     ============
  Reconciliation of Cash Flow from Operations to Free Cash Flow
                                     (Unaudited)
  Nine Months Ended
                                                                 -----------------------------
                                                                   February 1,     January 26,
                                                                      2004            2003
                                                                 -------------    ------------
  Cash flow from operations                                      $  16,782,000    $ 23,864,000
  Capital expenditures                                              (4,097,000)     (5,224,000)
  Change in accounts payable-capital expenditures                   (2,772,000)       (778,000)
                                                                 -------------    ------------
  Free cash flow                                                 $   9,913,000    $ 17,862,000
                                                                 =============    ============
  Exhibit 99(b)
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                      CONSOLIDATED STATEMENTS OF INCOME (LOSS)
  FOR THE THREE MONTHS AND NINE MONTHS ENDED FEBRUARY 1, 2004 AND JANUARY 26, 2003
                                     (UNAUDITED)
                  (Amounts in Thousands, Except for Per Share Data)
  THREE MONTHS ENDED
                                                       ----------------------------------------------------------------------------
                                                                 Amounts                                    Percent of Sales
                                                       ---------------------------                   ------------------------------
                                                       February 1,     January 26,      % Over       February 1,      January 26,
                                                           2004           2003         (Under)           2004            2003
                                                       -------------   -----------   ------------    --------------   -------------
  Net sales                                        $         76,561        79,492       (3.7) %           100.0 %         100.0 %
  Cost of sales                                              62,093        65,704       (5.5) %            81.1 %          82.7 %
                                                       -------------   -----------   -----------    --------------   -------------
       Gross profit                                          14,468        13,788        4.9  %            18.9 %          17.3 %
  
  Selling, general and
    administrative expenses                                  10,282         9,798        4.9  %            13.4 %          12.3 %
  Restructuring expense                                           0          (354)    (100.0) %             0.0 %          (0.4)%
                                                       -------------   -----------   -----------    --------------   -------------
       Income  from operations                                4,186         4,344        3.6  %             5.5 %           5.5 %
  
  Interest expense                                            1,534         1,665       (7.9) %             2.0 %           2.1 %
  Interest income                                              (113)         (143)     (21.0) %            (0.1)%          (0.2)%
  Early extinguishment of debt                                1,672             0      100.0  %             2.2 %           0.0 %
  Other expense (income), net                                   229           192       19.3  %             0.3 %           0.2 %
                                                       -------------   -----------   -----------    --------------   -------------
       Income before income taxes                               864         2,630      (67.1) %             1.1 %           3.3 %
  
  Income taxes*                                                 112           963      (88.4) %            13.0 %          36.6 %
                                                       -------------   -----------   -----------    --------------   -------------
  
       Net income                                  $            752         1,667       54.9  %             1.0 %           2.1 %
                                                       =============   ===========   ===========    ==============   =============
  
  Net income  per share-basic                                 $0.07         $0.15      (53.3) %
  Net income per share-diluted                                $0.06         $0.14      (57.1) %
  Net income per share, diluted, excluding                    $0.16         $0.16        0.0  %
    restructuring and related charges and early
    extinguishment of debt (see proforma statement
    on page 6)
  Average shares outstanding-basic                           11,529        11,485        0.4  %
  Average shares outstanding-diluted                         11,859        11,714        1.2  %
  
                                                                                      NINE MONTHS ENDED
                                                       ----------------------------------------------------------------------------
                                                                  Amounts                                      Percent of Sales
                                                       ---------------------------                   ------------------------------
                                                       February 1,     January 26,      % Over       February 1,       January 26,
                                                           2004           2003         (Under)           2004             2003
                                                       -------------   -----------   ------------    --------------   -------------
  
  Net sales                                        $        232,968       249,240       (6.5) %           100.0 %         100.0 %
  Cost of sales                                             190,283       207,855       (8.5) %            81.7 %          83.4 %
                                                       -------------   -----------   -----------    --------------   -------------
       Gross profit                                          42,685        41,385        3.1  %            18.3 %          16.6 %
  
  Selling, general and
    administrative expenses                                  31,089        29,716        4.6  %            13.3 %          11.9 %
  Restructuring expense                                           0        13,006     (100.0) %             0.0 %           5.2 %
                                                       -------------   -----------   -----------    --------------   -------------
       Income (loss) from operations                         11,596        (1,337)     967.3  %             5.0 %          (0.5)%
  
  Interest expense                                            4,540         5,244      (13.4) %             1.9 %           2.1 %
  Interest income                                              (356)         (414)     (14.0) %            (0.2)%          (0.2)%
  Early extinguishment of debt                                1,672             0      100.0  %             0.7 %           0.0 %
  Other expense (income), net                                   536           645      (16.9) %             0.2 %           0.3 %
                                                       -------------   -----------   -----------    --------------   -------------
       Income (loss) before income taxes                      5,204        (6,812)     176.4  %             2.2 %          (2.7)%
  
  Income taxes*                                               1,717        (2,804)     161.2  %            33.0 %          41.2 %
                                                       -------------   -----------   -----------    --------------   -------------
  Income (loss) before cumulative effect of                   3,487        (4,008)     187.0  %             1.5 %          (1.6)%
     accounting change                                                                               ===========      ==========
  
  Cumulative effect of accounting change, net of
     income taxes                                                 0       (24,151)
                                                       -------------   -----------
  
       Net income (loss)                           $          3,487       (28,159)
                                                       =============   ===========
  Basic income (loss) per share:
       Income (loss) before cumulative effect of
          accounting change                        $           0.30         (0.35)     186.5  %
       Cumulative effect of accounting change                  0.00         (2.11)     100.0  %
                                                       -------------   -----------   --------
       Net income (loss)                           $           0.30         (2.46)     112.3  %
                                                       =============   ===========   ========
  
  Diluted income (loss) per share:
       Income (loss) before cumulative effect of
          accounting change                        $           0.30         (0.35)     184.7  %
       Cumulative effect of accounting change                  0.00         (2.11)     100.0  %
                                                       -------------   -----------   --------
       Net income (loss)                           $           0.30         (2.46)     112.1  %
                                                       =============   ===========   ========
  
  Net income per share, diluted, excluding                    $0.39         $0.43       (9.3) %
    restructuring and related charges, early
    extinguishment of debt and cumulative
    effect of accounting change (see proforma
    statement on page 7)
  Average shares outstanding-basic                           11,522        11,450        0.6  %
  Average shares outstanding-diluted                         11,764        11,450        2.7  %
  
   *   Percent of sales column for income taxes is calculated as a % of income (loss) before income
  taxes.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                             CONSOLIDATED BALANCE SHEETS
                FEBRUARY 1, 2004, JANUARY 26, 2003 AND APRIL 27, 2003
                                      UNAUDITED
                               (Amounts in Thousands)
  Amounts             Increase
                                    -----------------------   (Decrease)
                                    February 1, January 26, -------------------  *April 27,
                                       2004        2003     Dollars  Percent        2003
                                    ----------- ----------- -------- ---------- ---------
  Current assets
     Cash and cash equivalents    $      8,932      38,480  (29,548)  (76.8)%     14,355
     Short-term investments                  0           0        0     0.0 %     10,043
     Accounts receivable                28,282      32,427   (4,145)  (12.8)%     32,259
     Inventories                        52,000      53,560   (1,560)   (2.9)%     49,552
     Deferred income taxes              12,303       9,447    2,856    30.2 %     12,303
     Other current assets                2,610       5,892   (3,282)  (55.7)%      3,204
                                    ----------- ----------- -------- ---------- ---------
            Total current assets       104,127     139,806  (35,679)  (25.5)%    121,716
  
  Property, plant & equipment, net      78,909      85,396   (6,487)   (7.6)%     84,962
  Goodwill                               9,240       9,240        0     0.0 %      9,240
  Other assets                           1,577       2,311     (734)  (31.8)%      2,235
                                    ----------- ----------- -------- ---------- ---------
  
            Total assets          $    193,853     236,753  (42,900)  (18.1)%    218,153
                                    =========== =========== ======== ========== =========
  
  Current liabilities
     Current maturities of
     long-term debt               $        544      13,133  (12,589)  (95.9)%        500
     Accounts payable                   17,790      21,924   (4,134)  (18.9)%     19,874
     Accrued expenses                   12,901      14,646   (1,745)  (11.9)%     14,071
     Accrued restructuring               6,353       8,465   (2,112)  (24.9)%      7,743
     Income taxes payable                2,428           0    2,428   100.0 %        349
                                    ----------- ----------- -------- -------    ---------
            Total current liabilities   40,016      58,168  (18,152)  (31.2)%     42,537
  
  Long-term debt                        50,519      83,008  (32,489)  (39.1)%     76,000
  
  Deferred income taxes                  3,851       3,502      349    10.0 %      3,851
                                    ----------- ----------- -------- ---------- ---------
            Total liabilities           94,386     144,678  (50,292)  (34.8)%    122,388
  
  Shareholders' equity                  99,467      92,075    7,392     8.0 %     95,765
                                    ----------- ----------- -------- ---------- ---------
  
            Total liabilities and
            shareholders' equity  $    193,853     236,753  (42,900)   (18.1)%   218,153
                                    =========== =========== ======== ========== =========
  
  Shares outstanding                    11,529      11,487       42      0.4 %    11,515
                                    =========== =========== ======== ========== =========
  * Derived from audited financial statements
  CULP, INC. FINANCIAL INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE NINE MONTHS ENDED FEBRUARY 1, 2004 AND JANUARY 26, 2003
                                      Unaudited
                               (Amounts in Thousands)
  NINE MONTHS ENDED
                                                                          --------------------------
                                                                                   Amounts
                                                                          --------------------------
                                                                          February 1,   January 26,
                                                                             2004          2003
                                                                          ------------  ------------
  Cash flows from operating activities:
       Net income (loss)                                               $        3,487      (28,159)
       Adjustments to reconcile net income (loss) to net cash
          provided by operating activities:
             Cumulative effect of accounting change, net of income taxes            0       24,151
             Depreciation                                                      10,294       10,554
             Amortization of other assets                                         136          286
             Stock-based compensation                                             157          158
             Restructuring expense                                                  0       13,006
             Changes in assets and liabilities:
                Accounts receivable                                             3,977       10,939
                Inventories                                                    (2,448)       4,339
                Other current assets                                              594       (1,885)
                Other assets                                                      522          295
                Accounts payable                                                  544       (5,477)
                Accrued expenses                                               (1,170)      (1,551)
                Accrued restructuring                                          (1,390)      (2,792)
                Income taxes payable                                            2,079            0
                                                                          ------------  ------------
                   Net cash provided by operating activities                   16,782       23,864
                                                                          ------------  ------------
  
  Cash flows from investing activities:
       Capital expenditures                                                    (4,097)      (5,224)
       Proceeds from the sale of short-term investments                        10,043            0
                                                                          ------------  ------------
                   Net cash provided by (used) in investing activities          5,946       (5,224)
                                                                          ------------  ------------
  
  Cash flows from financing activities:
       Payments on vendor-financed capital expenditures                        (2,772)        (778)
       Principal payments of long-term debt                                   (25,437)     (12,343)
       Proceeds from common stock issued                                           58          968
                                                                          ------------  ------------
                   Net cash used in financing activities                      (28,151)     (12,153)
                                                                          ------------  ------------
  
  Increase (decrease) in cash and cash equivalents                             (5,423)       6,487
  
  Cash and cash equivalents at beginning of period                             14,355       31,993
                                                                          ------------  ------------
  
  Cash and cash equivalents at end of period                           $        8,932       38,480
                                                                          ============  ============
  
  Free Cash Flow   (1)                                                 $        9,913       17,862
                                                                          ============  ============
  
  --------------------------------------------------------------------------------------------------
  
  (1)  Free Cash Flow reconciliation is as follows:                          3rd QTR       3rd QTR
                                                                             FY 2004       FY 2003
                                                                       -----------------------------
  A)   Net cash provided by operating activities                               16,782       23,864
  B)   Minus:  Capital Expenditures                                            (4,097)      (5,224)
  C)   Minus:  Payments on vendor-financed capital expenditures                (2,772)        (778)
                                                                          ------------  ------------
                                                                                9,913       17,862
                                                                          ============  ============
  
  --------------------------------------------------------------------------------------------------
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL ANALYSIS
                                  FEBRUARY 1, 2004
  FISCAL 03                                 FISCAL 04
                                                 --------------      ---------------------------------------------------------
                                                     Q3                     Q1              Q2              Q3            Q4
                                                 --------------      ---------------------------------------------------------
  INVENTORIES
       Inventory turns                                  4.8                  5.0             5.1             4.7
  
  RECEIVABLES
       Days sales in receivables                         34                   32              34              31
  
  WORKING CAPITAL
       Current ratio                                    3.1                  3.1             2.9             2.6
       Operating working capital turnover (1)           4.9                  5.1             5.3             5.3
       Operating working capital (1)                $64,063              $54,854         $61,262         $62,492
  
  PROPERTY, PLANT & EQUIPMENT
       Depreciation rate                               6.2%                 6.2%            6.3%            6.2%
       Percent property, plant &
         equipment are depreciated                    61.0%                62.3%           62.9%           64.0%
       Capital expenditures                         $12,229  (2)          $1,781          $1,360          $1,101
  
  LEVERAGE
       Total liabilities/equity                      157.1%               124.7%          128.0%           94.9%
       Long-term debt/equity                         104.4%                80.3%           77.7%           51.3%
       Long-term debt/capital employed                51.1%                44.5%           43.7%           33.9%(3)
       Long-term debt                               $96,141              $76,551         $76,616         $51,063
  
  OTHER
       Book value per share                           $8.02                $8.28           $8.55           $8.63
       Employees at quarter end                       2,534                2,383           2,373           2,350
       Sales per employee (annualized)             $124,306             $121,628        $139,161        $129,682
       Capital employed                            $188,216             $171,891        $175,221        $150,530
  
    (1) Working capital for this calculation is accounts receivable, inventories and accounts payable
    (2) Expenditures for entire year
    (3) Capital employed represents long-term debt plus stockholders equity; Long-term debt is long-term
        debt plus current maturities of of long-term debt
  CULP, INC. FINANCIAL INFORMATION RELEASE
                      SALES / GROSS PROFIT BY SEGMENT/DIVISION
      FOR THE THREE AND NINE MONTHS ENDED FEBRUARY 1, 2004 AND JANUARY 26, 2003
  (Amounts in thousands)
  
                                                                            THREE MONTHS ENDED (UNAUDITED)
                                                           ------------------------------------------------------------------
                                                                 Amounts                          Percent of Total Sales
                                                           ---------------------              -------------------------------
                                                           February 1, January 26, % Over       February 1,      January 26,
  Segment/Division Sales (1)                                 2004        2003      (Under)         2004              2003
  ------------------------------------------------------   ----------  ---------  ----------  ---------------  --------------
  Upholstery Fabrics
      Culp Decorative Fabrics                           $     29,173     31,798     (8.3)%          38.1 %          40.0 %
      Culp Velvets/Prints                                     21,769     22,841     (4.7)%          28.4 %          28.7 %
      Culp Yarn                                                  505      1,356    (62.8)%           0.7 %           1.7 %
                                                           ----------  ---------  ----------  ---------------  --------------
                                                              51,447     55,995     (8.1)%          67.2 %          70.4 %
  Mattress Ticking
       Culp Home Fashions                                     25,114     23,497      6.9 %          32.8 %          29.6 %
                                                           ----------  ---------  ----------  ---------------  --------------
  
                                                        $     76,561     79,492     (3.7)%         100.0 %         100.0 %
                                                           ==========  =========  ==========  ===============  ==============
  
  Segment Gross Profit                                                                              Gross Profit Margin
  ------------------------------------------------------                                      -------------------------------
  
  Upholstery Fabrics                                    $      9,375      8,088     15.9 %          18.2 %          14.4 %
  Restructuring related charges                                    0        751   (100.0)%           0.0 %           1.3 %
                                                           ----------  ---------  ----------  ---------------  --------------
  Pro forma Upholstery Fabrics gross profit (2)                9,375      8,839      6.1 %          18.2 %          15.8 %
  
  Mattress Ticking                                             5,093      5,700    (10.6)%          20.3 %          24.3 %
                                                           ----------  ---------  ----------  ---------------  --------------
  
  Pro forma gross profit                                $     14,468     14,539     (0.5)%          18.9 %          18.3 %
                                                           ==========  =========  ==========  ===============  ==============
  
                                                                             NINE MONTHS ENDED (UNAUDITED)
                                                           ------------------------------------------------------------------
  
                                                                 Amounts                          Percent of Total Sales
                                                           ---------------------              -------------------------------
                                                           February 1, January 26, % Over       February 1,      January 26,
   Segment/Division Sales (1)                                 2004        2003      (Under)         2004             2003
  ------------------------------------------------------   ----------  ---------  ----------  ---------------  --------------
  Upholstery Fabrics
      Culp Decorative Fabrics                           $     88,002    100,473    (12.4)%          37.8 %          40.3 %
      Culp Velvets/Prints                                     62,093     69,277    (10.4)%          26.7 %          27.8 %
      Culp Yarn                                                3,751      4,702    (20.2)%           1.6 %           1.9 %
                                                           ----------  ---------  ----------  ---------------  --------------
                                                             153,846    174,452    (11.8)%          66.0 %          70.0 %
  Mattress Ticking
       Culp Home Fashions                                     79,122     74,788      5.8 %          34.0 %          30.0 %
                                                           ----------  ---------  ----------  ---------------  --------------
  
                                                        $    232,968    249,240     (6.5)%         100.0 %         100.0 %
                                                           ==========  =========  ==========  ===============  ==============
  
  Segment Gross Profit                                                                              Gross Profit Margin
  ------------------------------------------------------                                      -------------------------------
  
  Upholstery Fabrics                                    $     25,191     23,738      6.1 %          16.4 %          13.6 %
  Restructuring related charges                                    0      1,911   (100.0)%           0.0 %           1.1 %
                                                           ----------  ---------  ----------  ---------------  --------------
  Pro forma Upholstery Fabrics gross profit (2)               25,191     25,649     (1.8)%          16.4 %          14.7 %
  
  Mattress Ticking                                            17,494     17,647     (0.9)%          22.1 %          23.6 %
                                                           ----------  ---------  ----------  ---------------  --------------
  
  Pro forma gross profit                                $     42,685     43,296     (1.4)%          18.3 %          17.4 %
                                                           ==========  =========  ==========  ===============  ==============
  
  (1)  International Sales and portion of total sales is: Q3 - $8.5 million FY04 (11.1%) & $8.2 million
       FY03 (10.3%); YTD - $26.1 million FY04 (11.2%) & $29.8 million FY03 (12.0%)
  (2)  Pro forma includes $751,000 and $1.9 million of restructuring related charges from the shut down of the
       Chattanooga operation for the three and nine month period of fiscal 2003, respectively.
  CULP, INC.
                     PROFORMA CONSOLIDATED STATEMENTS OF INCOME
          FOR THE THREE MONTHS ENDED FEBRUARY 1, 2004 AND JANUARY 26, 2003
                  (Amounts in Thousands, Except for Per Share Data)
  THREE MONTHS ENDED
                                          ------------------------------------------------------------
                                          As Reported                           February 1, 2004
                                          February 1,  % of              % of     Proforma Net    % of
                                              2004     Sales  Adjustments Sales  of Adjustments   Sales
                                          ------------------  -----------------    ---------------------
  Net sales                             $    76,561  100.0%          0    0.0%         76,561    100.0%
  Cost of sales                              62,093   81.1%          0    0.0%         62,093     81.1%
                                          ------------------  -----------------    ---------------------
           Gross profit                      14,468   18.9%          0    0.0%         14,468     18.9%
  
  Selling, general and
    administrative expenses                  10,282   13.4%          0    0.0%         10,282     13.4%
  Restructuring expense                           0    0.0%          0    0.0%              0      0.0%
                                          ------------------  -----------------    ---------------------
           Income  from operations            4,186    5.5%          0    0.0%          4,186      5.5%
  
  Interest expense                            1,534    2.0%          0    0.0%          1,534      2.0%
  Interest income                              (113)  -0.1%          0    0.0%           (113)    -0.1%
  Early extinguishment of debt                1,672    2.7%     (1,672)   0.0% (2)          0      0.0%
  Other expense (income), net                   229    0.3%          0    0.0%            229      0.3%
                                          ------------------  -----------------    ---------------------
           Income before income taxes           864    1.1%      1,672    2.2%          2,536      3.3%
  
  Income taxes  (1)                             112   13.0%        552   33.0%            664     26.2%
                                          ------------------  -----------------    ---------------------
  Net income (loss)                     $       752    1.0%      1,120    1.5%          1,872      2.4%
                                          ==================  =================    =====================
  
  Net income (loss) per share-basic           $0.07              $0.10                  $0.16
  Net income (loss) per share-diluted         $0.06              $0.10                  $0.16
  Average shares outstanding-basic           11,529             11,529                 11,529
  Average shares outstanding-diluted         11,859             11,529                 11,859
  
                                     CULP, INC.
                     PROFORMA CONSOLIDATED STATEMENTS OF INCOME
          FOR THE THREE MONTHS ENDED FEBRUARY 1, 2004 AND JANUARY 26, 2003
                  (Amounts in Thousands, Except for Per Share Data)
  
                                 THREE MONTHS ENDED
  
                                          ------------------------------------------------------------------------------------
                                            As Reported                            January 26, 2003         Proforma
                                            January 26, % of               % of       Proforma Net   % of    % Over
                                               2003    Sales  Adjustments  Sales     of Adjustments  Sales   (Under)
                                             ----------------  -------------------    ---------------------  ---------
  Net sales                             $      79,492  100.0%         0     0.0%           79,492    100.0%      -3.7%
  Cost of sales                                65,704   82.7%      (751)   -0.9% (3)       64,953     81.7%      -4.4%
                                             ----------------  -------------------    ---------------------  ---------
           Gross profit                        13,788   17.3%      (751)   -0.9%           14,539     18.3%      -0.5%
  
  Selling, general and
    administrative expenses                     9,798   12.3%         0     0.0%            9,798     12.3%       4.9%
  Restructuring expense                         (354)   -0.4%       354     0.4% (4)            0      0.0%       0.0%
                                             ----------------  -------------------    ---------------------  ---------
           Income  from operations              4,344    5.5%      (397)   -0.5%            4,741      6.0%     -11.7%
  
  Interest expense                              1,665    2.1%         0     0.0%            1,665      2.1%      -7.9%
  Interest income                                (143)  -0.2%         0     0.0%             (143)    -0.2%     -21.0%
  Early extinguishment of debt                      0    0.0%         0     0.0%                0      0.0%       0.0%
  Other expense (income), net                     192    0.2%         0     0.0%              192      0.2%      19.3%
                                             ----------------  -------------------    ---------------------  ---------
           Income before income taxes           2,630    3.3%      (397)   -0.5%            3,027      3.8%     -16.2%
  
  Income taxes  (1)                               963   36.6%      (157)   39.5%            1,120     37.0%     -40.7%
                                             ----------------  -------------------    ---------------------  ---------
  Net income (loss)                     $       1,667    2.1%      (240)   -0.3%            1,907      2.4%      -1.8%
                                             ================  ===================    =====================  =========
  Net income (loss) per share-basic             $0.15            ($0.02)                    $0.17
  Net income (loss) per share-diluted           $0.14            ($0.02)                    $0.16
  Average shares outstanding-basic             11,485            11,485                    11,485
  Average shares outstanding-diluted           11,714            11,485                    11,714
  
  Notes:
   (1)  Percent of net sales column for income taxes is calculated as a % of income (loss) before income taxes
   (2)  Premium and fees paid to reduce private placement loan balance
   (3)  The $751,000 represents restructuring related charges for inventory markdowns and movement of equipment related to
        the Chattanooga plant closing
   (4)  The $354,000 restructuring credit represents the reversal of excess accrued employment benefit and plant security costs
        associated with the shutdown of the wet printed flock operation
  CULP, INC.
                  PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
           FOR THE NINE MONTHS ENDED FEBRUARY 1, 2004 AND JANUARY 26, 2003
                  (Amounts in Thousands, Except for Per Share Data)
  NINE MONTHS ENDED
                                                      -------------------------------------------------------------------
                                                      As Reported                                February 1, 2004
                                                      February 1,  % of                  % of      Proforma Net     % of
                                                         2004      Sales    Adjustments  Sales     of Adjustments   Sales
                                                      --------------------  -------------------    -----------------------
  Net sales                                         $     232,968  100.0%            0    0.0%          232,968    100.0%
  Cost of sales                                           190,283   81.7%            0    0.0%          190,283     81.7%
                                                      --------------------  -------------------    -----------------------
           Gross profit                                    42,685   18.3%            0    0.0%           42,685     18.3%
  
  Selling, general and
    administrative expenses                                31,089   13.3%            0    0.0%           31,089     13.3%
  Restructuring expense                                         0    0.0%            0    0.0%                0      0.0%
                                                      --------------------  -------------------    -----------------------
           Income  (loss) from operations                  11,596    5.0%            0    0.0%           11,596      5.0%
  
  Interest expense                                          4,540    1.9%            0    0.0%            4,540      1.9%
  Interest income                                            (356)  -0.2%            0    0.0%            (356)     -0.2%
  Early extinguishment of debt                              1,672    0.7%       (1,672)   0.0% (2)            0      0.0%
  Other expense (income), net                                 536    0.2%            0    0.0%              536      0.2%
                                                      --------------------  -------------------    -----------------------
           Income (loss) before income taxes                5,204    2.2%        1,672    0.7%            6,876      3.0%
  
  Income taxes  (1)                                         1,717   33.0%          552   33.0%            2,269     33.0%
                                                      --------------------  -------------------    -----------------------
  Income (loss) before cumulative effect of         $       3,487    1.5%        1,120    0.5%            4,607      2.0%
     accounting change
                                                      --------------------  ===================    =======================
  
  Cumulative effect of accounting change, net                   0                                         0
     of income taxes
                                                      ------------          -----------          -------------
  
           Net income (loss)                                3,487                1,120                  4,607
                                                      ============          ===========          =============
  
  Basic income (loss) per share:
           Income (loss) before cumulative effect
              of accounting change                  $        0.30                 0.10                   0.40
           Cumulative effect of accounting change            0.00                 0.00                   0.00
                                                      ------------         ------------          -------------
  
           Net income (loss)                                 0.30                 0.10                   0.40
                                                      ============         ============          =============
  
  Diluted income (loss) per share:
           Income (loss) before cumulative effect
              of accounting change                  $        0.30                 0.10                   0.39
           Cumulative effect of accounting change            0.00                 0.00                   0.00
                                                      ------------         ------------          -------------
  
           Net income (loss)                                 0.30                 0.10                   0.39
                                                      ============         ============          =============
  Average shares outstanding-basic                         11,522               11,522                 11,522
  Average shares outstanding-diluted                       11,764               11,522                 11,764
  CULP, INC.
                  PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
           FOR THE NINE MONTHS ENDED FEBRUARY 1, 2004 AND JANUARY 26, 2003
                  (Amounts in Thousands, Except for Per Share Data)
  
                                                                                NINE MONTHS ENDED
                                                    ------------------------------------------------------------------------------
                                                       As Reported                             January 26,  2003          Proforma
                                                       January 26,  % of                % of      Proforma Net    % of      % Over
                                                          2003     Sales   Adjustments Sales    of Adjustments   Sales    (Under)
                                                       -------------------  ------------------    ---------------------  ---------
  Net sales                                      $        249,240  100.0%           0                 249,240   100.0%      -6.5%
  Cost of sales                                           207,855   83.4%      (1,911)  -0.8% (3)     205,944    82.6%      -7.6%
                                                       -------------------  ------------------    ---------------------  ---------
           Gross profit                                    41,385   16.6%      (1,911)  -0.8%          43,296    17.4%      -1.4%
  
  Selling, general and
    administrative expenses                                29,716   11.9%           0    0.0%          29,716    11.9%       4.6%
  Restructuring expense                                    13,006    5.2%     (13,006)  -5.2% (4)           0     0.0%       0.0%
                                                       -------------------  ------------------    ---------------------  ---------
           Income  (loss) from operations                  (1,337)  -0.5%     (14,917)  -6.0%          13,580     5.4%     -14.6%
  
  Interest expense                                          5,244    2.1%           0    0.0%           5,244     2.1%     -13.4%
  Interest income                                            (414)  -0.2%           0    0.0%            (414)   -0.2%     -14.0%
  Early extinguishment of debt                                  0    0.0%           0    0.0%               0     0.0%       0.0%
  Other expense (income), net                                 645    0.3%           0    0.0%             645     0.3%     -16.9%
                                                       -------------------  ------------------    ---------------------  ---------
           Income (loss) before income taxes               (6,812)  -2.7%     (14,917)  -6.0%           8,105     3.3%     -15.2%
  
  Income taxes  (1)                                        (2,804)  41.2%      (5,803)  38.9%           2,999    37.0%     -24.3%
                                                       -------------------  ------------------    ---------------------  ---------
  Income (loss) before cumulative effect of                (4,008)  -1.6%      (9,114)  -3.7%           5,106     2.0%      -9.8%
     accounting change
                                                       -------------------  ------------------    ---------------------  ---------
  
  Cumulative effect of accounting change, net             (24,151)             24,151                       0
     of income taxes
                                                       ------------         -----------           -------------
  
           Net income (loss)                              (28,159)                                      5,106
                                                       ============                               =============
  
  Basic income (loss) per share:
           Income (loss) before cumulative effect
              of accounting change                 $        (0.35)             ($0.80)                   0.45
           Cumulative effect of accounting change           (2.11)               2.11                    0.00
                                                       ------------
                                                                                                  -------------
           Net income (loss)                                (2.46)                                      $0.45
                                                       ============                               =============
  
  Diluted income (loss) per share:
           Income (loss) before cumulative effect
              of accounting change                 $        (0.35)               0.80)                   0.43
           Cumulative effect of accounting change           (2.11)               2.11                    0.00
                                                       ------------
                                                                                                  -------------
           Net income (loss)                                (2.46)                                      $0.43
                                                       ============                               =============
  
  Average shares outstanding-basic                          11,450             11,450                  11,450
  Average shares outstanding-diluted                        11,450             11,450                  11,775
  
  Notes:
   (1)  Percent of net sales column for income taxes is calculated as a % of income (loss) before income taxes
   (2)  Premium and fees paid to reduce private placement loan balance
   (3)  The $1.9 million represents restructuring related charges for inventory markdowns and movement of equipment
        relating to the Chattanooga plant closing
   (4)  The $13.0 million represents restructuring charges for the shut down of the Chattanooga operation, $12.1 million, and the
        additional write-down of wet printed assets held for sale, $1.3 million
        offset by a restructuring credit of $354,000 for over accrued employee benefit and plant security costs
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
      for the three and nine months ended February 1, 2004 and January 26, 2003
  
  OVERVIEW
  
  Highlights for the third quarter ended February 1, 2004, include:
  
  o       Net income of $0.16 per diluted share, excluding a charge for early
          extinguishment of debt;
  
  o       Gross profit margin of 18.9%, driven by continued improvement in the
          upholstery fabrics segment;
  
  o       Prepayment of $25 million of the company's $75 million of outstanding
          senior notes;
  
  o       Debt to capital ratio reduced to 33.9%, the lowest level for Culp since
          fiscal 1993; and
  
  o       Earnings expectation for the fourth quarter of fiscal 2004 is $0.31 to
          $0.35 per diluted share.
  
       GENERAL -- For the third quarter of fiscal 2004,  net sales  decreased 3.7%
  to $76.6 million; and the company reported net income of $752,000,  or $0.06 per
  share  diluted,  compared  with net income of $1.7  million,  or $0.14 per share
  diluted,  in the third quarter of fiscal 2003.  Included in the current  quarter
  results was a $1.7 million charge,  or $0.10 per share diluted,  associated with
  the $25 million  prepayment of the company's $75 million of  outstanding  senior
  notes.  Excluding this charge for the early extinguishment of debt, net earnings
  for the third  quarter  of fiscal  2004  were  $1.9  million  or $0.16 per share
  diluted. Excluding restructuring and related charges, net earnings for the third
  quarter  of fiscal  2003  were $1.9  million  or $0.16  per share  diluted  (see
  reconciliation  on page 6). For the first nine months of fiscal 2004,  net sales
  decreased  6.5% to $233  million;  and the company  reported  net income of $3.5
  million, or $0.30 per share diluted, compared to a net loss of $28.2 million, or
  $2.46 per share  diluted,  for the same  period  last year.  Excluding  the $1.7
  million charge for the early extinguishment of debt, earnings for the first nine
  months of fiscal  2004 were $4.6  million or $0.39 per share  diluted,  compared
  with earnings for the same period last year of $5.1 million,  or $0.43 per share
  diluted,  excluding  restructuring and related charges and the cumulative effect
  of accounting change (see reconciliation on page 7). The year-to-date period for
  fiscal  2004  included  40 weeks  versus 39 weeks for the same  period of fiscal
  2003.
  
  INCOME STATEMENT COMMENTS
  
       UPHOLSTERY FABRICS SEGMENT (See page 5 - Sales and Gross Profit by Segment)
  
       Net Sales --  Upholstery  fabric sales for the third quarter of fiscal 2004
  decreased  8.1% to $51.4  million when  compared to the third  quarter of fiscal
  2003,  primarily  reflecting a decline in orders in the Culp Decorative  Fabrics
  (CDF) division  related to consumer  preference for leather and competition from
  imported  fabrics,  including  cut and sewn kits.  Although  the 8.1% decline is
  higher than the 4.3%  decline  experienced  during the  previous  quarter,  this
  quarterly sales decline is a substantial  improvement over the 22.5% decrease in
  the first quarter of fiscal 2004 and the 17.2% decrease in the fourth quarter of
  fiscal 2003.
  
  With the company's offshore sourcing efforts,  including the China platform, the
  company is increasing significantly sales of upholstery fabric products produced
  outside of the company's U.S.  manufacturing  plants. These sales, which include
  micro denier suedes, accounted for approximately 8.5% of upholstery fabric sales
  for the third quarter of fiscal 2004, almost double the percentage from the year
  earlier quarter
  
  Upholstery  fabric yards sold during the third quarter were 11.8 million  versus
  13.2 million in the third  quarter of fiscal  2003, a decline of 10.6%.  Average
  selling  price was $4.28 for the third  quarter  compared with $4.11 in the same
  quarter of last year,  an  increase of 4.1%,  due  primarily  to higher  average
  selling prices in the Culp Decorative Fabrics division.
  
       Gross Profit -- Gross profit for the third  quarter of fiscal 2004 was $9.4
  million,  or 18.2%,  versus $8.1 million, or 14.4%, for the same quarter of last
  year. Excluding  restructuring related charges of $751,000,  which were included
  in cost of sales in last year's third quarter,  gross profit dollars and margins
  were $8.8  million and 15.8%,  respectively.  The  increase in gross  profit and
  margins  primarily  reflects   significant  gains  in  manufacturing   operating
  efficiencies within the CDF division.
  
       China  Operations  -- The  start up of the  company's  China  operation  is
  generally  proceeding in accordance with previously  announced plans. During the
  third quarter, the company completed the installation of manufacturing equipment
  and began running some production trials. During the fourth quarter, the company
  expects to begin incoming fabric  inspection and testing,  and to start shipping
  fabric to customers.  Limited finishing operations are also anticipated to begin
  in the  fourth  quarter  of this  fiscal  year.  As  expected,  the  company  is
  experiencing  modest operating losses in its China operation during the start up
  phase,  which  is  expected  to be  completed  by the end of this  fiscal  year,
  although some level of operating  losses from the China operation is expected to
  continue until some time in fiscal 2005.
  
       MATTRESS TICKING SEGMENT (See page 5 - Sales and Gross Profit by Segment)
  
       Net Sales -- Mattress  ticking  sales for the third  quarter of fiscal 2004
  increased 6.9% to $25.1  million,  due to better  industry  demand and continued
  gains  with key  customers.  The 5.8%  fiscal  year to date  sales  gain in this
  segment is  especially  noteworthy  because  it  continues  to occur  during the
  bedding industry's  transition to selling  predominately  one-sided  mattresses,
  which utilize about one-third less mattress  ticking.  This transition at retail
  began in late  calendar  year 2002 and is  expected to  continue  through  early
  calendar year 2005.
  
  Mattress  ticking  yards sold during the third  quarter of fiscal 2004 were 10.0
  million  compared with 9.0 million yards in the third quarter of last year.  The
  average selling price was $2.50 for the third quarter,  compared to $2.59 in the
  same quarter last year.
  
       Gross Profit -- For the third quarter of fiscal 2004, the mattress  ticking
  segment  reported  gross  profit  dollars and margins of $5.1 million and 20.3%,
  respectively,  compared  with $5.7 million and 24.3% for the same period of last
  year.  The  reduction  in gross  profit  was due  principally  to lower  selling
  margins.
  
       SG&A  EXPENSES  -- SG&A  expenses of $10.3  million  for the third  quarter
  increased  approximately  $500,000,  or 4.9%,  from the prior year amount.  As a
  percent of net sales,  SG&A expenses  increased to 13.4% from 12.3% the previous
  year.  This increase over the prior year was due primarily to a $435,000  credit
  to bad debt  expense in the third  quarter of fiscal 2003  resulting  from a net
  reduction in the allowance for doubtful accounts,  due to a decrease in past due
  receivable balances.  The company did not have any bad debt expense or credit to
  bad debt expense in the third quarter of fiscal 2004.
  
       INTEREST  EXPENSE AND  INTEREST  INCOME --  Interest  expense for the third
  quarter  declined to $1.5 million  from $1.7  million the  previous  year due to
  lower  borrowings  outstanding.  Interest  income  decreased  to  $113,000  from
  $143,000 the previous year due to lower  interest rates earned in fiscal 2004 as
  compared to the previous year.
  
       EARLY EXTINGISHMENT OF DEBT - See LONG-TERM DEBT discussion below.
  
       INCOME TAXES -- The  effective  tax rate (taxes as a  percentage  of pretax
  income  (loss)) for the first nine months of fiscal 2004 was 33.0% compared with
  41.2% for the first nine  months of fiscal  2003.  The higher rate for the prior
  period reflects the increased tax benefits  related to the company's loss in the
  U.S.  resulting from the  restructuring  charges recorded in the second quarter.
  Excluding the  cumulative  effect of  accounting  change and  restructuring  and
  related charges, the effective tax rate for the first nine months of fiscal 2003
  was 37.0%.  The lower rate for fiscal 2004 also  reflects  the benefit  from the
  company's decrease in estimated accruals during the third quarter, which reduced
  the annual  effective rate from 37.0% to 33.0%,  and increased  earnings for the
  quarter and year-to-date by $208,000, or $0.02 per diluted share.
  
  BALANCE SHEET COMMENTS
  
       CASH, CASH EQUIVALENTS AND SHORT-TERM  INVESTMENTS - Cash, cash equivalents
  and short-term investments as of February 1, 2004 decreased to $8.9 million from
  $24.4  million  at the end of  fiscal  2003,  reflecting  free cash flow of $9.9
  million for the first nine months of fiscal 2004, and the $25 million prepayment
  of the company's $75 million outstanding senior notes (see additional discussion
  of free cash flow and debt below).
  
       WORKING  CAPITAL -- Accounts  receivable  as of February 1, 2004  decreased
  12.8% from the year-earlier level,  principally due to an increase in the number
  of customers  taking the cash  discount for shorter  payment  terms.  Days sales
  outstanding  totaled 31 days at  February  1, 2004,  compared to 34 days for the
  same period  last fiscal  year.  Inventories  at the close of the third  quarter
  decreased 2.9% from a year ago.  Inventory  turns for the third quarter were 4.7
  versus 4.8 for the year-earlier period.  Operating working capital (comprised of
  accounts  receivable,  inventories and trade accounts payable) was $62.5 million
  at February 1, 2004, down from $64.1 million a year ago.
  
       PROPERTY, PLANT AND EQUIPMENT -- Capital spending for the first nine months
  of fiscal 2004 was $4.2 million.  Depreciation is estimated at $14.0 million for
  the full fiscal year,  which is unchanged  from the  previous  year.  For fiscal
  2004, the company expects capital expenditures to be approximately $7.0 million,
  of  which   approximately  $3.5  million  is  related  to  the  company's  China
  operations.  The China investment includes manufacturing equipment and leasehold
  improvements.  For fiscal 2005, the company anticipates capital  expenditures to
  be approximately $8.0 million.
  
       INTANGIBLE  ASSETS -- As of February 1, 2004,  $9.2  million in goodwill is
  the company's only intangible asset.
  
       LONG-TERM  DEBT - During the third quarter of fiscal 2004, the company made
  a $25.0 million  prepayment on its $75.0 million of outstanding senior notes. As
  part of the  transaction,  the  company  negotiated  a five  percent,  or  $1.25
  million,  premium to be paid to the current note holders for the  prepayment  of
  this principal amount. This premium amount, along with other related transaction
  costs,  resulted in a charge of $1.7 million,  or $0.10 per share,  in the third
  quarter of fiscal 2004. As a result of this prepayment, the company will realize
  annualized  savings of  approximately  $1.7 million,  or $0.09 per share, in net
  interest  expense in each of the next two years, and a declining amount over the
  reminder of the notes' term until 2010.  In addition,  the  company's  long-term
  debt to capital ratio  improved to 33.9% compared with 51.1% for the same period
  last year.  During the past three and one half years the company  has  generated
  sufficient cash flow from operations to reduce  long-term debt by $86.0 million,
  or 62.0%.
  
       The company's remaining $51.1 million in long-term debt is unsecured and is
  comprised of $50 million in outstanding senior notes, with a fixed interest rate
  of 7.76%, and a $1.1 million,  non-interest  bearing term loan with the Canadian
  government.  Additionally, the company has a $15.0 million revolving credit line
  with a bank, of which no balance is  outstanding  at February 1, 2004.  The bank
  agreement  expires in August 2004. The first scheduled  principal payment on the
  $50  million  term loan is due March  2006 in the  amount of $7.5  million.  The
  Canadian  government  loan is  repaid in annual  installments  of  approximately
  $500,000 per year. The company was in compliance with all financial covenants in
  its loan agreements as of February 1, 2004.
  
  FREE CASH FLOW COMMENTS
  
       Free cash  flow (see  reconciliation  on page 3 of this  release)  was $9.9
  million for the first nine months of fiscal 2004,  compared  with $17.9  million
  for the same period last year.  This decrease is primarily due to less cash flow
  generated from working capital.  For fiscal 2004, the company believes free cash
  flow will be substantially  less than fiscal 2003 primarily  because the company
  does not expect the continued significant reduction in working capital reflected
  in each of the previous three years.  In addition,  the company will have higher
  payments on  vendor-financed  capital  expenditures ($3.7 million in fiscal 2004
  compared with $1.3 million in fiscal 2003).
  
  BUSINESS OUTLOOK
  
       While the home furnishings retail environment appears to be improving,  the
  company expects that fourth quarter  consolidated  sales will decrease  slightly
  from the same quarter of last year.  Mattress ticking segment sales are expected
  to continue to increase  in the fourth  quarter at a  significantly  higher rate
  than the 6.9% growth in the third quarter.  Upholstery  fabric segment sales are
  expected to decline from the same quarter of last year at about the same rate of
  8.1%  experienced  in the third  quarter,  due primarily to softness in incoming
  orders for CDF. With these sales  expectations and the current industry outlook,
  the  company  expects  to report  net  income in the range of $0.31 to $0.35 per
  diluted share, with actual results primarily  depending upon the level of demand
  throughout the quarter.