content: --------------------------------------------------------------------------------
  
                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549
  
                                     ---------
  
                                     Form 8-K
  
                                  CURRENT REPORT
  
                 Pursuant to Section 13 or 15(d) of the Securities
                               Exchange Act of 1934
  
                                   -------------
  
         Date of Report (Date of earliest event reported) November 18, 1998
  
                                     CULP, INC.
  
              (Exact name of registrant as specified in its charter)
  
  
          North Carolina                  0-12781                56-1001967
  
   (State or other jurisdiction    (Commission File No.)       (IRS Employer
         of incorporation)                                  Identification No.)
  
  
  
                               101 South Main Street
                         High Point, North Carolina  27260
                     (Address of principal executive offices)
                                  (336) 889-5161
               (Registrant's telephone number, including area code)
  
  
  
  
                                                                                
           (Former name or former address, if changed since last report)
  
  
  
  
  
  --------------------------------------------------------------------------------
  
  
  
  
  <PAGE>
  
  Item 5. Other Events
  
  See  attached  Press  Release (2 pages) and  Financial  Information  Release (10
  pages),  both  dated  November  18,  1998,  related to the  fiscal  1999  second
  quarter  ended November 1, 1998.
  
  Forward  Looking  Information.  This Report  contains  statements  that could be
  deemed   "forward-looking   statements"   within  the  meaning  of  the  federal
  securities  laws,   which  statements  are  inherently   subject  to  risks  and
  uncertainties.   Forward-looking   statements   are   statements   that  include
  projections,   expectations  or  beliefs  about  future  events  or  results  or
  otherwise are not  statements  of historical  fact.  Such  statements  are often
  characterized  by  qualifying  words such as  "expect,"  "believe,"  "estimate,"
  "plan" and "project"  and their  derivatives.  Factors that could  influence the
  matters  discussed in such  statements  include the level of housing  starts and
  sales of existing homes,  consumer confidence,  trends in disposable income, and
  general  economic  conditions.  Decreases  in these  economic  indicators  could
  have a  negative  effect on the  Company's  business  and  prospects.  Likewise,
  increases in interest rates,  particularly  home mortgage  rates,  and increases
  in consumer  debt or the general  rate of  inflation,  could  affect the Company
  adversely.  In  addition,  the  value  of the U. S.  dollar  relative  to  other
  currencies  can  affect  the   ompetitiveness  of  the  Company's  products  in
  international    markets.    Economic   and   political   instability   in   the
  international area could also affect the demand for the Company's products.
   
  
  
                                     SIGNATURE
  
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
   
                                      CULP, INC.
                                      (Registrant)
  
  
                                By:    Phillip W. Wilson 
                                       Vice President and
                                       Chief Financial Officer
  
  
   
  Dated:   November 18, 1998
  <PAGE>
  
  
  
  CULP Reports Second Quarter Earnings
  Page 1
  Nov. 18, 1998
  
  
                                                   -MORE-
  
  
  
  
  
  FOR IMMEDIATE RELEASE
  
                        CULP REPORTS SECOND QUARTER EARNINGS
   
                RESULTS SIGNAL IMPROVEMENT COMPARED WITH FIRST PERIOD
  
  HIGH POINT, N.C. (Nov. 18, 1998) Culp, Inc. (NYSE: CFI) today reported net sales
  and net income for the second quarter of its 1999 fiscal year.
  
       For the three months ended  November 1, 1998,  Culp reported that net sales
  increased  4.3% to $128.2  million  compared with $122.9 million a year ago. Net
  income for the quarter was $1.3 million,  or $0.10 per share  diluted,  compared
  with $4.5 million, or $0.35 per share diluted, a year ago.
  
       Net sales for the first half of fiscal 1999 totaled $238.8 million, up 7.4%
  from $222.4 million in the first six months of fiscal 1998. The company reported
  a loss for the first half of $1.3 million, or $0.10 per share, compared with net
  income of $7.4 million, or $0.57 per share diluted, in the year-earlier period.
  
       "The net income for the second quarter represents a gratifying  improvement
  compared with our  corporate  performance  in the first  period," said Robert G.
  Culp, III, chief executive officer.  "We are encouraged by the progress realized
  to date through the actions taken to restore Culp's profitability. Our focus has
  included reducing costs and lowering manufacturing capacity,  especially related
  to our  international  business,  to match  the lower  level of demand  that has
  persisted  this year.  We did achieve  higher  sales for the second  quarter and
  first  half;  but  those  gains  were  due to the  contributions  from  acquired
  operations.
  
       "Our goal is to realize further  progress over the remainder of this fiscal
  year, but we do not expect the full impact of the changes we have made to become
  apparent until during fiscal 2000.  During the second  quarter,  we restructured
  the sales  organizations  for two of our four business  units,  Culp  Decorative
  Fabrics and Culp  Velvets/Prints.  This realignment in marketing personnel was a
  logical extension of the corporate  reorganization  that was implemented earlier
  this year to reflect the expanded size of our business  units and to support the
  company's  planned future  expansion.  The response within our  organization has
  been very supportive of these moves,  and that commitment  further  supports our
  fundamental confidence about Culp's prospects."
  <PAGE>
  
       Culp added,  "Some  forecasts  have emerged that suggest  concern  about an
  overall economic slowdown over the next several  quarters.  The latest trends in
  factors  such as consumer  confidence,  employment  levels and  mortgage  rates,
  however,  suggest a  favorable  outlook for  overall  consumer  spending on home
  furnishings.  We are very  pleased  with the  response to the new  patterns  and
  textures  that Culp  introduced  to retailers  at the recent  trade  conference.
  Enhancing  the value of our fabrics to  manufacturers  of furniture  and bedding
  remains our  mission,  and the  continued  integration  of our  expanded  design
  resources  with  the  company's  broad  manufacturing  capabilities  is a  vital
  component in our strategy."
   
       Culp, Inc. is the world's largest  manufacturer  and marketer of upholstery
  fabrics for furniture and is a leading producer of mattress ticking for bedding.
  The Company's  fabrics are used primarily in the  production of residential  and
  commercial furniture and bedding products.
  
                                     CULP, INC.
                           Condensed Financial Highlights
                                     (Unaudited)
  <TABLE>
  <CAPTION>
                                                                Three Months Ended    
                                                           November 1,           November 2,
                                                              1998                  1997
  <S>                                                   <C>                   <C>            
  Net sales                                             $    128,159,000      $   122,926,000
  Net income                                            $      1,307,000      $     4,505,000
  Net income per share:
     Basic                                              $           0.10      $          0.36
     Diluted                                            $           0.10      $          0.35
  Average shares outstanding:
     Basic                                                    12,995,000           12,668,000
     Diluted                                                  13,120,000           12,980,000
  
                                                                Six Months Ended             
                                                           November 1,           November 2,
                                                              1998                  1997
  Net sales                                             $    238,826,000      $   222,424,000
  Net income (loss)                                     $     (1,333,000)     $     7,355,000
  Net income (loss) per share:
     Basic                                              $          (0.10)     $          0.58
     Diluted                                            $          (0.10)     $          0.57
  Average shares outstanding:
     Basic                                                    12,998,000           12,649,000
     Diluted                                                  13,175,000           12,953,000
  
  </TABLE>
  
  
  This  release  contains   statements  that  could  be  deemed   "forward-looking
  statements,"  within the meaning of the federal securities laws. Such statements
  are inherently  subject to risks and uncertainties.  Forward-looking  statements
  are statements  that include  projections,  expectations or beliefs about future
  events or results or otherwise  are not  statements  of  historical  fact.  Such
  statements  are  often  characterized  by  qualifying  words  such as  "expect,"
  "believe," "estimate," "plan" and "project" and their derivatives.  Factors that
  could influence the matters  discussed in such  statements  include the level of
  housing  starts and sales of  existing  homes,  consumer  confidence,  trends in
  disposable income and general economic  conditions.  Decreases in these economic
  indicators could have a negative effect on the company's business and prospects.
  Likewise,  increases in interest rates,  particularly  home mortgage rates,  and
  increases in consumer  debt or the general rate of  inflation,  could affect the
  company adversely.  Because of the increasing  percentage of the company's sales
  derived by  international  shipments,  strengthening  of the U.S. dollar against
  other currencies could make the company's products less competitive on the basis
  of price in  markets  outside  the United  States.  Additionally,  economic  and
  political  instability  in  international  areas could affect the demand for the
  company's products.
   
                                        -END-
  
  
  
  
  <PAGE>
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                      CONSOLIDATED STATEMENTS OF INCOME (LOSS)
   FOR THE THREE MONTHS AND SIX MONTHS ENDED NOVEMBER 1, 1998 AND NOVEMBER 2, 1997
  
                  (Amounts in Thousands, Except for Per Share Data)
  <TABLE>
  <CAPTION>
  
                                                                        THREE MONTHS ENDED (UNAUDITED)
                                               ---------------------------------------------------------------------------------
  
                                                          Amounts                                          Percent of Sales
                                               -------------------------------                       -----------------------------
                                                November 1,     November 2,        % Over
                                                   1998             1997          (Under)               1999            1998
                                               --------------  ---------------  -------------        --------------  -------------
  
  <S>                                       <C>                       <C>           <C>                <C>             <C>    
  Net sales                                 $        128,159          122,926         4.3  %               100.0  %         100.0  %
  Cost of sales                                      107,685          100,191         7.5  %                84.0  %          81.5  %
                                               --------------  ---------------  -------------        --------------    -------------
           Gross profit                               20,474           22,735        (9.9) %                16.0  %          18.5  %
  
  Selling, general and
    administrative expenses                           15,474           13,632        13.5  %                12.1  %          11.1  %
                                               --------------  ---------------  -------------        --------------    -------------
           Income from operations                      5,000            9,103       (45.1) %                 3.9  %           7.4  %
  
  Interest expense                                     2,464            1,820        35.4  %                 1.9  %           1.5  %
  Interest income                                        (19)             (72)      (73.6) %                (0.0) %          (0.1) %
  Other expense (income), net                            604              425        42.1  %                 0.5  %           0.3  %
                                               --------------  ---------------  -------------        --------------    -------------
           Income before income taxes                  1,951            6,930       (71.8) %                 1.5  %           5.6  %
  
  Income taxes  *                                        644            2,425       (73.4) %                33.0  %          35.0  %
                                               --------------  ---------------  -------------        --------------    -------------
           Net income                       $          1,307            4,505       (71.0) %                 1.0  %           3.7  %
                                               ==============  ===============  =============        ==============    =============
  
  Net income per share                                 $0.10            $0.36       (72.2) %
  Net income per share, assuming dilution              $0.10            $0.35       (71.4) %
  Dividends per share                                 $0.035           $0.035         0.0  %
  Average shares outstanding                          12,995           12,668         2.6  %
  Average shares outstanding, assuming dilution       13,120           12,980         1.1  %
  
  
  
                                                                         SIX MONTHS ENDED (UNAUDITED)
                                               ---------------------------------------------------------------------------------
  
                                                          Amounts                                          Percent of Sales
                                               -------------------------------                       -----------------------------
                                                November 1,     November 2,        % Over
                                                   1998             1997          (Under)               1999            1998
                                               --------------  ---------------  -------------        --------------  ----------
  
  Net sales                                 $        238,826          222,424          7.4  %              100.0  %      100.0  %
  Cost of sales                                      204,741          182,956         11.9  %               85.7  %       82.3  %
                                               --------------  ---------------  -------------        --------------  ------------
           Gross profit                               34,085           39,468        (13.6) %               14.3  %       17.7  %
  
  Selling, general and
    administrative expenses                           29,947           24,548         22.0  %               12.5  %       11.0  %
                                               --------------  ---------------  -------------        --------------  ------------
           Income from operations                      4,138           14,920        (72.3) %                1.7  %        6.7  %
  
  Interest expense                                     4,825            3,100         55.6  %                2.0  %        1.4  %
  Interest income                                        (72)            (162)       (55.6) %               (0.0) %       (0.1) %
  Other expense (income), net                          1,374              667        106.0  %                0.6  %        0.3  %
                                               --------------  ---------------  -------------        --------------  ------------
           Income (loss) before income taxes          (1,989)          11,315       (117.6) %               (0.8) %        5.1  %
           
  Income taxes  *                                       (656)           3,960       (116.6) %               33.0  %       35.0  %
                                               --------------  ---------------  -------------        --------------  ------------
                                                              
           Net income (loss)                $         (1,333)           7,355       (118.1) %               (0.6) %        3.3  %
                                               ==============  ===============  =============        ==============  ============
  
  Net income (loss) per share                         ($0.10)            $0.58      (117.2) %
  Net income (loss) per share, assuming dilution      ($0.10)            $0.57      (117.5) %
  Dividends per share                                  $0.07             $0.07         0.0  %
  Average shares outstanding                          12,998            12,649         2.8  %
  Average shares outstanding, assuming dilution       13,175            12,953         1.7  %
  
  </TABLE>
  
  * Percent of sales column is  calculated  as a % of income  (loss) before income
  taxes.
  
  <PAGE>
  
  
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                             CONSOLIDATED BALANCE SHEETS
                 NOVEMBER 1, 1998, NOVEMBER 2, 1997 AND MAY 3, 1998
                                      Unaudited
                               (Amounts in Thousands)
  
  <TABLE>
  <CAPTION>
                                                                  Amounts                             
                                                   ---------------------------------    Increase (Decrease)               * May 3,
                                                       November 1,      November 2,   --------------------------------
                                                          1998             1997            Dollars         Percent           1998
                                                   ----------------  ---------------  ----------------    -------------  ------------
  
  Current assets
  <S>                                            <C>                   <C>               <C>          <C>               <C>  
         Cash and cash investments               $       1,177            1,209               (32)        (2.6) %           2,312
         Accounts receivable                            72,998           74,314            (1,316)        (1.8) %          73,773
         Inventories                                    72,392           70,192             2,200          3.1  %          78,594
         Other current assets                            7,230            6,136             1,094         17.8  %           7,808
                                                   ------------  ---------------  ----------------    -------------  ------------
                    Total current assets               153,797          151,851             1,946          1.3  %         162,487
                                                                                   
  Restricted investments                                 3,409            8,258            (4,849)       (58.7) %           4,021
  Property, plant & equipment, net                     126,050          107,377            18,673         17.4  %         128,805
  Goodwill                                              54,433           49,778             4,655          9.4  %          55,162
  Other assets                                           4,333            3,715               618         16.6  %           4,340
                                                   ------------  ---------------  ----------------    -------------  ------------
                                                                                                       
                    Total assets                 $     342,022          320,979            21,043          6.6  %         354,815
                                                   ============  ===============  ================    =============  ============
  
                                                                                                       
                                                                                                       
  Current liabilities
         Current maturities of long-term  debt   $       1,678              100             1,578      1,578.0  %           3,325
         Accounts payable                               32,640           36,709            (4,069)       (11.1) %          37,214
         Accrued expenses                               17,143           15,175             1,968         13.0  %          17,936
         Income taxes payable                                0            1,034            (1,034)      (100.0) %           1,282
                                                   ------------  ---------------  ----------------    -------------  ------------
                    Total current liabilities           51,461           53,018            (1,557)        (2.9) %          59,757
                    
                                                                                                       
  Long-term debt                                       150,210          139,991            10,219          7.3  %         152,312
                                                                                                       
  Deferred income taxes                                 11,227            9,965             1,262         12.7  %          11,227
                                                   ------------  ---------------  ----------------    -------------  ------------
                    Total liabilities                  212,898          202,974             9,924          4.9  %         223,296
                                                                                                       
  Shareholders' equity                                 129,124          118,005            11,119          9.4  %         131,519
                                                   ------------  ---------------  ----------------    -------------  ------------
                    Total liabilities and                                                              
                    shareholders' equity         $     342,022          320,979            21,043          6.6  %         354,815
                                                   ============  ===============  ================    =============  ============
                                                                                                      
  Shares outstanding                                    12,995           12,687               308          2.4  %          13,007
                                                   ============  ===============  ================    =============  ============
  
  </TABLE>
  
  * Derived from audited financial statements.
  
  <PAGE>
  
  
  
  
                                CULP, INC. FINANCIAL
                                 INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE SIX MONTHS ENDED NOVEMBER 1, 1998 AND NOVEMBER 2, 1997
                                      Unaudited
                               (Amounts in Thousands)
  
  <TABLE>
  <CAPTION>
  
                                                                                      SIX MONTHS ENDED
                                                                              ----------------------------------
  
                                                                                          Amounts
                                                                              --------------------------------
                                                                               November 1,      November 2,
                                                                                   1998             1997
                                                                              ---------------  ---------------
  
  Cash flows from operating activities:                                                         
  <S>                                                                     <C>                     <C>  
       Net income  (loss)                                                $           (1,333)           7,355
       Adjustments to reconcile net income (loss) to net
          cash provided by (used in) operating activities:
              Depreciation                                                            9,198            6,869
              Amortization of intangible assets                                         829              533
              Changes in assets and liabilities:
                  Accounts receivable                                                   775          (17,623)
                  Inventories                                                         6,202          (11,813)
                  Other current assets                                                  578             (686)
                  Other assets                                                          (93)            (188)
                  Accounts payable                                                   (2,395)          10,668
                  Accrued expenses                                                     (793)             295
                  Income taxes payable                                               (1,282)            (546)
                                                                              ---------------  ---------------
                      Net cash provided by (used in) operating activities            11,686           (5,136)
                                                                              ---------------  ---------------
  Cash flows from investing activities:                                                         
       Capital expenditures                                                          (6,443)         (19,216)
       Purchases of restricted investments                                              (66)          (8,662)
       Purchase of investments to fund deferred compensation liability                    0             (581)
       Sale of restricted investments                                                   678           11,422
       Business acquired                                                                  0          (36,628)
                                                                              ---------------  ---------------
                      Net cash used in investing activities                          (5,831)         (53,665)
                                                                              ---------------  ---------------
  Cash flows from financing activities:                                                         
       Proceeds from issuance of long-term debt                                       2,535           63,500
       Principal payments on long-term debt                                          (6,284)             (50)
       Change in accounts payable-capital expenditures                               (2,179)          (3,862)
       Dividends paid                                                                  (910)            (889)
       Common stock issued (purchased)                                                 (152)             481
                                                                              ---------------  ---------------
                      Net cash provided by (used in) financing activities            (6,990)          59,180
                                                                              ---------------  ---------------
                                                                                                
  Increase (decrease) in cash and cash investments                                   (1,135)             379
                                                                                                
  Cash and cash investments at beginning of period                                    2,312              830
                                                                              ---------------  ---------------
                                                                                                
  Cash and cash investments at end of period                             $            1,177            1,209
                                                                              ===============  ===============
   
   
  </TABLE>
   
  <PAGE>
  
   
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL ANALYSIS
                                  NOVEMBER 1, 1998
  <TABLE>
  <CAPTION>
  
                                             FISCAL 98                            FISCAL 99                                           
                                           -------------   ---------------------------------------------------------   ---------------
                                                Q2              Q1             Q2            Q3            Q4               LTM       
                                           -------------   ---------------------------------------------------------   ---------------
  
  INVENTORIES
  <S>                                         <C>              <C>            <C>                                                     
          Inventory turns                           6.1              4.9            5.7                                               
  
  RECEIVABLES
          Days sales in  receivables                 55               48             52                                               
          Percent current & less than 30
            days past due                         97.8%            93.8%          94.9%                                               
  WORKING CAPITAL
          Current ratio                             2.9              3.1            3.0                                               
          Working capital turnover (4)              4.8              4.5            4.4                                               
          Operating working capital (4)        $107,797         $111,481       $112,750                                               
  
  PROPERTY, PLANT & EQUIPMENT
          Depreciation rate                        7.4%             7.7%           8.4%                                               
          Percent property,
            plant & equipment are depreciated     45.3%            43.8%          45.0%                                               
          Capital expenditures                  $35,879 (1)       $2,858         $3,585                                               
  
  PROFITABILITY
          Return on average total capital         10.0%           (1.6%)           4.2%                                          4.8% 
          Return on average equity                15.6%           (8.1%)           4.1%                                          5.4% 
          Net income (loss) per share             $0.36          ($0.20)          $0.10                                         $0.53 
          Net income (loss) per share (diluted)   $0.35          ($0.20)          $0.10                                         $0.52
          
  
  LEVERAGE (3)
          Total liabilities/equity               172.0%           167.2%         164.9%                                               
          Funded debt/equity                     111.7%           119.7%         115.0%                                               
          Funded debt/capital employed            52.8%            54.5%          53.5%                                               
          Funded debt                          $131,833         $153,559       $148,479                                               
          Funded debt/EBITDA (LTM) (6)              3.1             3.75           3.95                                              
          EBITDA/Interest expense, net (LTM)        8.5              4.9            4.2
  
  OTHER
          Book value per share                    $9.30            $9.87          $9.94                                               
          Employees at quarter end                3,554            4,230          4,014                                               
          Sales per employee (annualized)      $146,000         $103,000       $124,000                                               
          Capital employed (3)                 $249,838         $281,831       $277,603                                               
          Effective income tax rate               35.0%            33.0%          33.0%                                               
          EBITDA (2)                            $12,643           $3,142         $9,649                                       $35,977 
          EBITDA/net sales                        10.3%             2.8%           7.5%                                          7.3% 
  </TABLE>
  
    (1) Expenditures for entire year
    (2) Earnings before interest, income taxes, and depreciation & amortization.
    (3) Long-term debt, funded debt and capital employed are all net of restricted
        investments.
    (4) Working capital for this calculation is accounts receivable, inventories 
        and accounts payable.
    (5) LTM represents "Latest Twelve Months"
    (6) EBITDA includes capitalized interest and pro forma amounts for Wetumpka 
        and Artee acquisitions.
  
  
  
  <PAGE>
  
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                       SALES BY PRODUCT CATEGORY/BUSINESS UNIT
   FOR THE THREE MONTHS AND SIX MONTHS ENDED NOVEMBER 1, 1998 AND NOVEMBER 2, 1997
                               (Amounts in thousands)
  <TABLE>
  <CAPTION>
                                               
                                                              THREE MONTHS ENDED (UNAUDITED)
                                         --------------------------------------------------------------------------
  
                                                  Amounts                                Percent of Total Sales
                                         --------------------------                    ----------------------------
                                         November 1,   November 2,        % Over
  Product Category/Business Unit            1998          1997           (Under)        1999            1998
  ------------------------------------   ------------  ------------   ---------------  -------------   ------------
  
  Upholstery Fabrics
  <S>                                   <C>              <C>           <C>             <C>             <C>   
      Culp Decorative Fabrics         $       59,573        56,781         4.9  %          46.5 %          46.2 %
      Culp Velvets/Prints                     38,728        43,928       (11.8) %          30.2 %          35.7 %
                                         ------------  ------------   ---------------  -------------   ------------
                                              98,301       100,709        (2.4) %          76.7 %          81.9 %
  
  Mattress Ticking
      Culp Home Fashions                      23,491        22,217         5.7  %          18.3 %          18.1 %
  
  Yarn
     Culp Yarn                                 6,367             0       100.0  %           5.0 %           0.0 %
                                         ------------  ------------   ---------------  -------------   ------------
  
                                    * $      128,159       122,926         4.3  %         100.0 %         100.0 %
                                         ============  ============   ===============  =============   ============
  
  
                                                               SIX MONTHS ENDED (UNAUDITED)
                                         --------------------------------------------------------------------------
  
                                                  Amounts                                Percent of Total Sales
                                         --------------------------                    ----------------------------
                                         November 1,   November 2,        % Over
  Product Category/Business Unit            1998          1997           (Under)        1999            1998
  ------------------------------------   ------------  ------------   ---------------  -------------   ------------
  
  Upholstery Fabrics
      Culp Decorative Fabrics         $      111,018        96,595        14.9  %          46.5 %          43.4 %
      Culp Velvets/Prints                     68,722        82,325       (16.5) %          28.8 %          37.0 %
                                         ------------  ------------   ---------------  -------------   ------------
                                             179,740       178,920         0.5  %          75.3 %          80.4 %
  
  Mattress Ticking
      Culp Home Fashions                      46,123        43,504         6.0  %          19.3 %          19.6 %
  
  Yarn
     Culp Yarn                                12,963             0       100.0  %           5.4 %           0.0 %
                                         ------------  ------------   ---------------  -------------   ------------
  
                                    * $      238,826       222,424         7.4  %         100.0 %         100.0 %
                                         ============  ============   ===============  =============   ============
  </TABLE>
  
  
  * U.S.  sales were $94,472 and $87,622 for the second quarter of fiscal 1999 and
  fiscal  1998,  respectively;  and  $178,782  and  $162,029 for the six months of
  fiscal 1999 and fiscal 1998, respectively. The percentage increase in U.S. sales
  was 7.8% for the second quarter and an increase of 10.3% for the six months.
  
                                                      
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                       INTERNATIONAL SALES BY GEOGRAPHIC AREA
   FOR THE THREE MONTHS AND SIX MONTHS ENDED NOVEMBER 1, 1998 AND NOVEMBER 2, 1997
                               (Amounts in thousands)
  <TABLE>
  <CAPTION>
  
  
                                                                 THREE MONTHS ENDED (UNAUDITED)
                                         --------------------------------------------------------------------------------
  
                                                    Amounts                                   Percent of Total Sales
                                         -------------------------------                   ------------------------------
                                          November 1,      November 2,       % Over
           Geographic Area                    1998            1997           (Under)         1999             1998
  ----------------------------------     ---------------  --------------  --------------   -------------     ------------
  <S>                                  <C>                  <C>             <C>              <C>              <C>   
  North America (Excluding USA)     $             8,502           8,162        4.2  %           25.2 %           23.1 %
  Europe                                          7,223           6,624        9.0  %           21.4 %           18.8 %
  Middle East                                    10,060           7,439       35.2  %           29.9 %           21.1 %
  Far East & Asia                                 5,435           9,720      (44.1) %           16.1 %           27.5 %
  South America                                   1,238           1,216        1.8  %            3.7 %            3.4 %
  All other areas                                 1,229           2,143      (42.7) %            3.6 %            6.1 %
                                         ---------------  --------------  --------------   -------------     ------------
  
                                    $            33,687          35,304       (4.6) %          100.0 %          100.0 %
                                         ===============  ==============  ==============   =============     ============
  
  
                                                                  SIX MONTHS ENDED (UNAUDITED)
                                         --------------------------------------------------------------------------------
  
                                                    Amounts                                   Percent of Total Sales
                                         -------------------------------                   ------------------------------
                                          November 1,      November 2,       % Over
           Geographic Area                    1998            1997           (Under)         1999             1998
  ----------------------------------     ---------------  --------------  --------------   -------------     ------------
  North America (Excluding USA)     $            15,755          15,206        3.6  %           26.2 %           25.2 %
  Europe                                         10,906          11,125       (2.0) %           18.2 %           18.4 %
  Middle East                                    18,360          14,003       31.1  %           30.6 %           23.2 %
  Far East & Asia                                10,303          15,662      (34.2) %           17.2 %           25.9 %
  South America                                   2,238           1,462       53.1  %            3.7 %            2.4 %
  All other areas                                 2,482           2,937      (15.5) %            4.1 %            4.9 %
                                         ---------------  --------------  --------------   -------------     ------------
  
                                    $            60,044          60,395       (0.6) %          100.0 %          100.0 %
                                         ===============  ==============  ==============   =============     ============
  
  </TABLE>
  
  International  sales,  and the  percentage of total sales,  for each of the last
  seven fiscal years  follows:  fiscal 1992-$  37,913 (20%);  fiscal 1993-$ 41,471
  (21%);  fiscal 1994-$ 44,038  (18%);  fiscal 1995-$ 57,971 (19%);  fiscal 1996-$
  77,397 (22%);  fiscal 1997-$  101,571  (25%);  and fiscal 1998-$ 137,223 (29%) .
  International  sales for the second quarter represented 26.3% and 28.7% for 1999
  and 1998, respectively.  Year-to-date  international sales represented 25.1% and
  27.2% of total sales for 1999 and 1998, respectively.
  
  
  <PAGE>
   
  
                                     Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1997 vs 1998 vs 1999
                                      Unaudited
                               (Amounts in thousands)
  <TABLE>
  <CAPTION>
  
                                                      Fiscal 1997                                             Fiscal 1998             
                               ---------------------------------------------------  --------------------------------------------------
    Product Category/Business    Q1         Q2         Q3        Q4       TOTAL       Q1        Q2         Q3        Q4       TOTAL   
              Units
  -----------------------------
  
  Upholstery Fabrics
  <S>                           <C>        <C>        <C>       <C>       <C>        <C>       <C>        <C>       <C>       <C>     
      Culp Decorative Fabrics    38,966     45,723     39,342    43,699    167,730    39,814    56,781     53,415    60,155    210,165
      Culp Velvets/Prints        34,867     40,233     40,387    40,980    156,467    38,397    43,928     44,020    45,044    171,389
                               ---------------------------------------------------  --------------------------------------------------
                                 73,833     85,956     79,729    84,679    324,197    78,211   100,709     97,435   105,199    381,554
  
  Mattress Ticking
      Culp Home Fashions         16,696     19,248     17,739    20,999     74,682    21,287    22,217     20,261    23,520     87,285
  
  Yarn
      Culp Yarn                       -          -          -         -          -         -         -        761     7,115      7,876
                               ---------------------------------------------------  --------------------------------------------------
  
                                 90,529    105,204     97,468   105,678    398,879    99,498   122,926    118,457   135,834    476,715
                               ===================================================  ==================================================
  
  
                     Percent increase(decrease) from prior year:
  Product Category/Business Units
  --------------------------------------------------------------------------------  --------------------------------------------------
  
  Upholstery Fabrics           
      Culp Decorative Fabrics      18.3       12.4        0.2     (4.4)        5.8       2.2      24.2       35.8      37.7       25.3
      Culp Velvets/Prints          48.2       25.4       26.9       7.1       24.5      10.1       9.2        9.0       9.9        9.5
                               ---------------------------------------------------  --------------------------------------------------
                                   30.8       18.1       12.2       0.8       14.0       5.9      17.2       22.2      24.2       17.7
  
  Mattress Ticking
      Culp Home Fashions            5.1        7.4       15.3      15.5       10.8      27.5      15.4       14.2      12.0       16.9
  
  Yarn
      Culp Yarn                       -          -          -         -          -         -         -      100.0     100.0      100.0
                               ---------------------------------------------------  --------------------------------------------------
  
                                   25.1       16.0       12.7       3.4       13.4       9.9      16.8       21.5      28.5       19.5
                               ===================================================  ==================================================
  
      Overall Growth Rate
  
  Internal (without acquisitions)  25.1       16.0       12.7       3.4       13.4       9.9       6.6        9.2      11.6        9.3
  External                            -          -          -         -          -         -      10.2       12.3      16.9       10.2
                               ---------------------------------------------------  --------------------------------------------------
                                                                                                                                      
                                   25.1       16.0       12.7       3.4       13.4       9.9      16.8       21.5      28.5       19.5
                               ===================================================  ==================================================
  
  </TABLE>
  
  <PAGE>
                                  Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1997 vs 1998 vs 1999
                                      Unaudited
                               (Amounts in thousands)
  <TABLE>
  <CAPTION>
  
                                                          Fiscal 1999                       
    Product Category/Business        -------------------------------------------------------
              Units                      Q1          Q2          Q3         Q4      TOTAL   
  -------------------------------                                                           
                                                                                            
  Upholstery Fabrics                                                                        
  <S>                                  <C>          <C>                           <C>                                                 
      Culp Decorative Fabrics             51,445       59,573                        111,018                                          
      Culp Velvets/Prints                 29,994       38,728                         68,722 
                                      -------------------------------------------------------
                                          81,439       98,301                        179,740 
                                                                                             
  Mattress Ticking                                                                           
      Culp Home Fashions                  22,632       23,491                         46,123 
                                                                                             
  Yarn                                                                                       
      Culp Yarn                            6,596        6,367                         12,963 
                                      -------------------------------------------------------
                                                                                             
                                         110,667      128,159                        238,826 
                                      =======================================================
                                                                                             
                                                                                             
                     Percent increase(decrease) from prior year:
  Product Category/Business Units
                                                                                             
                                           
                                                                                             
  Upholstery Fabrics                                                                         
      Culp Decorative Fabrics               29.2          4.9                           14.9 
      Culp Velvets/Prints                  (21.9)       (11.8)                         (16.5) 
                                      -------------------------------------------------------
                                             4.1        (2.4)                            0.5 
                                                                                             
  Mattress Ticking                                                                           
      Culp Home Fashions                     6.3          5.7                            6.0 
                                                                                             
  Yarn                                                                                       
      Culp Yarn                            100.0        100.0                          100.0 
                                      -------------------------------------------------------
                                                                                             
                                            11.2          4.3                            7.4 
                                      =======================================================
                                                                                             
      Overall Growth Rate                                                                    
                                                                                             
  Internal (without acquisitions)           (4.6)        (0.9)                          (2.5) 
  External                                  15.8          5.2                            9.9 
                                      =======================================================
                                            11.2          4.3                            7.4 
                                      =======================================================
                                                                                             
  </TABLE>
  
  <PAGE>
                                                                  
  
  
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
   for the three and six month periods ended November 1, 1998 and November 2, 1997
  
  
  INCOME STATEMENT COMMENTS
  
       GENERAL  - Net sales  increased  4.3% to $128.2  million,  and the  company
  reported net income of $1.3 million compared with net income of $4.5 million for
  the second  quarter of last year.  Net sales for the  quarter,  excluding  Artee
  Industries, decreased .9% versus the same quarter of last year. Artee Industries
  was acquired at the beginning of the fourth  quarter of fiscal 1998. For the six
  months ended November 1, 1998, the company  reported a loss of $1.3 million,  or
  $0.10 per share,  compared with net income of $7.4  million,  or $0.57 per share
  diluted, in the year-earlier period.
  
  In building  its  business the company has  emphasized  several key  competitive
  strengths:
  
       Broad Product Offering - marketing one of the broadest product lines in the
  upholstery  fabrics  and  mattress  ticking  industry.   Through  its  extensive
  manufacturing capabilities,  the company competes in every major category of the
  industry except leather;
  
       Diverse  Global  Customer  Base -  penetrating  other  end-use  markets  in
  addition  to U.  S.  residential  furniture,  such  as  bedding,  international,
  commercial  furniture  and  juvenile  furniture;  sales to these  other  markets
  accounted for  approximately  52% of net sales for the quarter.  No one customer
  accounted  for more than 7% of net sales  during  the  second  quarter of fiscal
  1999;
  
       Design  Innovation - investing in the design of new patterns and  textures.
  The  company  has   significantly   increased   resources  (both  designers  and
  computer-aided design (CAD) systems) in the design and product development areas
  in each business unit. In January 1998, the company opened its  state-of-the-art
  design center in Burlington,  North Carolina.  The facility  enabled most of the
  company's  design  resources to be  consolidated  into one facility which offers
  advanced CAD systems for the design process;
  
       Vertical  Integration - realizing additional  manufacturing  integration by
  developing or acquiring resources for producing an increasing  proportion of the
  raw material components that are used in the manufacture of its products; and
  
       Ability to Integrate  Acquisitions  - investing  in selective  acquisitions
  complementary to existing business units.
  
       NET SALES -  Compared  with the second  quarter  of last  year,  upholstery
  fabric sales decreased 2.4% to $98.3 million;  mattress  ticking sales increased
  5.7% to $23.5 million;  and yarn sales  contributed $6.4 million for the quarter
  (See Sales by Business  Unit  schedule  on Page 5 and Sales by  Business  Unit -
  Trend Analysis on Page 7). International sales were down 4.6% for the quarter. A
  significant  decline  in sales to the Far  East/Asia  (principally  Russia)  was
  offset by higher shipments to the Middle East.
  
       The  decline  in sales  of  upholstery  fabrics  was due  principally  to a
  pronounced  slowdown in  international  sales of wet and  heat-transfer  printed
  flock fabrics.  This trend,  which the company  believes has also affected other
  manufacturers of upholstery  fabrics,  became apparent after the close of fiscal
  1998 and has been persistent thus far in fiscal 1999. A large  percentage of the
  company's  sales of this product line were being shipped  directly or indirectly
  to  customers  in the  emerging  markets  of  Russia  and  other  former  Soviet
  countries,   India  and  Eastern  Europe.  All  of  these  areas  are  generally
  experiencing very weak economic  conditions which, in turn, have affected demand
  for  furniture  and  other  home  furnishings.  The  company  has  significantly
  curtailed  production  schedules for these fabrics and has shifted its marketing
  focus  for this  product  category  to  geographic  areas  where  demand is more
  favorable.  The  company is seeking to build a  diversified  geographic  base of
  customers  internationally to minimize the exposure to economic uncertainties in
  any single geographic area.
  <PAGE>
  
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
   for the three and six month periods ended November 1, 1998 and November 2, 1997
  
  
  
       The increased  sales by Culp Home Fashions during the second quarter marked
  a  continuation  of the  longer-term  expansion  that  this  business  unit  has
  experienced.  Culp's growth in sales has been driven by the  introduction of new
  designs and fabric  constructions  as well as the  advantages  of the  company's
  vertical integration. In particular,  Culp's ability to manufacture the jacquard
  greige,  or unfinished,  goods that are then printed to produce mattress ticking
  has aided the  company  in  meeting  faster  delivery  schedules  and  providing
  improved overall customer service.
  
       GROSS PROFIT - Gross  profit  declined  9.9% for the quarter  versus a year
  ago. The decline was due  principally  to lower  margins at the Culp  Decorative
  Fabrics  and  Culp  Velvets/Prints   units.   Factors  contributing  to  reduced
  profitability of Culp Decorative Fabrics include  lower-than-expected  sales and
  competitive  pressure on pricing,  especially in the jacquard product  category.
  The lower gross profit at Culp  Velvets/Prints was due to the unexpectedly sharp
  decline in international sales of printed flock fabrics.  Although this business
  unit has taken substantial steps to reduce operating  expenses,  it continued to
  be affected by excess manufacturing capacity and lower absorption of fixed costs
  during the second quarter.
  
       To help offset the pressure on gross margins,  the company has instituted a
  number of actions.  A major change  involved a  reorganization  from six to four
  business units during the first quarter.  This new corporate  alignment  grouped
  related operations together and was accompanied by several changes in managerial
  positions.  Steps  underway  to improve  profitability  that are related to this
  realignment  include a significant  reduction in the capacity for  manufacturing
  printed  flock  fabrics,  comprehensive  programs to reduce  inventories  and an
  intense effort to reduce operating expenses and raise productivity.
  
       S,G&A EXPENSES - S,G&A expenses for the second quarter rose as a percentage
  of sales to 12.1% from 11.1 % for the same  period of last year.  This  increase
  was due  principally  to the shortfall in sales from the volume that the company
  had  planned to  support.  The  increase  in  absolute  dollars  from a year ago
  resulted from the Artee acquisition,  investment in additional design resources,
  increased costs in sampling new product and higher costs for credit expenses.
  
       INTEREST  EXPENSE - Interest  expense  increased  35.4%  compared  with the
  year-earlier quarter due to higher average borrowings outstanding. The increased
  borrowings  related  principally  to the  acquisitions  during  fiscal  1998  of
  Phillips Mills and Artee  Industries  and the  relatively  high level of capital
  expenditures in fiscal 1998.
  
       OTHER EXPENSE (INCOME),  NET - Other expense (income) increased to $604,000
  from $425,000 in the year-earlier  quarter.  A major factor  contributing to the
  increase was  amortization  of goodwill due to the  acquisitions  during  fiscal
  1998.
  
       INCOME TAXES - The  effective  tax rate for the quarter was 33.0%  compared
  with 35.0% for the prior year.
  
       EBITDA - EBITDA  for the  quarter  decreased  to $9.6  million  from  $12.6
  million  for last  year's  second  quarter  and  represented  7.5% of net  sales
  compared with 10.3% of net sales for the same period of last year.
  
  <PAGE>
  
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
   for the three and six month periods ended November 1, 1998 and November 2, 1997
  
  
  
  BALANCE SHEET COMMENTS
  
       WORKING CAPITAL - Accounts receivable decreased 1.8% from November 2, 1997,
  while sales  increased  4.3% for the second  quarter.  Day's  sales  outstanding
  represented 52 days,  down from 55 days at November 2, 1997, and up from 49 days
  at May 3,  1998.  Additionally,  the  aging of  accounts  receivable  was 94.9 %
  current  and less  than 30 days  past due  versus  97.8% at  November  2,  1997.
  Inventories  increased 3.1 % from November 2, 1997, and inventory turns were 5.7
  versus 6.1 for last year's second quarter.  The inventory increase is due to the
  acquisition of Artee  Industries,  partially  offset by a decrease in upholstery
  fabric inventories. Operating working capital (comprised of accounts receivable,
  inventory and accounts payable) increased to $112.7 million at November 1, 1998,
  for the reasons  mentioned  above,  from $107.8 million at November 2, 1997. The
  balance at May 3, 1998 was $115.2 million.
  
       PROPERTY,   PLANT  AND  EQUIPMENT  -  For  fiscal  1999,  the  company  has
  significantly  reduced  its  planned  capital  spending  to  $10-$15  million as
  compared  with $35.9 million  spent in fiscal 1998.  Culp is focused  instead on
  improving  the results of the  investments  made  during  fiscal 1997 and fiscal
  1998. The two largest projects that are currently  underway for fiscal 1999 are:
  (a) completion of the  polypropylene  yarn extrusion  expansion,  which began in
  early  fiscal  1998;  and (b)  building  expansions  in the Culp  Home  Fashions
  business  unit to  accommodate  the  continuing  growth  that is expected in the
  company's sales of mattress  ticking.  Depreciation for fiscal 1999 is currently
  estimated to be approximately $19 million.
  
       LONG-TERM DEBT - The company's  funded  debt-to-capital  ratio was 53.5% at
  November 1, 1998, up from 52.8% at November 2, 1997,  and even with 53.5% at May
  3, 1998.  Funded debt was $148.5  million at  November  1, 1998,  up from $131.8
  million at November 2, 1997 and down from $151.6 million at May 3, 1998. (Funded
  debt equals  long-term  debt,  including  current  maturities,  less  restricted
  investments,  which  represent  unspent IRB funds).  The decrease in funded debt
  from  May 3,  1998  resulted  primarily  from an  operating  cash  flow of $11.7
  million,  offset by capital  expenditures  of $6.4  million  and a  decrease  in
  accounts payable related to capital expenditures of $2.2 million.
metadata_documents: [{"type": "8-K", "sequence": "1", "description": "CULP, INC. 8-K", "secsgml_size_bytes": 63419}]
metadata_filer: {"company-data": {"conformed-name": "CULP INC", "cik": "0000723603", "assigned-sic": "2211", "irs-number": "561001967", "state-of-incorporation": "NC", "fiscal-year-end": "0430"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-12597", "film-number": "98754866"}, "business-address": {"street1": "101 S MAIN ST", "street2": "101 S MAIN ST", "city": "HIGH POINT", "state": "NC", "zip": "27261-2686", "phone": "3368895161"}, "mail-address": {"street1": "P O BOX 2686", "street2": "101 S MAIN ST", "city": "HIGH POINT", "state": "NC", "zip": "27261"}}
text: --------------------------------------------------------------------------------
  
                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549
  
                                     ---------
  
                                     Form 8-K
  
                                  CURRENT REPORT
  
                 Pursuant to Section 13 or 15(d) of the Securities
                               Exchange Act of 1934
  
                                   -------------
  
         Date of Report (Date of earliest event reported) November 18, 1998
  
                                     CULP, INC.
  
              (Exact name of registrant as specified in its charter)
  
          North Carolina                  0-12781                56-1001967
  
   (State or other jurisdiction    (Commission File No.)       (IRS Employer
         of incorporation)                                  Identification No.)
  
                               101 South Main Street
                         High Point, North Carolina  27260
                     (Address of principal executive offices)
                                  (336) 889-5161
               (Registrant's telephone number, including area code)
  
                                                                                
           (Former name or former address, if changed since last report)
  
  --------------------------------------------------------------------------------
  Item 5. Other Events
  
  See  attached  Press  Release (2 pages) and  Financial  Information  Release (10
  pages),  both  dated  November  18,  1998,  related to the  fiscal  1999  second
  quarter  ended November 1, 1998.
  
  Forward  Looking  Information.  This Report  contains  statements  that could be
  deemed   "forward-looking   statements"   within  the  meaning  of  the  federal
  securities  laws,   which  statements  are  inherently   subject  to  risks  and
  uncertainties.   Forward-looking   statements   are   statements   that  include
  projections,   expectations  or  beliefs  about  future  events  or  results  or
  otherwise are not  statements  of historical  fact.  Such  statements  are often
  characterized  by  qualifying  words such as  "expect,"  "believe,"  "estimate,"
  "plan" and "project"  and their  derivatives.  Factors that could  influence the
  matters  discussed in such  statements  include the level of housing  starts and
  sales of existing homes,  consumer confidence,  trends in disposable income, and
  general  economic  conditions.  Decreases  in these  economic  indicators  could
  have a  negative  effect on the  Company's  business  and  prospects.  Likewise,
  increases in interest rates,  particularly  home mortgage  rates,  and increases
  in consumer  debt or the general  rate of  inflation,  could  affect the Company
  adversely.  In  addition,  the  value  of the U. S.  dollar  relative  to  other
  currencies  can  affect  the   ompetitiveness  of  the  Company's  products  in
  international    markets.    Economic   and   political   instability   in   the
  international area could also affect the demand for the Company's products.
   
  
                                     SIGNATURE
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
   
                                      CULP, INC.
                                      (Registrant)
  
                                By:    Phillip W. Wilson 
                                       Vice President and
                                       Chief Financial Officer
  
   
  Dated:   November 18, 1998
  CULP Reports Second Quarter Earnings
  Page 1
  Nov. 18, 1998
  
                                                   -MORE-
  
  FOR IMMEDIATE RELEASE
  
                        CULP REPORTS SECOND QUARTER EARNINGS
   
                RESULTS SIGNAL IMPROVEMENT COMPARED WITH FIRST PERIOD
  
  HIGH POINT, N.C. (Nov. 18, 1998) Culp, Inc. (NYSE: CFI) today reported net sales
  and net income for the second quarter of its 1999 fiscal year.
  
       For the three months ended  November 1, 1998,  Culp reported that net sales
  increased  4.3% to $128.2  million  compared with $122.9 million a year ago. Net
  income for the quarter was $1.3 million,  or $0.10 per share  diluted,  compared
  with $4.5 million, or $0.35 per share diluted, a year ago.
  
       Net sales for the first half of fiscal 1999 totaled $238.8 million, up 7.4%
  from $222.4 million in the first six months of fiscal 1998. The company reported
  a loss for the first half of $1.3 million, or $0.10 per share, compared with net
  income of $7.4 million, or $0.57 per share diluted, in the year-earlier period.
  
       "The net income for the second quarter represents a gratifying  improvement
  compared with our  corporate  performance  in the first  period," said Robert G.
  Culp, III, chief executive officer.  "We are encouraged by the progress realized
  to date through the actions taken to restore Culp's profitability. Our focus has
  included reducing costs and lowering manufacturing capacity,  especially related
  to our  international  business,  to match  the lower  level of demand  that has
  persisted  this year.  We did achieve  higher  sales for the second  quarter and
  first  half;  but  those  gains  were  due to the  contributions  from  acquired
  operations.
  
       "Our goal is to realize further  progress over the remainder of this fiscal
  year, but we do not expect the full impact of the changes we have made to become
  apparent until during fiscal 2000.  During the second  quarter,  we restructured
  the sales  organizations  for two of our four business  units,  Culp  Decorative
  Fabrics and Culp  Velvets/Prints.  This realignment in marketing personnel was a
  logical extension of the corporate  reorganization  that was implemented earlier
  this year to reflect the expanded size of our business  units and to support the
  company's  planned future  expansion.  The response within our  organization has
  been very supportive of these moves,  and that commitment  further  supports our
  fundamental confidence about Culp's prospects."
  Culp added,  "Some  forecasts  have emerged that suggest  concern  about an
  overall economic slowdown over the next several  quarters.  The latest trends in
  factors  such as consumer  confidence,  employment  levels and  mortgage  rates,
  however,  suggest a  favorable  outlook for  overall  consumer  spending on home
  furnishings.  We are very  pleased  with the  response to the new  patterns  and
  textures  that Culp  introduced  to retailers  at the recent  trade  conference.
  Enhancing  the value of our fabrics to  manufacturers  of furniture  and bedding
  remains our  mission,  and the  continued  integration  of our  expanded  design
  resources  with  the  company's  broad  manufacturing  capabilities  is a  vital
  component in our strategy."
   
       Culp, Inc. is the world's largest  manufacturer  and marketer of upholstery
  fabrics for furniture and is a leading producer of mattress ticking for bedding.
  The Company's  fabrics are used primarily in the  production of residential  and
  commercial furniture and bedding products.
  
                                     CULP, INC.
                           Condensed Financial Highlights
                                     (Unaudited)
  Three Months Ended    
                                                           November 1,           November 2,
                                                              1998                  1997
  Net sales                                             $    128,159,000      $   122,926,000
  Net income                                            $      1,307,000      $     4,505,000
  Net income per share:
     Basic                                              $           0.10      $          0.36
     Diluted                                            $           0.10      $          0.35
  Average shares outstanding:
     Basic                                                    12,995,000           12,668,000
     Diluted                                                  13,120,000           12,980,000
  
                                                                Six Months Ended             
                                                           November 1,           November 2,
                                                              1998                  1997
  Net sales                                             $    238,826,000      $   222,424,000
  Net income (loss)                                     $     (1,333,000)     $     7,355,000
  Net income (loss) per share:
     Basic                                              $          (0.10)     $          0.58
     Diluted                                            $          (0.10)     $          0.57
  Average shares outstanding:
     Basic                                                    12,998,000           12,649,000
     Diluted                                                  13,175,000           12,953,000
  This  release  contains   statements  that  could  be  deemed   "forward-looking
  statements,"  within the meaning of the federal securities laws. Such statements
  are inherently  subject to risks and uncertainties.  Forward-looking  statements
  are statements  that include  projections,  expectations or beliefs about future
  events or results or otherwise  are not  statements  of  historical  fact.  Such
  statements  are  often  characterized  by  qualifying  words  such as  "expect,"
  "believe," "estimate," "plan" and "project" and their derivatives.  Factors that
  could influence the matters  discussed in such  statements  include the level of
  housing  starts and sales of  existing  homes,  consumer  confidence,  trends in
  disposable income and general economic  conditions.  Decreases in these economic
  indicators could have a negative effect on the company's business and prospects.
  Likewise,  increases in interest rates,  particularly  home mortgage rates,  and
  increases in consumer  debt or the general rate of  inflation,  could affect the
  company adversely.  Because of the increasing  percentage of the company's sales
  derived by  international  shipments,  strengthening  of the U.S. dollar against
  other currencies could make the company's products less competitive on the basis
  of price in  markets  outside  the United  States.  Additionally,  economic  and
  political  instability  in  international  areas could affect the demand for the
  company's products.
   
                                        -END-
  CULP, INC. FINANCIAL INFORMATION RELEASE
                      CONSOLIDATED STATEMENTS OF INCOME (LOSS)
   FOR THE THREE MONTHS AND SIX MONTHS ENDED NOVEMBER 1, 1998 AND NOVEMBER 2, 1997
  
                  (Amounts in Thousands, Except for Per Share Data)
  THREE MONTHS ENDED (UNAUDITED)
                                               ---------------------------------------------------------------------------------
  
                                                          Amounts                                          Percent of Sales
                                               -------------------------------                       -----------------------------
                                                November 1,     November 2,        % Over
                                                   1998             1997          (Under)               1999            1998
                                               --------------  ---------------  -------------        --------------  -------------
  Net sales                                 $        128,159          122,926         4.3  %               100.0  %         100.0  %
  Cost of sales                                      107,685          100,191         7.5  %                84.0  %          81.5  %
                                               --------------  ---------------  -------------        --------------    -------------
           Gross profit                               20,474           22,735        (9.9) %                16.0  %          18.5  %
  
  Selling, general and
    administrative expenses                           15,474           13,632        13.5  %                12.1  %          11.1  %
                                               --------------  ---------------  -------------        --------------    -------------
           Income from operations                      5,000            9,103       (45.1) %                 3.9  %           7.4  %
  
  Interest expense                                     2,464            1,820        35.4  %                 1.9  %           1.5  %
  Interest income                                        (19)             (72)      (73.6) %                (0.0) %          (0.1) %
  Other expense (income), net                            604              425        42.1  %                 0.5  %           0.3  %
                                               --------------  ---------------  -------------        --------------    -------------
           Income before income taxes                  1,951            6,930       (71.8) %                 1.5  %           5.6  %
  
  Income taxes  *                                        644            2,425       (73.4) %                33.0  %          35.0  %
                                               --------------  ---------------  -------------        --------------    -------------
           Net income                       $          1,307            4,505       (71.0) %                 1.0  %           3.7  %
                                               ==============  ===============  =============        ==============    =============
  
  Net income per share                                 $0.10            $0.36       (72.2) %
  Net income per share, assuming dilution              $0.10            $0.35       (71.4) %
  Dividends per share                                 $0.035           $0.035         0.0  %
  Average shares outstanding                          12,995           12,668         2.6  %
  Average shares outstanding, assuming dilution       13,120           12,980         1.1  %
  
                                                                         SIX MONTHS ENDED (UNAUDITED)
                                               ---------------------------------------------------------------------------------
  
                                                          Amounts                                          Percent of Sales
                                               -------------------------------                       -----------------------------
                                                November 1,     November 2,        % Over
                                                   1998             1997          (Under)               1999            1998
                                               --------------  ---------------  -------------        --------------  ----------
  
  Net sales                                 $        238,826          222,424          7.4  %              100.0  %      100.0  %
  Cost of sales                                      204,741          182,956         11.9  %               85.7  %       82.3  %
                                               --------------  ---------------  -------------        --------------  ------------
           Gross profit                               34,085           39,468        (13.6) %               14.3  %       17.7  %
  
  Selling, general and
    administrative expenses                           29,947           24,548         22.0  %               12.5  %       11.0  %
                                               --------------  ---------------  -------------        --------------  ------------
           Income from operations                      4,138           14,920        (72.3) %                1.7  %        6.7  %
  
  Interest expense                                     4,825            3,100         55.6  %                2.0  %        1.4  %
  Interest income                                        (72)            (162)       (55.6) %               (0.0) %       (0.1) %
  Other expense (income), net                          1,374              667        106.0  %                0.6  %        0.3  %
                                               --------------  ---------------  -------------        --------------  ------------
           Income (loss) before income taxes          (1,989)          11,315       (117.6) %               (0.8) %        5.1  %
           
  Income taxes  *                                       (656)           3,960       (116.6) %               33.0  %       35.0  %
                                               --------------  ---------------  -------------        --------------  ------------
                                                              
           Net income (loss)                $         (1,333)           7,355       (118.1) %               (0.6) %        3.3  %
                                               ==============  ===============  =============        ==============  ============
  
  Net income (loss) per share                         ($0.10)            $0.58      (117.2) %
  Net income (loss) per share, assuming dilution      ($0.10)            $0.57      (117.5) %
  Dividends per share                                  $0.07             $0.07         0.0  %
  Average shares outstanding                          12,998            12,649         2.8  %
  Average shares outstanding, assuming dilution       13,175            12,953         1.7  %
  * Percent of sales column is  calculated  as a % of income  (loss) before income
  taxes.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                             CONSOLIDATED BALANCE SHEETS
                 NOVEMBER 1, 1998, NOVEMBER 2, 1997 AND MAY 3, 1998
                                      Unaudited
                               (Amounts in Thousands)
  Amounts                             
                                                   ---------------------------------    Increase (Decrease)               * May 3,
                                                       November 1,      November 2,   --------------------------------
                                                          1998             1997            Dollars         Percent           1998
                                                   ----------------  ---------------  ----------------    -------------  ------------
  
  Current assets
  Cash and cash investments               $       1,177            1,209               (32)        (2.6) %           2,312
         Accounts receivable                            72,998           74,314            (1,316)        (1.8) %          73,773
         Inventories                                    72,392           70,192             2,200          3.1  %          78,594
         Other current assets                            7,230            6,136             1,094         17.8  %           7,808
                                                   ------------  ---------------  ----------------    -------------  ------------
                    Total current assets               153,797          151,851             1,946          1.3  %         162,487
                                                                                   
  Restricted investments                                 3,409            8,258            (4,849)       (58.7) %           4,021
  Property, plant & equipment, net                     126,050          107,377            18,673         17.4  %         128,805
  Goodwill                                              54,433           49,778             4,655          9.4  %          55,162
  Other assets                                           4,333            3,715               618         16.6  %           4,340
                                                   ------------  ---------------  ----------------    -------------  ------------
                                                                                                       
                    Total assets                 $     342,022          320,979            21,043          6.6  %         354,815
                                                   ============  ===============  ================    =============  ============
  
                                                                                                       
                                                                                                       
  Current liabilities
         Current maturities of long-term  debt   $       1,678              100             1,578      1,578.0  %           3,325
         Accounts payable                               32,640           36,709            (4,069)       (11.1) %          37,214
         Accrued expenses                               17,143           15,175             1,968         13.0  %          17,936
         Income taxes payable                                0            1,034            (1,034)      (100.0) %           1,282
                                                   ------------  ---------------  ----------------    -------------  ------------
                    Total current liabilities           51,461           53,018            (1,557)        (2.9) %          59,757
                    
                                                                                                       
  Long-term debt                                       150,210          139,991            10,219          7.3  %         152,312
                                                                                                       
  Deferred income taxes                                 11,227            9,965             1,262         12.7  %          11,227
                                                   ------------  ---------------  ----------------    -------------  ------------
                    Total liabilities                  212,898          202,974             9,924          4.9  %         223,296
                                                                                                       
  Shareholders' equity                                 129,124          118,005            11,119          9.4  %         131,519
                                                   ------------  ---------------  ----------------    -------------  ------------
                    Total liabilities and                                                              
                    shareholders' equity         $     342,022          320,979            21,043          6.6  %         354,815
                                                   ============  ===============  ================    =============  ============
                                                                                                      
  Shares outstanding                                    12,995           12,687               308          2.4  %          13,007
                                                   ============  ===============  ================    =============  ============
  * Derived from audited financial statements.
  CULP, INC. FINANCIAL
                                 INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE SIX MONTHS ENDED NOVEMBER 1, 1998 AND NOVEMBER 2, 1997
                                      Unaudited
                               (Amounts in Thousands)
  SIX MONTHS ENDED
                                                                              ----------------------------------
  
                                                                                          Amounts
                                                                              --------------------------------
                                                                               November 1,      November 2,
                                                                                   1998             1997
                                                                              ---------------  ---------------
  
  Cash flows from operating activities:
  Net income  (loss)                                                $           (1,333)           7,355
       Adjustments to reconcile net income (loss) to net
          cash provided by (used in) operating activities:
              Depreciation                                                            9,198            6,869
              Amortization of intangible assets                                         829              533
              Changes in assets and liabilities:
                  Accounts receivable                                                   775          (17,623)
                  Inventories                                                         6,202          (11,813)
                  Other current assets                                                  578             (686)
                  Other assets                                                          (93)            (188)
                  Accounts payable                                                   (2,395)          10,668
                  Accrued expenses                                                     (793)             295
                  Income taxes payable                                               (1,282)            (546)
                                                                              ---------------  ---------------
                      Net cash provided by (used in) operating activities            11,686           (5,136)
                                                                              ---------------  ---------------
  Cash flows from investing activities:                                                         
       Capital expenditures                                                          (6,443)         (19,216)
       Purchases of restricted investments                                              (66)          (8,662)
       Purchase of investments to fund deferred compensation liability                    0             (581)
       Sale of restricted investments                                                   678           11,422
       Business acquired                                                                  0          (36,628)
                                                                              ---------------  ---------------
                      Net cash used in investing activities                          (5,831)         (53,665)
                                                                              ---------------  ---------------
  Cash flows from financing activities:                                                         
       Proceeds from issuance of long-term debt                                       2,535           63,500
       Principal payments on long-term debt                                          (6,284)             (50)
       Change in accounts payable-capital expenditures                               (2,179)          (3,862)
       Dividends paid                                                                  (910)            (889)
       Common stock issued (purchased)                                                 (152)             481
                                                                              ---------------  ---------------
                      Net cash provided by (used in) financing activities            (6,990)          59,180
                                                                              ---------------  ---------------
                                                                                                
  Increase (decrease) in cash and cash investments                                   (1,135)             379
                                                                                                
  Cash and cash investments at beginning of period                                    2,312              830
                                                                              ---------------  ---------------
                                                                                                
  Cash and cash investments at end of period                             $            1,177            1,209
                                                                              ===============  ===============
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL ANALYSIS
                                  NOVEMBER 1, 1998
  FISCAL 98                            FISCAL 99                                           
                                           -------------   ---------------------------------------------------------   ---------------
                                                Q2              Q1             Q2            Q3            Q4               LTM       
                                           -------------   ---------------------------------------------------------   ---------------
  
  INVENTORIES
  Inventory turns                           6.1              4.9            5.7                                               
  
  RECEIVABLES
          Days sales in  receivables                 55               48             52                                               
          Percent current & less than 30
            days past due                         97.8%            93.8%          94.9%                                               
  WORKING CAPITAL
          Current ratio                             2.9              3.1            3.0                                               
          Working capital turnover (4)              4.8              4.5            4.4                                               
          Operating working capital (4)        $107,797         $111,481       $112,750                                               
  
  PROPERTY, PLANT & EQUIPMENT
          Depreciation rate                        7.4%             7.7%           8.4%                                               
          Percent property,
            plant & equipment are depreciated     45.3%            43.8%          45.0%                                               
          Capital expenditures                  $35,879 (1)       $2,858         $3,585                                               
  
  PROFITABILITY
          Return on average total capital         10.0%           (1.6%)           4.2%                                          4.8% 
          Return on average equity                15.6%           (8.1%)           4.1%                                          5.4% 
          Net income (loss) per share             $0.36          ($0.20)          $0.10                                         $0.53 
          Net income (loss) per share (diluted)   $0.35          ($0.20)          $0.10                                         $0.52
          
  
  LEVERAGE (3)
          Total liabilities/equity               172.0%           167.2%         164.9%                                               
          Funded debt/equity                     111.7%           119.7%         115.0%                                               
          Funded debt/capital employed            52.8%            54.5%          53.5%                                               
          Funded debt                          $131,833         $153,559       $148,479                                               
          Funded debt/EBITDA (LTM) (6)              3.1             3.75           3.95                                              
          EBITDA/Interest expense, net (LTM)        8.5              4.9            4.2
  
  OTHER
          Book value per share                    $9.30            $9.87          $9.94                                               
          Employees at quarter end                3,554            4,230          4,014                                               
          Sales per employee (annualized)      $146,000         $103,000       $124,000                                               
          Capital employed (3)                 $249,838         $281,831       $277,603                                               
          Effective income tax rate               35.0%            33.0%          33.0%                                               
          EBITDA (2)                            $12,643           $3,142         $9,649                                       $35,977 
          EBITDA/net sales                        10.3%             2.8%           7.5%                                          7.3%
  (1) Expenditures for entire year
    (2) Earnings before interest, income taxes, and depreciation & amortization.
    (3) Long-term debt, funded debt and capital employed are all net of restricted
        investments.
    (4) Working capital for this calculation is accounts receivable, inventories 
        and accounts payable.
    (5) LTM represents "Latest Twelve Months"
    (6) EBITDA includes capitalized interest and pro forma amounts for Wetumpka 
        and Artee acquisitions.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                       SALES BY PRODUCT CATEGORY/BUSINESS UNIT
   FOR THE THREE MONTHS AND SIX MONTHS ENDED NOVEMBER 1, 1998 AND NOVEMBER 2, 1997
                               (Amounts in thousands)
  THREE MONTHS ENDED (UNAUDITED)
                                         --------------------------------------------------------------------------
  
                                                  Amounts                                Percent of Total Sales
                                         --------------------------                    ----------------------------
                                         November 1,   November 2,        % Over
  Product Category/Business Unit            1998          1997           (Under)        1999            1998
  ------------------------------------   ------------  ------------   ---------------  -------------   ------------
  
  Upholstery Fabrics
  Culp Decorative Fabrics         $       59,573        56,781         4.9  %          46.5 %          46.2 %
      Culp Velvets/Prints                     38,728        43,928       (11.8) %          30.2 %          35.7 %
                                         ------------  ------------   ---------------  -------------   ------------
                                              98,301       100,709        (2.4) %          76.7 %          81.9 %
  
  Mattress Ticking
      Culp Home Fashions                      23,491        22,217         5.7  %          18.3 %          18.1 %
  
  Yarn
     Culp Yarn                                 6,367             0       100.0  %           5.0 %           0.0 %
                                         ------------  ------------   ---------------  -------------   ------------
  
                                    * $      128,159       122,926         4.3  %         100.0 %         100.0 %
                                         ============  ============   ===============  =============   ============
  
                                                               SIX MONTHS ENDED (UNAUDITED)
                                         --------------------------------------------------------------------------
  
                                                  Amounts                                Percent of Total Sales
                                         --------------------------                    ----------------------------
                                         November 1,   November 2,        % Over
  Product Category/Business Unit            1998          1997           (Under)        1999            1998
  ------------------------------------   ------------  ------------   ---------------  -------------   ------------
  
  Upholstery Fabrics
      Culp Decorative Fabrics         $      111,018        96,595        14.9  %          46.5 %          43.4 %
      Culp Velvets/Prints                     68,722        82,325       (16.5) %          28.8 %          37.0 %
                                         ------------  ------------   ---------------  -------------   ------------
                                             179,740       178,920         0.5  %          75.3 %          80.4 %
  
  Mattress Ticking
      Culp Home Fashions                      46,123        43,504         6.0  %          19.3 %          19.6 %
  
  Yarn
     Culp Yarn                                12,963             0       100.0  %           5.4 %           0.0 %
                                         ------------  ------------   ---------------  -------------   ------------
  
                                    * $      238,826       222,424         7.4  %         100.0 %         100.0 %
                                         ============  ============   ===============  =============   ============
  * U.S.  sales were $94,472 and $87,622 for the second quarter of fiscal 1999 and
  fiscal  1998,  respectively;  and  $178,782  and  $162,029 for the six months of
  fiscal 1999 and fiscal 1998, respectively. The percentage increase in U.S. sales
  was 7.8% for the second quarter and an increase of 10.3% for the six months.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                       INTERNATIONAL SALES BY GEOGRAPHIC AREA
   FOR THE THREE MONTHS AND SIX MONTHS ENDED NOVEMBER 1, 1998 AND NOVEMBER 2, 1997
                               (Amounts in thousands)
  THREE MONTHS ENDED (UNAUDITED)
                                         --------------------------------------------------------------------------------
  
                                                    Amounts                                   Percent of Total Sales
                                         -------------------------------                   ------------------------------
                                          November 1,      November 2,       % Over
           Geographic Area                    1998            1997           (Under)         1999             1998
  ----------------------------------     ---------------  --------------  --------------   -------------     ------------
  North America (Excluding USA)     $             8,502           8,162        4.2  %           25.2 %           23.1 %
  Europe                                          7,223           6,624        9.0  %           21.4 %           18.8 %
  Middle East                                    10,060           7,439       35.2  %           29.9 %           21.1 %
  Far East & Asia                                 5,435           9,720      (44.1) %           16.1 %           27.5 %
  South America                                   1,238           1,216        1.8  %            3.7 %            3.4 %
  All other areas                                 1,229           2,143      (42.7) %            3.6 %            6.1 %
                                         ---------------  --------------  --------------   -------------     ------------
  
                                    $            33,687          35,304       (4.6) %          100.0 %          100.0 %
                                         ===============  ==============  ==============   =============     ============
  
                                                                  SIX MONTHS ENDED (UNAUDITED)
                                         --------------------------------------------------------------------------------
  
                                                    Amounts                                   Percent of Total Sales
                                         -------------------------------                   ------------------------------
                                          November 1,      November 2,       % Over
           Geographic Area                    1998            1997           (Under)         1999             1998
  ----------------------------------     ---------------  --------------  --------------   -------------     ------------
  North America (Excluding USA)     $            15,755          15,206        3.6  %           26.2 %           25.2 %
  Europe                                         10,906          11,125       (2.0) %           18.2 %           18.4 %
  Middle East                                    18,360          14,003       31.1  %           30.6 %           23.2 %
  Far East & Asia                                10,303          15,662      (34.2) %           17.2 %           25.9 %
  South America                                   2,238           1,462       53.1  %            3.7 %            2.4 %
  All other areas                                 2,482           2,937      (15.5) %            4.1 %            4.9 %
                                         ---------------  --------------  --------------   -------------     ------------
  
                                    $            60,044          60,395       (0.6) %          100.0 %          100.0 %
                                         ===============  ==============  ==============   =============     ============
  International  sales,  and the  percentage of total sales,  for each of the last
  seven fiscal years  follows:  fiscal 1992-$  37,913 (20%);  fiscal 1993-$ 41,471
  (21%);  fiscal 1994-$ 44,038  (18%);  fiscal 1995-$ 57,971 (19%);  fiscal 1996-$
  77,397 (22%);  fiscal 1997-$  101,571  (25%);  and fiscal 1998-$ 137,223 (29%) .
  International  sales for the second quarter represented 26.3% and 28.7% for 1999
  and 1998, respectively.  Year-to-date  international sales represented 25.1% and
  27.2% of total sales for 1999 and 1998, respectively.
  Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1997 vs 1998 vs 1999
                                      Unaudited
                               (Amounts in thousands)
  Fiscal 1997                                             Fiscal 1998             
                               ---------------------------------------------------  --------------------------------------------------
    Product Category/Business    Q1         Q2         Q3        Q4       TOTAL       Q1        Q2         Q3        Q4       TOTAL   
              Units
  -----------------------------
  
  Upholstery Fabrics
  Culp Decorative Fabrics    38,966     45,723     39,342    43,699    167,730    39,814    56,781     53,415    60,155    210,165
      Culp Velvets/Prints        34,867     40,233     40,387    40,980    156,467    38,397    43,928     44,020    45,044    171,389
                               ---------------------------------------------------  --------------------------------------------------
                                 73,833     85,956     79,729    84,679    324,197    78,211   100,709     97,435   105,199    381,554
  
  Mattress Ticking
      Culp Home Fashions         16,696     19,248     17,739    20,999     74,682    21,287    22,217     20,261    23,520     87,285
  
  Yarn
      Culp Yarn                       -          -          -         -          -         -         -        761     7,115      7,876
                               ---------------------------------------------------  --------------------------------------------------
  
                                 90,529    105,204     97,468   105,678    398,879    99,498   122,926    118,457   135,834    476,715
                               ===================================================  ==================================================
  
                     Percent increase(decrease) from prior year:
  Product Category/Business Units
  --------------------------------------------------------------------------------  --------------------------------------------------
  
  Upholstery Fabrics           
      Culp Decorative Fabrics      18.3       12.4        0.2     (4.4)        5.8       2.2      24.2       35.8      37.7       25.3
      Culp Velvets/Prints          48.2       25.4       26.9       7.1       24.5      10.1       9.2        9.0       9.9        9.5
                               ---------------------------------------------------  --------------------------------------------------
                                   30.8       18.1       12.2       0.8       14.0       5.9      17.2       22.2      24.2       17.7
  
  Mattress Ticking
      Culp Home Fashions            5.1        7.4       15.3      15.5       10.8      27.5      15.4       14.2      12.0       16.9
  
  Yarn
      Culp Yarn                       -          -          -         -          -         -         -      100.0     100.0      100.0
                               ---------------------------------------------------  --------------------------------------------------
  
                                   25.1       16.0       12.7       3.4       13.4       9.9      16.8       21.5      28.5       19.5
                               ===================================================  ==================================================
  
      Overall Growth Rate
  
  Internal (without acquisitions)  25.1       16.0       12.7       3.4       13.4       9.9       6.6        9.2      11.6        9.3
  External                            -          -          -         -          -         -      10.2       12.3      16.9       10.2
                               ---------------------------------------------------  --------------------------------------------------
                                                                                                                                      
                                   25.1       16.0       12.7       3.4       13.4       9.9      16.8       21.5      28.5       19.5
                               ===================================================  ==================================================
  Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1997 vs 1998 vs 1999
                                      Unaudited
                               (Amounts in thousands)
  Fiscal 1999                       
    Product Category/Business        -------------------------------------------------------
              Units                      Q1          Q2          Q3         Q4      TOTAL   
  -------------------------------                                                           
                                                                                            
  Upholstery Fabrics
  Culp Decorative Fabrics             51,445       59,573                        111,018                                          
      Culp Velvets/Prints                 29,994       38,728                         68,722 
                                      -------------------------------------------------------
                                          81,439       98,301                        179,740 
                                                                                             
  Mattress Ticking                                                                           
      Culp Home Fashions                  22,632       23,491                         46,123 
                                                                                             
  Yarn                                                                                       
      Culp Yarn                            6,596        6,367                         12,963 
                                      -------------------------------------------------------
                                                                                             
                                         110,667      128,159                        238,826 
                                      =======================================================
                                                                                             
                                                                                             
                     Percent increase(decrease) from prior year:
  Product Category/Business Units
                                                                                             
                                           
                                                                                             
  Upholstery Fabrics                                                                         
      Culp Decorative Fabrics               29.2          4.9                           14.9 
      Culp Velvets/Prints                  (21.9)       (11.8)                         (16.5) 
                                      -------------------------------------------------------
                                             4.1        (2.4)                            0.5 
                                                                                             
  Mattress Ticking                                                                           
      Culp Home Fashions                     6.3          5.7                            6.0 
                                                                                             
  Yarn                                                                                       
      Culp Yarn                            100.0        100.0                          100.0 
                                      -------------------------------------------------------
                                                                                             
                                            11.2          4.3                            7.4 
                                      =======================================================
                                                                                             
      Overall Growth Rate                                                                    
                                                                                             
  Internal (without acquisitions)           (4.6)        (0.9)                          (2.5) 
  External                                  15.8          5.2                            9.9 
                                      =======================================================
                                            11.2          4.3                            7.4 
                                      =======================================================
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
   for the three and six month periods ended November 1, 1998 and November 2, 1997
  
  INCOME STATEMENT COMMENTS
  
       GENERAL  - Net sales  increased  4.3% to $128.2  million,  and the  company
  reported net income of $1.3 million compared with net income of $4.5 million for
  the second  quarter of last year.  Net sales for the  quarter,  excluding  Artee
  Industries, decreased .9% versus the same quarter of last year. Artee Industries
  was acquired at the beginning of the fourth  quarter of fiscal 1998. For the six
  months ended November 1, 1998, the company  reported a loss of $1.3 million,  or
  $0.10 per share,  compared with net income of $7.4  million,  or $0.57 per share
  diluted, in the year-earlier period.
  
  In building  its  business the company has  emphasized  several key  competitive
  strengths:
  
       Broad Product Offering - marketing one of the broadest product lines in the
  upholstery  fabrics  and  mattress  ticking  industry.   Through  its  extensive
  manufacturing capabilities,  the company competes in every major category of the
  industry except leather;
  
       Diverse  Global  Customer  Base -  penetrating  other  end-use  markets  in
  addition  to U.  S.  residential  furniture,  such  as  bedding,  international,
  commercial  furniture  and  juvenile  furniture;  sales to these  other  markets
  accounted for  approximately  52% of net sales for the quarter.  No one customer
  accounted  for more than 7% of net sales  during  the  second  quarter of fiscal
  1999;
  
       Design  Innovation - investing in the design of new patterns and  textures.
  The  company  has   significantly   increased   resources  (both  designers  and
  computer-aided design (CAD) systems) in the design and product development areas
  in each business unit. In January 1998, the company opened its  state-of-the-art
  design center in Burlington,  North Carolina.  The facility  enabled most of the
  company's  design  resources to be  consolidated  into one facility which offers
  advanced CAD systems for the design process;
  
       Vertical  Integration - realizing additional  manufacturing  integration by
  developing or acquiring resources for producing an increasing  proportion of the
  raw material components that are used in the manufacture of its products; and
  
       Ability to Integrate  Acquisitions  - investing  in selective  acquisitions
  complementary to existing business units.
  
       NET SALES -  Compared  with the second  quarter  of last  year,  upholstery
  fabric sales decreased 2.4% to $98.3 million;  mattress  ticking sales increased
  5.7% to $23.5 million;  and yarn sales  contributed $6.4 million for the quarter
  (See Sales by Business  Unit  schedule  on Page 5 and Sales by  Business  Unit -
  Trend Analysis on Page 7). International sales were down 4.6% for the quarter. A
  significant  decline  in sales to the Far  East/Asia  (principally  Russia)  was
  offset by higher shipments to the Middle East.
  
       The  decline  in sales  of  upholstery  fabrics  was due  principally  to a
  pronounced  slowdown in  international  sales of wet and  heat-transfer  printed
  flock fabrics.  This trend,  which the company  believes has also affected other
  manufacturers of upholstery  fabrics,  became apparent after the close of fiscal
  1998 and has been persistent thus far in fiscal 1999. A large  percentage of the
  company's  sales of this product line were being shipped  directly or indirectly
  to  customers  in the  emerging  markets  of  Russia  and  other  former  Soviet
  countries,   India  and  Eastern  Europe.  All  of  these  areas  are  generally
  experiencing very weak economic  conditions which, in turn, have affected demand
  for  furniture  and  other  home  furnishings.  The  company  has  significantly
  curtailed  production  schedules for these fabrics and has shifted its marketing
  focus  for this  product  category  to  geographic  areas  where  demand is more
  favorable.  The  company is seeking to build a  diversified  geographic  base of
  customers  internationally to minimize the exposure to economic uncertainties in
  any single geographic area.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
   for the three and six month periods ended November 1, 1998 and November 2, 1997
  
       The increased  sales by Culp Home Fashions during the second quarter marked
  a  continuation  of the  longer-term  expansion  that  this  business  unit  has
  experienced.  Culp's growth in sales has been driven by the  introduction of new
  designs and fabric  constructions  as well as the  advantages  of the  company's
  vertical integration. In particular,  Culp's ability to manufacture the jacquard
  greige,  or unfinished,  goods that are then printed to produce mattress ticking
  has aided the  company  in  meeting  faster  delivery  schedules  and  providing
  improved overall customer service.
  
       GROSS PROFIT - Gross  profit  declined  9.9% for the quarter  versus a year
  ago. The decline was due  principally  to lower  margins at the Culp  Decorative
  Fabrics  and  Culp  Velvets/Prints   units.   Factors  contributing  to  reduced
  profitability of Culp Decorative Fabrics include  lower-than-expected  sales and
  competitive  pressure on pricing,  especially in the jacquard product  category.
  The lower gross profit at Culp  Velvets/Prints was due to the unexpectedly sharp
  decline in international sales of printed flock fabrics.  Although this business
  unit has taken substantial steps to reduce operating  expenses,  it continued to
  be affected by excess manufacturing capacity and lower absorption of fixed costs
  during the second quarter.
  
       To help offset the pressure on gross margins,  the company has instituted a
  number of actions.  A major change  involved a  reorganization  from six to four
  business units during the first quarter.  This new corporate  alignment  grouped
  related operations together and was accompanied by several changes in managerial
  positions.  Steps  underway  to improve  profitability  that are related to this
  realignment  include a significant  reduction in the capacity for  manufacturing
  printed  flock  fabrics,  comprehensive  programs to reduce  inventories  and an
  intense effort to reduce operating expenses and raise productivity.
  
       S,G&A EXPENSES - S,G&A expenses for the second quarter rose as a percentage
  of sales to 12.1% from 11.1 % for the same  period of last year.  This  increase
  was due  principally  to the shortfall in sales from the volume that the company
  had  planned to  support.  The  increase  in  absolute  dollars  from a year ago
  resulted from the Artee acquisition,  investment in additional design resources,
  increased costs in sampling new product and higher costs for credit expenses.
  
       INTEREST  EXPENSE - Interest  expense  increased  35.4%  compared  with the
  year-earlier quarter due to higher average borrowings outstanding. The increased
  borrowings  related  principally  to the  acquisitions  during  fiscal  1998  of
  Phillips Mills and Artee  Industries  and the  relatively  high level of capital
  expenditures in fiscal 1998.
  
       OTHER EXPENSE (INCOME),  NET - Other expense (income) increased to $604,000
  from $425,000 in the year-earlier  quarter.  A major factor  contributing to the
  increase was  amortization  of goodwill due to the  acquisitions  during  fiscal
  1998.
  
       INCOME TAXES - The  effective  tax rate for the quarter was 33.0%  compared
  with 35.0% for the prior year.
  
       EBITDA - EBITDA  for the  quarter  decreased  to $9.6  million  from  $12.6
  million  for last  year's  second  quarter  and  represented  7.5% of net  sales
  compared with 10.3% of net sales for the same period of last year.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
   for the three and six month periods ended November 1, 1998 and November 2, 1997
  
  BALANCE SHEET COMMENTS
  
       WORKING CAPITAL - Accounts receivable decreased 1.8% from November 2, 1997,
  while sales  increased  4.3% for the second  quarter.  Day's  sales  outstanding
  represented 52 days,  down from 55 days at November 2, 1997, and up from 49 days
  at May 3,  1998.  Additionally,  the  aging of  accounts  receivable  was 94.9 %
  current  and less  than 30 days  past due  versus  97.8% at  November  2,  1997.
  Inventories  increased 3.1 % from November 2, 1997, and inventory turns were 5.7
  versus 6.1 for last year's second quarter.  The inventory increase is due to the
  acquisition of Artee  Industries,  partially  offset by a decrease in upholstery
  fabric inventories. Operating working capital (comprised of accounts receivable,
  inventory and accounts payable) increased to $112.7 million at November 1, 1998,
  for the reasons  mentioned  above,  from $107.8 million at November 2, 1997. The
  balance at May 3, 1998 was $115.2 million.
  
       PROPERTY,   PLANT  AND  EQUIPMENT  -  For  fiscal  1999,  the  company  has
  significantly  reduced  its  planned  capital  spending  to  $10-$15  million as
  compared  with $35.9 million  spent in fiscal 1998.  Culp is focused  instead on
  improving  the results of the  investments  made  during  fiscal 1997 and fiscal
  1998. The two largest projects that are currently  underway for fiscal 1999 are:
  (a) completion of the  polypropylene  yarn extrusion  expansion,  which began in
  early  fiscal  1998;  and (b)  building  expansions  in the Culp  Home  Fashions
  business  unit to  accommodate  the  continuing  growth  that is expected in the
  company's sales of mattress  ticking.  Depreciation for fiscal 1999 is currently
  estimated to be approximately $19 million.
  
       LONG-TERM DEBT - The company's  funded  debt-to-capital  ratio was 53.5% at
  November 1, 1998, up from 52.8% at November 2, 1997,  and even with 53.5% at May
  3, 1998.  Funded debt was $148.5  million at  November  1, 1998,  up from $131.8
  million at November 2, 1997 and down from $151.6 million at May 3, 1998. (Funded
  debt equals  long-term  debt,  including  current  maturities,  less  restricted
  investments,  which  represent  unspent IRB funds).  The decrease in funded debt
  from  May 3,  1998  resulted  primarily  from an  operating  cash  flow of $11.7
  million,  offset by capital  expenditures  of $6.4  million  and a  decrease  in
  accounts payable related to capital expenditures of $2.2 million.