content: --------------------------------------------------------------------------------
  
                                    UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                                      ---------
  
                                      Form 8-K
  
                                   CURRENT REPORT
  
                  Pursuant to Section 13 or 15(d) of the Securities
                                Exchange Act of 1934
  
                                    -------------
  
           Date of Report (Date of earliest event reported) June 16, 2004
  
                                     CULP, INC.
  
               (Exact name of registrant as specified in its charter)
  
  
         North Carolina                  0-12781                   56-1001967
  (State or other jurisdiction of   (Commission File No.)        (IRS Employer
         incorporation)                                        Identification No.)
  
  
  
                                101 South Main Street
                          High Point, North Carolina 27260
                      (Address of principal executive offices)
                                   (336) 889-5161
                (Registrant's telephone number, including area code)
  
  
  
  
            (Former name or former address, if changed since last report)
  
  
  
  
  
  --------------------------------------------------------------------------------
  
  <PAGE>
  
                                        INDEX
                                       -------
  
  
                                                                           Page
  Item 7 -  Exhibits                                                         3
  
  Item 12 - Results of Operations and Financial Condition                    3
  
  Signature                                                                  4
  
  Exhibits
  
  
  
  
  
  
  
  
  <PAGE>
  
  
      Item 7 -- Exhibits
  
      99(a)  News Release dated June 16, 2004
  
      99(b)  Financial Information Release dated June 16, 2004
  
      Item 12 -- Results of Operations and Financial Condition
  
       On June 16, 2004, Culp, Inc. (the  "Registrant" or the "company")  issued a
  news release to announce its financial results for the fourth quarter and fiscal
  year ended May 2, 2004. The news release is attached hereto as Exhibit 99(a).
  
       Also on June 16,  2004,  the  Registrant  released a Financial  Information
  Release containing  additional  financial  information and disclosures about the
  Registrant's  fiscal  year May 2, 2004.  The  Financial  Information  Release is
  attached hereto as Exhibit 99(b).
  
  The news release and Financial  Information  Release contain  disclosures  about
  free cash  flow,  a  non-GAAP  performance  measure,  that  management  believes
  provides  useful  information  to investors  because it measures  the  company's
  available  cash  flow  for  potential  debt  repayment,  stock  repurchases  and
  additions to cash, cash equivalents and short-term investments. In addition, the
  news  release  and  Financial   Information   Release  contain  proforma  income
  statements which reconcile the reported income statements with proforma results,
  which exclude restructuring and related charges and credits, expenses related to
  early  extinguishment of debt, and cumulative effect of accounting  change.  The
  company has included  this  proforma  information  in order to show  operational
  performance   excluding  the  effects  of  restructuring  charges  and  credits,
  accounting  rule changes and expenses  related to early debt  repayment that are
  not expected to occur on a regular basis.  Management believes this presentation
  aids in the comparison of financial results among comparable financial periods.
  
  
  Forward  Looking  Information.  This  Report and the  exhibits  attached  hereto
  contain  statements that may be deemed  "forward-looking  statements" within the
  meaning  of the  federal  securities  laws,  including  the  Private  Securities
  Litigation  Reform Act of 1995  (Section 27A  of the  Securities Act of 1933 and
  Section 27A of the  Securities  and Exchange Act of 1934).  Such  statements are
  inherently  subject  to  risks  and  uncertainties.   Further,  forward  looking
  statements  are  intended  to speak  only as of the date on which they are made.
  Forward-looking statements are statements that include projections, expectations
  or beliefs  about future  events or results or otherwise  are not  statements of
  historical  fact.  Such  statements  are often but not always  characterized  by
  qualifying words such as "expect,"  "believe,"  "estimate," "plan" and "project"
  and their  derivatives,  and  include but are not  limited to  statements  about
  expectations for the company's future sales, gross profit margins, SG&A or other
  expenses,  and earnings,  as well as any statements regarding the company's view
  of estimates of the  company's  future  results by analysts.  Factors that could
  influence the matters discussed in such statements  include the level of housing
  starts and sales of existing homes,  consumer  confidence,  trends in disposable
  income, and general economic conditions.  Decreases in these economic indicators
  could have a negative effect on the company's business and prospects.  Likewise,
  increases in interest rates,  particularly home mortgage rates, and increases in
  consumer  debt or the  general  rate of  inflation,  could  affect  the  company
  adversely.  In  addition,  strengthening  of  the U.  S.  dollar  against  other
  currencies  could make the company's  products less  competitive on the basis of
  price in markets  outside  the  United  States.  Also,  economic  and  political
  instability  in  international  areas could affect the  company's  operations or
  sources of goods in those areas, as well as demand for the company's products in
  international  markets.  Finally,  unanticipated  delays  or costs in  executing
  restructuring actions could cause the cumulative effect of restructuring actions
  to fail to meet the objectives set forth by management. Other factors that could
  affect the matters  discussed in forward looking  statements are included in the
  company's periodic reports filed with the Securities and Exchange Commission.
  
  <PAGE>
  
  
  
  
  
  
                                      SIGNATURE
  
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
  
                                              CULP, INC.
                                              (Registrant)
  
  
                                      By:      Franklin N. Saxon
                                               ----------------------------
                                               President and Chief Operating
                                               Officer
  
  
  
  
  
  Dated:  June 16, 2004
  <PAGE>
  
  
                     CULP ANNOUNCES YEAR-END FISCAL 2004 RESULTS
  
  HIGH  POINT,  N.C.  (June 16,  2004) - Culp,  Inc.  (NYSE:  CFI) today  reported
  financial and operating results for the fourth quarter and fiscal year ended May
  2, 2004. The highlights for the quarter and fiscal year include:
  
  o     Gross profit margin of 18.4% for the quarter and 18.3% for the fiscal year
  
  o     Mattress  ticking  sales up 9.4% for the  quarter and nearly  7.0% for the
        fiscal year
  
  o     Debt-to-capital  ratio  reduced to 33.0%,  the lowest level for Culp since
        fiscal 1993
  
  o     Free cash flow of $15.4 million for the fiscal year
  
       For the three months  ended May 2, 2004,  net sales were $85.1  million,  a
  5.8% decrease  compared with $90.4 million a year ago. The company  reported net
  income of $3.7 million,  or $0.32 per diluted  share,  for the fourth quarter of
  fiscal 2004.  The results for the fourth quarter of fiscal 2004 include a credit
  of  $1.0  million,  or  $0.06  per  diluted  share,  related  to  the  company's
  restructuring reserves.  Excluding this amount, net income for the fourth fiscal
  quarter of fiscal 2004 was $0.26 per diluted  share.  The company  reported  net
  income of $3.3 million, or $0.28 per diluted share, including  restructuring and
  related charges for the fourth quarter of fiscal 2003. The financial results for
  the  fourth  quarter  of  fiscal  2003  include  a  total  of  $1.0  million  in
  restructuring  and related  charges  included in cost of sales.  Excluding these
  charges,  net income for the fourth fiscal quarter of 2003 was $3.9 million,  or
  $0.33 per diluted share.  (A  reconciliation  to the net income and earnings per
  share calculations and free cash flow has been set forth on Page 5.)
  
       For the fiscal year ended May 2, 2004,  the company  reported  net sales of
  $318.1 million, a 6.3% decrease compared with $339.6 million for the same period
  a year ago.  Net income for fiscal 2004 was $7.2  million,  or $0.61 per diluted
  share,  compared with a net loss of $24.9  million,  or $2.17 per diluted share,
  including  restructuring charges and the cumulative effect of accounting change,
  for fiscal 2003. Excluding the credit for the company's  restructuring  reserves
  described  above,  and a charge of $1.7 million,  or $0.10 per diluted share, in
  the third fiscal quarter related to the early extinguishment of debt, net income
  for  fiscal  2004 was  $7.6  million,  or $0.65  per  diluted  share.  Excluding
  restructuring  and  related  charges  and the  cumulative  effect of  accounting
  change, net income for fiscal 2003 was $9.0 million, or $0.77 per diluted share.
  
       "As  previously   announced,   our  fourth  quarter  performance   reflects
  lower-than-expected  sales of upholstery fabrics," remarked Robert G. Culp, III,
  chief  executive  officer of Culp,  Inc. "This segment  continues to face demand
  pressure from both the current consumer preference for leather furniture as well
  as competition  from imported  fabrics,  including cut and sewn kits.  Given the
  lower sales volume,  gross profit  margin for this segment  declined to 16.8% in
  the fourth  quarter  compared  with 18.3% in the prior  year  period,  excluding
  restructuring  related  charges.  To enhance our  competitive  position,  we are
  aggressively pursuing offshore sourcing  initiatives,  including the development
  of our China operations.  As a result, we are significantly  increasing sales of
  upholstery fabrics produced outside of the company's U.S. manufacturing plants.
  
       "Our mattress  ticking  business has continued to gain momentum  throughout
  fiscal  2004.  Sales in this  segment  were up 9.4% for the fourth  quarter  and
  nearly 7.0% for the fiscal year,  due to better  industry  demand and  continued
  gains  with  key  customers.  These  gains  reflect  Culp's  design  leadership,
  exceptional  customer  service and low cost  operations.  This  growth  trend is
  particularly meaningful in light of the bedding industry's ongoing transition to
  selling predominantly  one-sided mattresses,  which utilize about one-third less
  fabric.  We expect  that the  mattress  ticking  business  will  account  for an
  increasing percentage of the company's overall sales and profitability in fiscal
  2005.
  
       "Strengthening  our balance  sheet has been an important  focus for Culp in
  fiscal  2004,"  Culp  continued.  "With the $25.0  million  prepayment  on $75.0
  million of outstanding  senior notes in the third fiscal quarter,  our long-term
  debt now  stands  at $50.5  million  compared  with  $76.0  million  a year ago.
  Notably, we have reduced our long-term debt by a total of $86.0 million over the
  past four years. As a result,  our long-term  debt-to-capital  ratio improved to
  33.0% at the end of fiscal  2004,  compared  with 44.4% a year ago. As such,  we
  have  considerably  improved our financial  position and have greater  financial
  flexibility to pursue our strategic initiatives."
  
       Commenting on the business  outlook,  Culp added, "The first quarter of our
  fiscal year,  which includes the summer months,  is typically the slowest period
  for Culp and the  furniture  industry  due in part to scheduled  plant  vacation
  shutdowns.  In  addition,  in fiscal 2005,  our first fiscal  quarter will be 13
  weeks  versus 14 weeks last year.  We are seeing a definite  slowdown  in orders
  reflecting weaker retail activity throughout the furniture industry. Given these
  factors,  we expect our  consolidated  sales for the first  quarter  will show a
  greater year-over-year decline than we experienced this past quarter. We believe
  the  upholstery  fabrics  segment  will  continue to be affected by  competitive
  factors and expect sales in this segment to decline by a greater amount than the
  fourth  quarter  decline of 11.6%.  Sales in our  mattress  ticking  segment are
  expected to approximate sales for the prior year quarter.
  
       Based on these sales  expectations and lower gross profit in the upholstery
  fabrics segment,  and considering the seasonal slowdown and industry conditions,
  we expect to report a net loss of $0.08 to $0.13 per share diluted for the first
  fiscal quarter of 2005. The actual results will depend  primarily upon the level
  of demand  throughout the quarter.  We remain  optimistic that upholstery fabric
  sales  will  start  to pick up in the  fall,  as is  seasonally  typical  in the
  furniture  industry.  However,  if sales  continue  to be under  pressure in the
  upholstery  fabrics  segment,  we are prepared to take the necessary  actions to
  adjust our cost structure and capacity, as we have demonstrated in recent years.
  We believe the continued strength in our mattress ticking business,  our focused
  efforts to develop  offshore  sourcing  initiatives,  and our proven  ability to
  generate free cash flow are  fundamental  competitive  advantages for Culp as we
  enter fiscal 2005."
  
       Culp,  Inc. is one of the world's largest  marketers of upholstery  fabrics
  for furniture  and is a leading  marketer of mattress  ticking for bedding.  The
  Company's  fabrics are used  principally in the  production of  residential  and
  commercial furniture and bedding products.
  
       This  release  contains  statements  that  may be  deemed  "forward-looking
  statements"  within the meaning of the federal  securities  laws,  including the
  Private Securities  Litigation Reform Act of 1995 (Section 27A of the Securities
  Act of 1933 and Section 27A of the  Securities  and Exchange Act of 1934).  Such
  statements  are  inherently  subject  to  risks  and   uncertainties.   Further,
  forward-looking  statements  are  intended to speak only as of the date on which
  they  are  made.   Forward-looking   statements  are  statements   that  include
  projections, expectations or beliefs about future events or results or otherwise
  are not statements of historical  fact. Such statements are often but not always
  characterized  by  qualifying  words such as  "expect,"  "believe,"  "estimate,"
  "plan" and "project" and their  derivatives,  and include but are not limited to
  statements  about  expectations  for the company's  future  sales,  gross profit
  margins,  SG&A or  other  expenses,  and  earnings,  as  well as any  statements
  regarding the company's  view of estimates of the  company's  future  results by
  analysts.  Factors that could influence the matters discussed in such statements
  include  the level of  housing  starts  and sales of  existing  homes,  consumer
  confidence,  trends in  disposable  income,  and  general  economic  conditions.
  Decreases  in these  economic  indicators  could have a  negative  effect on the
  company's  business  and  prospects.  Likewise,  increases  in  interest  rates,
  particularly  home mortgage rates, and increases in consumer debt or the general
  rate  of   inflation,   could  affect  the  company   adversely.   In  addition,
  strengthening  of the U. S.  dollar  against  other  currencies  could  make the
  company's products less competitive on the basis of price in markets outside the
  United States.  Also, economic and political  instability in international areas
  could affect the  company's  operations  or sources of goods in those areas,  as
  well as demand for the company's  products in  international  markets.  Finally,
  unanticipated delays or costs in executing restructuring actions could cause the
  cumulative  effect of  restructuring  actions to fail to meet the objectives set
  forth by  management.  Other factors that could affect the matters  discussed in
  forward-looking  statements are included in the company's periodic reports filed
  with the Securities and Exchange Commission.
  
  
  <PAGE>
  
                                     CULP, INC.
                           Condensed Financial Highlights
                                     (Unaudited)
  
                                                          Three Months Ended
                                                       ------------------------
                                                         May 2,       April 27,
                                                          2004          2003
                                                       ------------ -------------
  Net sales                                           $ 85,148,000   $ 90,406,000
                                                       ============ =============
  Net income                                          $  3,733,000   $  3,272,000
  Net income per share:
     Basic                                            $       0.32   $       0.28
     Diluted                                          $       0.32   $       0.28
  Net income per share, diluted, excluding
    restructuring and related charges and credits
    and early extinguishment of debt*                 $       0.26   $       0.33
  Average shares outstanding:
     Basic                                              11,531,000     11,496,000
     Diluted                                            11,815,000     11,616,000
  
  
                                                           Fiscal Year Ended
                                                       --------------------------
                                                         May 2,       April 27,
                                                          2004          2003
                                                       ------------ -------------
  Net sales                                           $318,116,000   $339,646,000
                                                       ============ =============
  Income (loss) before cumulative effect of
     accounting change                                $  7,220,000   $   (736,000)
  Cumulative effect of accounting change, net of
     income taxes                                              --     (24,151,000)
                                                       ------------ --------------
  Net income (loss)                                   $  7,220,000   $(24,887,000)
                                                       ============ ==============
  
  Basic income (loss) per share:
    Income (loss) before cumulative effect of
       accounting change                              $       0.63   $      (0.06)
    Cumulative effect of accounting change                    0.00          (2.11)
                                                       ------------ --------------
    Net income (loss)                                 $       0.63   $      (2.17)
                                                       ============ ==============
  
  Diluted income (loss) per share:
    Income (loss) before cumulative effect of
       accounting change                              $       0.61   $      (0.06)
    Cumulative effect of accounting change                    0.00          (2.11)
                                                       ------------ --------------
    Net income (loss)                                 $       0.61   $      (2.17)
                                                       ============ ==============
  
  Net income per share, diluted, excluding restructuring
    and related charges and credits, early
    extinguishment of debt and cumulative effect
    of accounting change**                            $       0.65   $       0.77
  
  Average shares outstanding:
    Basic                                               11,525,000     11,462,000
    Diluted                                             11,777,000     11,462,000
  
     * Excludes credit for restructuring  reserves of $1.0 million  ($701,000,  or
       $0.06 per  diluted  share,  after  taxes) for the fourth  quarter of fiscal
       2004. Excludes restructuring and related charges of $1.0 million ($601,000,
       or $0.05 per diluted  share,  after taxes) for the fourth quarter of fiscal
       2003.
  
    ** Excludes credit for restructuring  reserves of $1.0  million ($701,000,  or
       $0.06 per diluted share, after taxes) for fiscal 2004.  Excludes charge for
       early  extinguishment  of debt of $1.7 million ($1.1 million,  or $0.10 per
       diluted share, after taxes) for fiscal 2004.  Excludes cumulative effect of
       accounting  change,  net of  income  taxes,  of $24.2  million  ($2.11  per
       diluted share) for fiscal 2003. Excludes  restructuring and related charges
       of $15.9 million ($9.7 million,  or $0.85 per diluted  share,  after taxes)
       for fiscal 2003.
  <PAGE>
  
  
                                     CULP, INC.
       Reconciliation of Net Income (Loss) as Reported to Pro Forma Net Income
                                     (Unaudited)
  <TABLE>
  <CAPTION>
  
                                                Three Months Ended          Fiscal Year Ended
                                            -------------------------   --------------------------
                                               May 2,       April 27,      May 2,        April 27,
                                               2004          2003           2004           2003
                                            ------------ ------------    ------------ -------------
  <S>                                       <C>          <C>             <C>          <C>
  Net income (loss), as reported            $  3,733,000 $  3,272,000    $ 7,220,000  $(24,887,000)
  Cumulative effect of
    accounting change, net of
    income taxes                                     --            --             --    24,151,000
  Restructuring and related charges
    (credits), net of income taxes              (701,000)     601,000       (701,000)    9,714,000
  Early extinguishment of debt,
    net of income taxes                              --            --      1,120,000            --
                                            ------------ ------------    ------------ -------------
  Pro forma net income                       $ 3,032,000 $  3,873,000    $ 7,639,000   $ 8,978,000
                                            ============ ============    ============ =============
  
  
              Reconciliation of Net Income (Loss) Per Share as Reported
                          to Pro Forma Net Income Per Share
                                     (Unaudited)
  
  Diluted net income (loss) per
    share                                    $      0.32  $      0.28    $      0.61   $     (2.17)
  Cumulative effect of
    accounting change, net of
    income taxes                                      --           --             --          2.11
  Restructuring and related charges
    (credits), net of income taxes                 (0.06)        0.05          (0.06)         0.85
  Early extinguishment of debt,
    net of income taxes                               --           --           0.10            --
  Effect of dilutive stock options                    --           --           0.00         (0.02)
                                            ------------ ------------    ------------ -------------
  Diluted net income
    per share, adjusted                      $      0.26  $      0.33    $      0.65   $      0.77
                                            ============ ============    ============ =============
  </TABLE>
  
  
            Reconciliation of Cash Flow from Operations to Free Cash Flow
                                     (Unaudited)
  
                                                           Fiscal Year Ended
                                                      -------------------------
                                                         May 2,       April 27,
                                                          2004          2003
                                                      ------------ ------------
  Cash flow from operations                           $25,352,000  $31,129,000
  Capital expenditures                                 (5,976,000)  (6,830,000)
  Change in accounts payable-capital expenditures      (3,932,000)  (1,294,000)
                                                      ------------ ------------
  
  Free cash flow                                      $15,444,000  $23,005,000
                                                      ============ ============
  
  <PAGE>
  Exhibit 99(b)
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                      CONSOLIDATED STATEMENTS OF INCOME (LOSS)
     FOR THE THREE MONTHS AND TWELVE MONTHS ENDED MAY 2, 2004 AND APRIL 27, 2003
  
                  (Amounts in Thousands, Except for Per Share Data)
  <TABLE>
  <CAPTION>
  
                                                                                        THREE MONTHS ENDED (UNAUDITED)
                                                       -------------------------------------------------------------------------------
  
                                                                  Amounts                                           Percent of Sales
                                                       ---------------------------                      ------------------------------
                                                          May 2,      April 27,          % Over         May 2,           April 27,
                                                           2004         2003            (Under)          2004             2003
                                                       -------------  ------------   ---------------    -------------   --------------
  
  <S>                                              <C>                   <C>             <C>             <C>               <C>
  Net sales                                        $         85,148        90,406          (5.8)%          100.0 %           100.0 %
  Cost of sales                                              69,510        74,218          (6.3)%           81.6 %            82.1 %
                                                       -------------  ------------   --------------    --------------   --------------
       Gross profit                                          15,638        16,188          (3.4)%           18.4 %            17.9 %
  
  Selling, general and
    administrative expenses                                   9,925        10,324          (3.9)%           11.7 %            11.4 %
  Restructuring credit                                       (1,047)          (25)          N/A             (1.2)%            (0.0)%
                                                       -------------  ------------   --------------    --------------   --------------
       Income  from operations                                6,760         5,889          14.8 %            7.9 %             6.5 %
  
  Interest expense                                              988         1,392         (29.0)%            1.2 %             1.5 %
  Interest income                                               (20)         (182)        (89.0)%           (0.0)%            (0.2)%
  Other expense                                                 220           160          37.5 %            0.3 %             0.2 %
                                                       -------------  ------------   --------------    --------------   --------------
       Income before income taxes                             5,572         4,519          23.3 %            6.5 %             5.0 %
  
  Income taxes*                                               1,839         1,247          47.5 %           33.0 %            27.6 %
                                                       -------------  ------------   --------------    --------------   --------------
  
       Net income                                  $          3,733         3,272          14.1 %            4.4 %             3.6 %
                                                       =============  ============   ==============    ==============   ==============
  
  Net income  per share-basic                                 $0.32         $0.28          14.3 %
  Net income per share-diluted                                $0.32         $0.28          14.3 %
  Net income per share, diluted,
    excluding restructuring and related                       $0.26         $0.33         (21.2)%
    charges (see proforma statement on page 6)
  Average shares outstanding-basic                           11,531        11,496           0.3 %
  Average shares outstanding-diluted                         11,815        11,616           1.7 %
  
  
  
                                                                                     TWELVE MONTHS ENDED (UNAUDITED)
                                                       -----------------------------------------------------------------------------
  
                                                                  Amounts                                         Percent of Sales
                                                       ---------------------------                      ------------------------------
                                                          May 2,      April 27,          % Over           May 2,            April 27,
                                                           2004         2003            (Under)            2004               2003
                                                       -------------  ------------   ---------------    --------------   -------------
  
  Net sales                                        $        318,116       339,646         (6.3) %           100.0 %           100.0 %
  Cost of sales                                             259,794       282,073         (7.9) %            81.7 %            83.0 %
                                                       -------------  ------------   ----------- ---    --------------   -------------
       Gross profit                                          58,322        57,573          1.3  %            18.3 %            17.0 %
  
  Selling, general and
    administrative expenses                                  41,019        40,040          2.4  %            12.9 %            11.8 %
  Restructuring (credit) expense                             (1,047)       12,981       (108.1) %            (0.3)%             3.8 %
                                                       -------------  ------------   ----------- ---    --------------   -------------
       Income from operations                                18,350         4,552        303.1  %             5.8 %             1.3 %
  
  Interest expense                                            5,528         6,636        (16.7) %             1.7 %             2.0 %
  Interest income                                              (376)         (596)       (36.9) %            (0.1)%            (0.2)%
  Early extinguishment of debt                                1,672             0        100.0  %             0.5 %             0.0 %
  Other expense                                                 750           805         (6.8) %             0.2 %             0.2 %
                                                       -------------  ------------   ----------- ---    --------------   -------------
       Income (loss) before income taxes                     10,776        (2,293)       570.0  %             3.4 %            (0.7)%
  
  Income taxes*                                               3,556        (1,557)       328.4  %            33.0 %            67.9 %
                                                       -------------  ------------   ----------- ---    --------------   -------------
  Income (loss) before cumulative effect of
     accounting change                                        7,220          (736)     1,081.0  %             2.3 %            (0.2)%
  
                                                                                                        =============      ===========
  <PAGE>
  
  Cumulative effect of accounting change, net of
     income taxes                                                 0       (24,151)
                                                       -------------  ------------
  
       Net income (loss)                           $          7,220       (24,887)
                                                       =============  ============
  
  Basic income (loss) per share:
       Income (loss) before cumulative effect of
         accounting change                         $           0.63         (0.06)       1,075.6  %
       Cumulative effect of accounting change                  0.00         (2.11)         100.0  %
                                                       -------------  ------------   -----------
       Net income (loss)                           $           0.63         (2.17)         128.9  %
                                                       =============  ============   ===========
  
  Diluted income (loss) per share:
       Income (loss) before cumulative effect of
         accounting change                         $           0.61         (0.06)       1,054.7  %
       Cumulative effect of accounting change                  0.00         (2.11)         100.0  %
                                                       -------------  ------------   -----------
       Net income (loss)                           $           0.61         (2.17)         128.2  %
                                                       =============  ============   ===========
  
  Net income per share, diluted, excluding
    restructuring and related charges and credits,            $0.65         $0.77         (15.6) %
    early extinguishment of debt and cumulative
    effect of accounting change (see proforma
    statement on page 7)
  Average shares outstanding-basic                           11,525        11,462           0.5  %
  Average shares outstanding-diluted                         11,777        11,462           2.7  %
  
   *   Percent of sales column for income taxes is calculated as a % of income (loss) before income taxes.
  </TABLE>
  
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                             CONSOLIDATED BALANCE SHEETS
                           MAY 2, 2004 AND APRIL 27, 2003
                                     (unaudited)
                               (Amounts in Thousands)
  <TABLE>
  <CAPTION>
  
                                                               Amounts                        Increase
                                                 ------------------------------------        (Decrease)
                                                   May 2, 2004      April 27, 2003    --------------------------
                                                      2004               2003           Dollars     Percent
                                                 ----------------  ------------------  ----------  --------------
  <S>                                          <C>                          <C>         <C>         <C>
  Current assets
     Cash and cash equivalents                 $          14,568              14,355         213         1.5 %
     Short-term investments                                    0              10,043     (10,043)     (100.0)%
     Accounts receivable                                  30,719              32,259      (1,540)       (4.8)%
     Inventories                                          49,045              49,552        (507)       (1.0)%
     Deferred income taxes                                 9,256              12,303      (3,047)      (24.8)%
     Other current assets                                  1,634               3,204      (1,570)      (49.0)%
                                                 ----------------  ------------------  ----------  --------------
                   Total current assets                  105,222             121,716     (16,494)      (13.6)%
  
  Property, plant & equipment, net                        77,770              84,962      (7,192)       (8.5)%
  Goodwill                                                 9,240               9,240           0         0.0 %
  Other assets                                             1,496               2,235        (739)      (33.1)%
                                                 ----------------  ------------------  ----------  --------------
  
                   Total assets                $         193,728             218,153     (24,425)      (11.2)%
                                                 ================  ==================  ==========  ==============
  
  
  
  Current liabilities
     Current maturities of long-term debt      $             528                 500          28         5.6 %
     Accounts payable                                     15,323              19,874      (4,551)      (22.9)%
     Accrued expenses                                     13,028              14,071      (1,043)       (7.4)%
     Accrued restructuring                                 4,968               7,743      (2,775)      (35.8)%
     Income taxes payable                                  1,850                 349       1,501       100.0 %
                                                 ----------------  ------------------  ----------  ----------
                   Total current liabilities              35,697              42,537      (6,840)      (16.1)%
  
  Long-term debt                                          50,502              76,000     (25,498)      (33.6)%
  
  Deferred income taxes                                    4,138               3,851         287         7.5 %
                                                 ----------------  ------------------  ----------  --------------
                   Total liabilities                      90,337             122,388     (32,051)      (26.2)%
  
  Shareholders' equity                                   103,391              95,765       7,626         8.0 %
                                                 ----------------  ------------------  ----------  --------------
  
                   Total liabilities and
                   shareholders' equity        $         193,728             218,153     (24,425)      (11.2)%
                                                 ================  ==================  ==========  ==============
  
  Shares outstanding                                      11,547              11,515          32         0.3 %
                                                 ================  ==================  ==========  ==============
  </TABLE>
  
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE TWELVE MONTHS ENDED MAY 2, 2004 AND APRIL 27, 2003
                                    (unaudited)
  
                               (Amounts in Thousands)
  <TABLE>
  <CAPTION>
                                                                             TWELVE MONTHS ENDED
                                                                          --------------------------
                                                                                   Amounts
                                                                          --------------------------
                                                                            May 2,       April 27,
                                                                             2004          2003
                                                                          ------------  ------------
  <S>                                                                  <C>               <C>
  Cash flows from operating activities:
       Net income (loss)                                               $        7,220      (24,887)
       Adjustments to reconcile net income (loss) to net cash
          provided by operating activities:
             Cumulative effect of accounting change, net of income taxes            0        24,151
             Depreciation                                                      13,642        13,990
             Amortization of other assets                                         173           457
             Stock-based compensation                                             210           210
             Provision for deferred income taxes                                3,334        (2,507)
             Restructuring (credit) expense                                    (1,047)       12,981
             Changes in assets and liabilities:
                Accounts receivable                                             1,540        11,107
                Inventories                                                       507         8,347
                Other current assets                                            1,570           763
                Other assets                                                      607           366
                Accounts payable                                                 (951)       (8,558)
                Accrued expenses                                               (1,043)       (2,126)
                Accrued restructuring                                          (1,911)       (3,514)
                Income taxes payable                                            1,501           349
                                                                          ------------  ------------
                   Net cash provided by operating activities                   25,352        31,129
                                                                          ------------  ------------
  
  Cash flows from investing activities:
       Capital expenditures                                                    (5,976)       (6,830)
       Purchases of short-term investments                                          0       (10,043)
       Proceeds from the sale of short-term investments                        10,043             0
                                                                          ------------  ------------
                   Net cash provided by (used in) investing activities          4,067       (16,873)
                                                                          ------------  ------------
  
  Cash flows from financing activities:
       Payments on vendor-financed capital expenditures                        (3,932)       (1,294)
       Principal payments of long-term debt                                   (25,470)      (31,984)
       Proceeds from common stock issued                                          196         1,384
                                                                          ------------  ------------
                   Net cash used in financing activities                      (29,206)      (31,894)
                                                                          ------------  ------------
  
  Increase (decrease) in cash and cash equivalents                                213       (17,638)
  
  Cash and cash equivalents at beginning of year                               14,355        31,993
                                                                          ------------  ------------
  
  Cash and cash equivalents at end of year                             $       14,568        14,355
                                                                          ============  ============
  
  
  Free Cash Flow  (1)                                                  $       15,444        23,005
                                                                          ============  ============
  
  
  --------------------------------------------------------------------------------------------------
  (1)  Free Cash Flow reconciliation is as follows:
                                                                              FY 2004      FY 2003
                                                                          ------------  ------------
  A)   Net cash provided by operating activities                               25,352        31,129
  B)   Minus:  Capital Expenditures                                            (5,976)       (6,830)
  C)   Minus:  Payments on vendor-financed capital expenditures                (3,932)       (1,294)
                                                                          ------------  ------------
                                                                               15,444        23,005
                                                                          ============  ============
  --------------------------------------------------------------------------------------------------
  </TABLE>
  
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL ANALYSIS
                                     MAY 2, 2004
  <TABLE>
  <CAPTION>
  
  
                                            FISCAL 03                                                FISCAL 04
                                         --------------      ------------------------------------------------------------------------
                                               Q4                        Q1                 Q2                 Q3               Q4
                                         --------------      ------------------------------------------------------------------------
  <S>                                        <C>                    <C>                <C>                <C>              <C>
  INVENTORIES
     Inventory turns                               5.7                    5.0                5.1                4.7              5.5
  
  RECEIVABLES
     Days sales in receivables                      33                     32                 34                 31               33
  
  WORKING CAPITAL
     Current ratio                                 2.9                    3.1                2.9                2.6              2.9
     Operating working capital turnover (1)        5.0                    5.1                5.3                5.3              5.2
     Operating working capital (1)             $61,937                $54,854            $61,262            $62,492          $64,439
  
  PROPERTY, PLANT & EQUIPMENT
     Depreciation rate                            6.3%                   6.2%               6.3%               6.2%             6.1%
     Percent property, plant &
       equipment are depreciated                 61.3%                  62.3%              62.9%              64.0%            64.4%
     Capital expenditures                      $12,229 (2)             $1,781             $1,360             $1,101           $1,734
  
  LEVERAGE
     Total liabilities/equity                   127.8%                 124.7%             128.0%              94.9%            87.4%
     Long-term debt/equity                       79.9%                  80.3%              77.7%              51.3%            49.4%
     Long-term debt/capital employed (3)         44.4%                  44.5%              43.7%              33.9%            33.0%
     Long-term debt                            $76,500                $76,551            $76,616            $51,063          $51,030
  
  OTHER
     Book value per share                        $8.33                  $8.28              $8.55              $8.63            $8.95
     Employees at quarter end                    2,463                  2,383              2,373              2,350            2,319
     Sales per employee (annualized)          $144,421               $121,628           $139,161           $129,682         $145,895
     Capital employed (3)                     $172,265               $171,891           $175,221           $150,530         $154,421
  
    (1) Working capital for this calculation is accounts receivable, inventories and accounts payable
    (2) Expenditures for entire year
    (3) Capital employed represents long-term debt plus stockholders equity; Long-term debt is long-term debt plus current
        maturities of long-term debt.
  </TABLE>
  <PAGE>
                     CULP, INC. FINANCIAL INFORMATION RELEASE
                      SALES / GROSS PROFIT BY SEGMENT/DIVISION
        FOR THE THREE AND TWELVE MONTHS ENDED MAY 2, 2004 AND APRIL 27, 2003
  
                               (Amounts in thousands)
  <TABLE>
  <CAPTION>
  
                                                                            THREE MONTHS ENDED (UNAUDITED)
                                                        ------------------------------------------------------------------------
                                                              Amounts                              Percent of Total Sales
                                                        --------------------                  --------------------------------
                                                        May 2,     April 27,     % Over        May 2,            April 27,
  Segment/Division Sales (1)                             2004        2003        (Under)        2004               2003
  -------------------------------------------------     --------   ---------   -----------   -------------    ---------------
  <S>                                               <C>             <C>        <C>               <C>                <C>
  Upholstery Fabrics
      Culp Decorative Fabrics                       $    31,511      37,006     (14.8) %          37.0 %             40.9 %
      Culp Velvets/Prints                                25,429      26,772      (5.0) %          29.9 %             29.6 %
      Culp Yarn                                           1,008       1,757     (42.6) %           1.2 %              1.9 %
                                                        --------   ---------   -----------   -------------    ---------------
                                                         57,948      65,535     (11.6) %          68.1 %             72.5 %
  Mattress Ticking
       Culp Home Fashions                                27,200      24,871       9.4  %          31.9 %             27.5 %
                                                        --------   ---------   -----------   -------------    ---------------
  
                                                    $    85,148      90,406      (5.8) %         100.0 %            100.0 %
                                                        ========   =========   ===========   =============    ===============
  
  
  Segment Gross Profit                                                                              Gross Profit Margin
  -------------------------------------------------                                          --------------------------------
  
  Upholstery Fabrics                                $     9,755      10,999     (11.3) %          16.8 %             16.8 %
  Restructuring related charges                               0       1,008    (100.0) %           0.0 %              1.5 %
                                                        --------   ---------   -----------   -------------    ---------------
  Pro forma Upholstery Fabrics gross profit (2)           9,755      12,007     (18.8) %          16.8 %             18.3 %
  
  Mattress Ticking                                        5,883       5,189      13.4  %          21.6 %             20.9 %
                                                        --------   ---------   -----------   -------------    ---------------
  
  Pro forma gross profit                            $    15,638      17,196      (9.1) %          18.4 %             19.0 %
                                                        ========   =========   ===========   =============    ===============
  
  
                                                                            TWELVE MONTHS ENDED (UNAUDITED)
                                                        ------------------------------------------------------------------------
                                                              Amounts                              Percent of Total Sales
                                                        --------------------                  --------------------------------
                                                        May 2,     April 27,     % Over        May 2,            April 27,
  Segment/Division Sales (1)                             2004        2003        (Under)        2004                2003
  -------------------------------------------------     --------   ---------   -----------   -------------    ---------------
  Upholstery Fabrics
      Culp Decorative Fabrics                       $   119,514     137,479     (13.1) %          37.6 %             40.5 %
      Culp Velvets/Prints                                87,522      96,049      (8.9) %          27.5 %             28.3 %
      Culp Yarn                                           4,758       6,459     (26.3) %           1.5 %              1.9 %
                                                        --------   ---------   -----------   -------------    ---------------
                                                        211,794     239,987     (11.7) %          66.6 %             70.7 %
  Mattress Ticking
       Culp Home Fashions                               106,322      99,659       6.7  %          33.4 %             29.3 %
                                                        --------   ---------   -----------   -------------    ---------------
  
                                                    $   318,116     339,646      (6.3) %         100.0 %            100.0 %
                                                        ========   =========   ===========   =============    ===============
  
  
  Segment Gross Profit                                                                              Gross Profit Margin
  -------------------------------------------------                                          --------------------------------
  
  Upholstery Fabrics                                $    34,946      34,737       0.6  %          16.5 %             14.5 %
  Restructuring related charges                               0       2,918    (100.0) %           0.0 %              1.2 %
                                                        --------   ---------   -----------   -------------    ---------------
  Pro forma Upholstery Fabrics gross profit (2)          34,946      37,655      (7.2) %          16.5 %             15.7 %
  
  Mattress Ticking                                       23,376      22,836       2.4  %          22.0 %             22.9 %
                                                        --------   ---------   -----------   -------------    ---------------
  
  Pro forma gross profit                            $    58,322      60,491      (3.6) %          18.3 %             17.8 %
                                                        ========   =========   ===========   =============    ===============
  
  (1)  International Sales and portion of total sales is: Q4 - $9.3 million FY04 (11.0%) & $10.1 million FY03 (11.2%);
       YTD - $35.4 million FY04 (11.1%) & $39.9 million FY03 (11.8%)
  (2)  Pro forma includes $1.0 and $2.9 million of restructuring related charges from the shut down of the Chattanooga operation
       for the three and twelve month period of fiscal 2003, respectively.
  
  </TABLE>
  <PAGE>
                                     CULP, INC.
                     PROFORMA CONSOLIDATED STATEMENTS OF INCOME
              FOR THE THREE MONTHS ENDED MAY 2, 2004 AND APRIL 27, 2003
                  (Amounts in Thousands, Except for Per Share Data)
  <TABLE>
  <CAPTION>
                                                                               THREE MONTHS ENDED
                                              -------------------------------------------------------------------
                                              As Reported                                 May 2, 2004
                                                 May 2,    % of                 % of      Proforma Net  % of
                                                  2004      Sales   Adjustments Sales    of Adjustments  Sales
                                              ----------- --------   --------  -------     ---------   --------
  <S>                                      <C>             <C>        <C>      <C>        <C>          <C>
  Net sales                                $      85,148   100.0%          0                 85,148     100.0%
  Cost of sales                                   69,510    81.6%          0     0.0%        69,510      81.6%
                                              ----------- --------   --------  -------     ---------   --------
              Gross profit                        15,638    18.4%          0     0.0%        15,638      18.4%
  
  Selling, general and
    administrative expenses                        9,925    11.7%          0     0.0%         9,925      11.7%
  Restructuring credit                            (1,047)   -1.2%      1,047     1.2%  (2)        0       0.0%
                                              ----------- --------   --------  -------     ---------   --------
              Income  from operations              6,760     7.9%      1,047     1.2%         5,713       6.7%
  
  Interest expense                                   988     1.2%          0     0.0%           988       1.2%
  Interest income                                    (20)    0.0%          0     0.0%           (20)      0.0%
  Other expense                                      220     0.3%          0     0.0%           220       0.3%
                                              ----------- --------   --------  -------     ---------   --------
              Income before income taxes           5,572     6.5%      1,047     1.2%         4,525       5.3%
  
  Income taxes  (1)                                1,839    33.0%        346    33.0%         1,493      33.0%
                                              ----------- --------   --------  -------     ---------   --------
  Net income (loss)                        $       3,733     4.4%        701     0.8%         3,032       3.6%
                                              =========== ========   ========  =======     =========   ========
  
  Net income (loss) per share-basic                $0.32               $0.06                  $0.26
  Net income (loss) per share-diluted              $0.32               $0.06                  $0.26
  Average shares outstanding-basic                11,531              11,531                 11,531
  Average shares outstanding-diluted              11,815              11,815                 11,815
  
  </TABLE>
                                    CULP, INC.
                     PROFORMA CONSOLIDATED STATEMENTS OF INCOME
              FOR THE THREE MONTHS ENDED MAY 2, 2004 AND APRIL 27, 2003
                  (Amounts in Thousands, Except for Per Share Data)
  <TABLE>
  <CAPTION>
                                                                        THREE MONTHS ENDED
                                              -------------------------------------------------------------------------------------
                                               As Reported                                     April 27, 2003              Proforma
                                                April 27,    % of                  % of         Proforma Net    % of         % Over
                                                  2003       Sales   Adjustments   Sales       of Adjustments  Sales        (Under)
                                              ------------ -------- ------------- ------      --------------- -------      ---------
   <S>                                      <C>              <C>        <C>      <C>             <C>         <C>            <C>
  Net sales                                $       90,406   100.0%           0                      90,406   100.0%          -5.8%
  Cost of sales                                    74,218    82.1%      (1,008)  -1.1%  (3)         73,210    81.0%          -5.1%
                                              ------------ --------- ------------ ------      --------------- -------      ---------
              Gross profit                         16,188    17.9%      (1,008)  -1.1%              17,196    19.0%          -9.1%
  
  Selling, general and
    administrative expenses                        10,324    11.4%           0    0.0%              10,324    11.4%          -3.9%
  Restructuring credit                                (25)    0.0%          25    0.0%  (4)              0     0.0%           0.0%
                                              ------------ ---------- ----------- ------      --------------- -------      ---------
              Income  from operations               5,889     6.5%        (983)  -1.1%               6,872     7.6%         -16.9%
  
  Interest expense                                  1,392     1.5%           0    0.0%               1,392     1.5%         -29.0%
  Interest income                                    (182)   -0.2%           0    0.0%                (182)   -0.2%         -89.0%
  Other expense                                       160     0.2%           0    0.0%                 160     0.2%          37.5%
                                              ------------ ---------- ----------- ------      --------------- -------      ---------
              Income before income taxes            4,519     5.0%        (983)  -1.1%               5,502     6.1%         -17.8%
  
  Income taxes  (1)                                 1,247    27.6%        (382)  38.9%               1,629    29.6%          -8.3%
                                              ------------ ---------- ----------- ------      --------------- -------      ---------
  Net income (loss)                        $        3,272     3.6%        (601)  -0.7%               3,873     4.3%         -21.7%
                                              ============ ========== =========== ======      =============== =======      =========
  
  Net income (loss) per share-basic                 $0.28               ($0.05)                      $0.34
  Net income (loss) per share-diluted               $0.28               ($0.05)                      $0.33
  Average shares outstanding-basic                 11,496               11,496                      11,496
  Average shares outstanding-diluted               11,616               11,496                      11,616
  
  Notes:
   (1)  The percent of net sales column for income taxes is calculated as a % of income (loss) before income taxes.
   (2)  The $1.0 million restructuring credit represents adjustment of accrued employee benefit and other plant closing costs related
        to the shutdown of the Chattanooga and Lumberton operations.
   (3)  The $1.0 million represents restructuring related charges for inventory markdowns and movement of equipment related to the
        Chattanooga plant closing.
   (4)  The net $25,000 credit represents the sale of manufacturing equipment that was previously written off to restructuring due
        to the Chattanooga plant closing.
  </TABLE>
  <PAGE>
  
                                     CULP, INC.
                  PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
             FOR THE TWELVE MONTHS ENDED MAY 2, 2004 AND APRIL 27, 2003
                  (Amounts in Thousands, Except for Per Share Data)
  <TABLE>
  <CAPTION>
  
                                                                                    TWELVE MONTHS ENDED (UNAUDITED)
                                                             -------------------------------------------------------------------------
                                                             As Reported                                       May 2, 2004
                                                                May 2,      % of                     % of     Proforma Net    % of
                                                                 2004       Sales     Adjustments   Sales    of Adjustments   Sales
                                                             ------------- --------   ---------- -------     -------------- --------
  <S>                                                     <C>               <C>         <C>       <C>            <C>        <C>
  Net sales                                               $       318,116   100.0%           0                     318,116   100.0%
  Cost of sales                                                   259,794    81.7%           0     0.0%            259,794    81.7%
                                                             ------------- --------   ---------- -------     -------------- --------
              Gross profit                                         58,322    18.3%           0     0.0%             58,322    18.3%
  
  Selling, general and
    administrative expenses                                        41,019    12.9%           0     0.0%             41,019    12.9%
  Restructuring credit                                             (1,047)   -0.3%       1,047     0.3%  (2)             0     0.0%
                                                             ------------- --------   ---------- -------     -------------- --------
              Income  (loss) from operations                       18,350     5.8%       1,047     0.3%             17,303     5.4%
  
  Interest expense                                                  5,528     1.7%           0     0.0%              5,528     1.7%
  Interest income                                                    (376)   -0.1%           0     0.0%               (376)   -0.1%
  Early extinguishment of debt                                      1,672     0.5%      (1,672)    0.0%  (3)             0     0.0%
  Other expense                                                       750     0.2%           0     0.0%                750     0.2%
                                                             ------------- --------   ---------- -------     -------------- --------
              Income (loss) before income taxes                    10,776     3.4%        (625)   -0.2%             11,401     3.6%
  
  Income taxes  (1)                                                 3,556    33.0%        (206)   33.0%              3,762    33.0%
                                                             ------------- --------   ---------- -------     -------------- --------
  Income (loss) before cumulative effect of
    accounting change                                               7,220     2.3%        (419)   -0.1%              7,639     2.4%
                                                             ------------- --------   ========== =======     ============== ========
  
  Cumulative effect of accounting change,
     net of income taxes                                                0                                                0
                                                             -------------            ----------             --------------
  
              Net income (loss)                          $          7,220                 (419)                      7,639
                                                             =============            ==========             ==============
  
  Basic income (loss) per share:
              Income (loss) before cumulative effect
                of accounting change                     $           0.63                (0.04)                       0.66
              Cumulative effect of accounting change                 0.00                 0.00                        0.00
                                                             -------------            ----------             --------------
  
              Net income (loss)                                      0.63                (0.04)                       0.66
                                                             =============            ==========             ==============
  
  Diluted income (loss) per share:
              Income (loss) before cumulative effect
              of accounting change                       $           0.61                (0.04)                       0.65
              Cumulative effect of accounting change                 0.00                 0.00                        0.00
                                                             -------------            ----------             --------------
              Net income (loss)                                      0.61                (0.04)                       0.65
                                                             =============            ==========             ==============
  
  Average shares outstanding-basic                                 11,525               11,525                      11,525
  Average shares outstanding-diluted                               11,777               11,525                      11,777
  </TABLE>
  <PAGE>
  
  
  
                                     CULP, INC.
                  PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
             FOR THE TWELVE MONTHS ENDED MAY 2, 2004 AND APRIL 27, 2003
                  (Amounts in Thousands, Except for Per Share Data)
  <TABLE>
  <CAPTION>
  
                                                                            TWELVE MONTHS ENDED (UNAUDITED)
                                                        ------------------------------------------------------------------------------
                                                        As Reported                                   April 27, 2003          Proforma
                                                         April 27,    % of                   % of      Proforma Net    % of    % Over
                                                           2003       Sales    Adjustments   Sales    of Adjustments  Sales   (Under)
                                                        ----------- --------  ------------- ------    -------------- ------- ---------
  <S>                                                 <C>            <C>         <C>        <C>           <C>       <C>        <C>
  Net sales                                           $    339,646   100.0%             0                  339,646   100.0%     -6.3%
  Cost of sales                                            282,073    83.0%        (2,918)   -0.9%  (4)    279,155    82.2%     -6.9%
                                                        ----------- --------  ------------- ------    -------------- ------- ---------
              Gross profit                                  57,573    17.0%        (2,918)   -0.9%          60,491    17.8%     -3.6%
  
  Selling, general and
    administrative expenses                                 40,040    11.8%             0    0.0%           40,040    11.8%      2.4%
  Restructuring expense                                     12,981     3.8%       (12,981)  -3.8%  (5)           0     0.0%      0.0%
                                                        ----------- --------  ------------- ------    -------------- ------- ---------
              Income  (loss) from operations                 4,552     1.3%       (15,899)  -4.7%           20,451     6.0%    -15.4%
  
  Interest expense                                           6,636     2.0%             0    0.0%            6,636     2.0%    -16.7%
  Interest income                                             (596)   -0.2%             0    0.0%             (596)   -0.2%    -36.9%
  Early extinguishment of debt                                   0     0.0%             0    0.0%                0     0.0%      0.0%
  Other expense                                                805     0.2%             0    0.0%              805     0.2%     -6.8%
                                                        ----------- --------  ------------- ------    -------------- ------- ---------
              Income (loss) before income taxes             (2,293)   -0.7%       (15,899)  -4.7%           13,606     4.0%    -16.2%
  
  Income taxes  (1)                                         (1,557)    67.9%       (6,185)  38.9%            4,628    34.0%    -18.7%
                                                        ----------- --------  ------------- ------    -------------- ------- ---------
  Income (loss) before cumulative effect of
    accounting change                                 $       (736)   -0.2%        (9,714)  -2.9%            8,978     2.6%    -14.9%
                                                        ----------- --------  ------------- ------    -------------- ------- ---------
  
  Cumulative effect of accounting change,
     net of income taxes                                   (24,151)               (24,151)                       0
                                                        -----------           -------------           --------------
  
              Net income (loss)                            (24,887)               (33,865)                   8,978
                                                        ===========           =============           ==============
  
  Basic income (loss) per share:
              Income (loss) before cumulative effect
                of accounting change                 $       (0.06)                ($0.85)                    0.78
              Cumulative effect of accounting change         (2.11)                  2.11                     0.00
                                                        -----------
                                                                                                      --------------
              Net income (loss)                              (2.17)                                          $0.78
                                                        ===========                                   ==============
  
  Diluted income (loss) per share:
              Income (loss) before cumulative effect
              of accounting change                   $       (0.06)                 (0.85)                    0.77
              Cumulative effect of accounting change         (2.11)                  2.11                     0.00
                                                        -----------
              Net income (loss)                              (2.17)                                          $0.77
                                                        ===========                                   ==============
  
  Average shares outstanding-basic                          11,462                 11,462                   11,462
  Average shares outstanding-diluted                        11,462                 11,462                   11,712
  
  
  Notes:
   (1)  The percent of net sales column for income taxes is calculated as a % of income (loss) before income taxes.
   (2)  The $1.0 million restructuring credit represents adjustment of accrued employee benefit and other plant closing costs related
        to the shutdown of the Chattanooga and Lumberton operations.
   (3)  The $1.7 million charge represents premium and fees paid to reduce the private placement loan balance.
   (4)  The $2.9 million represents restructuring related charges for inventory markdowns and movement of equipment relating to the
        Chattanooga plant closing.
   (5)  The $13.0 million represents restructuring charges for the shut down of the Chattanooga operation, $12.1 million, and the
        additional write-down of wet printed assets held for sale, $1.3 million, offset by a restructuring credit of $354,000 for
        over accrued employee benefit and plant security costs.
  </TABLE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
        for the three and twelve months ended May 2, 2004 and April 27, 2003
  
  
  
  
  OVERVIEW
  
  Highlights for the fourth quarter and fiscal year ended May 2, 2004, include:
  
  
       Gross profit margin of 18.4% for the quarter and 18.3% for the fiscal year
  
       Mattress ticking sales up 9.4% for the quarter and nearly 7.0% for the
         fiscal year
  
       Debt-to-capital ratio reduced to 33.0%, the lowest level for Culp since
         fiscal 1993
  
       Free cash flow of $15.4 million for the fiscal year
  
  GENERAL -- For the fourth  quarter of fiscal 2004,  net sales  decreased 5.8% to
  $85.1 million; and the company reported net income of $3.7 million, or $0.32 per
  share  diluted,  compared  with net income of $3.3  million,  or $0.28 per share
  diluted, in the fourth quarter of fiscal 2003. Excluding  restructuring credits,
  earnings for the fourth  quarter of fiscal 2004 were $3.0 million,  or $0.26 per
  share diluted, versus net income of $3.9 million, or $0.33 per share diluted, in
  the  fourth  quarter  of fiscal  2003.  For  fiscal  2004 as a whole,  net sales
  decreased 6.3% to $318.1  million;  and the company  reported net income of $7.2
  million, or $0.61 per share diluted,  versus a net loss before cumulative effect
  of  accounting  change of  $736,000,  or $0.06 per  share  diluted,  a year ago.
  Including the cumulative  effect of accounting  change,  the company  reported a
  loss of $2.17 per share for fiscal  2003.  Excluding  restructuring  credits and
  charges for early  extinguishment  of debt,  net income for fiscal 2004 was $7.6
  million,  or $0.65 per share  diluted,  versus $9.0 million,  or $0.77 per share
  diluted, for fiscal 2003.
  
  INCOME STATEMENT COMMENTS
  
       UPHOLSTERY FABRICS SEGMENT (See page 5 - Sales and Gross Profit by Segment)
  
       Net Sales -- Upholstery  fabric sales for the fourth quarter of fiscal 2004
  decreased  11.6% to $57.9 million when compared to the fourth  quarter of fiscal
  2003,  primarily  reflecting a decline in orders in the Culp Decorative  Fabrics
  (CDF) division  related to consumer  preference for leather and competition from
  imported fabrics, including cut and sewn kits.
  
  With the company's offshore sourcing efforts,  including the China platform, the
  company is  experiencing  higher sales of upholstery  fabric  products  produced
  outside of the company's U.S.  manufacturing  plants. These sales, which include
  microdenier suedes, accounted for approximately 10.7% of upholstery fabric sales
  for the fourth quarter of fiscal 2004,  more than double the percentage from the
  year earlier quarter.
  
  Upholstery  fabric yards sold during the fourth quarter were 13.3 million versus
  16.0 million in the fourth  quarter of fiscal 2003, a decline of 16.9%.  Average
  selling price was $4.23 per yard for the fourth quarter  compared with $3.98 per
  yard in the same  quarter of last year,  an increase of 6.3%,  due  primarily to
  higher average selling prices in the Culp Decorative Fabrics division.
  
       Gross Profit -- Gross profit for the fourth quarter of fiscal 2004 was $9.8
  million,  or 16.8% margin,  versus $11.0 million,  or 16.8% margin, for the same
  quarter of last year. Excluding  restructuring  related charges of $1.0 million,
  which were included in cost of sales in last year's fourth quarter, gross profit
  dollars and margins were $12.0 million and 18.3%, respectively.  The decrease in
  gross  profit and margins  primarily  reflects  lower sales  volume  within CDF,
  coupled with lower capacity utilization.
  
       China  Operations -- During the fourth  quarter of fiscal 2004, the company
  began incoming  fabric  inspection and testing,  and started  shipping fabric to
  customers.  Finishing operations also began in the fourth quarter of this fiscal
  year. As expected,  the company experienced modest operating losses in its China
  operation during the current fiscal year.
  
  
  
       MATTRESS TICKING SEGMENT (See page 5 - Sales and Gross Profit by Segment)
  
       Net Sales -- Mattress  ticking sales for the fourth  quarter of fiscal 2004
  increased 9.4% to $27.2  million,  due to better  industry  demand and continued
  gains with key  customers.  The 6.7% fiscal  year sales gain in this  segment is
  especially   noteworthy  because  it  occurred  during  the  bedding  industry's
  transition to selling predominantly  one-sided  mattresses,  which utilize about
  one-third  less  mattress  ticking.  This  transition  at  retail  began in late
  calendar year 2002 and is expected to continue through early calendar year 2005.
  
  Mattress  ticking yards sold during the fourth  quarter of fiscal 2004 were 11.6
  million compared with 10.1 million yards in the fourth quarter of last year. The
  average  selling  price was $2.33 per yard for the fourth  quarter,  compared to
  $2.45 per yard in the same quarter last year.
  
       Gross Profit -- For the fourth quarter of fiscal 2004, the mattress ticking
  segment  reported  gross  profit  dollars and margins of $5.9 million and 21.6%,
  respectively,  compared  with $5.2 million and 20.9% for the same period of last
  year.  The loss in margin  due to a lower  average  selling  price was more than
  offset by improved operating efficiencies and lower fixed costs.
  
       SG&A  EXPENSES  -- SG&A  expenses of $9.9  million  for the fourth  quarter
  decreased  approximately  $399,000,  or 3.9%,  from the prior year amount.  As a
  percent of net sales, SG&A expenses  increased  slightly to 11.7% from 11.4% the
  previous year, due to higher professional fees and lower sales.
  
       INTEREST  EXPENSE AND  INTEREST  INCOME -- Interest  expense for the fourth
  quarter  declined to $988,000  from $1.4 million the previous  year due to lower
  borrowings  outstanding.  Interest income decreased to $20,000 from $182,000 the
  previous  year due to lower  interest  rates  earned  in  fiscal  2004 and lower
  invested balances.
  
       INCOME TAXES -- The  effective  tax rate (taxes as a  percentage  of pretax
  income  (loss)) for fiscal 2004 was 33.0%  compared  with 67.9% for fiscal 2003.
  The higher rate for the prior period reflects the increased tax benefits related
  to the  company's  loss in the U.S.  resulting  from the  restructuring  charges
  recorded in the second quarter of fiscal 2003.  Excluding the cumulative  effect
  of accounting change and  restructuring  and related charges,  the effective tax
  rate for fiscal 2003 was 34.0%.
  
  
  BALANCE SHEET COMMENTS
  
       CASH, CASH EQUIVALENTS AND SHORT-TERM  INVESTMENTS - Cash, cash equivalents
  and  short-term  investments  as of May 2, 2004  decreased to $14.6 million from
  $24.4  million  at the end of fiscal  2003,  reflecting  free cash flow of $15.4
  million for fiscal 2004,  and the $25 million  prepayment  of the  company's $75
  million  outstanding  senior notes (see additional  discussion of free cash flow
  and debt below).
  
       WORKING  CAPITAL -- Accounts  receivable as of May 2, 2004  decreased  4.8%
  from the year-earlier  level,  principally due to lower sales volume. Days sales
  outstanding totaled 33 days at May 2, 2004, the same as for the same period last
  fiscal year.  Inventories at the close of the fourth quarter decreased 1.0% from
  a year ago.  Inventory  turns for the fourth quarter were 5.5 versus 5.7 for the
  year-earlier   period.   Operating   working  capital   (comprised  of  accounts
  receivable,  inventories and trade accounts payable) was $64.4 million at May 2,
  2004, up from $61.9 million a year ago.
  
       PROPERTY,  PLANT AND EQUIPMENT -- Capital spending for fiscal 2004 was $6.7
  million,  including  approximately $3.0 million for manufacturing  equipment and
  leasehold  improvements  related  to the China  operation.  This  compares  with
  capital spending of $12.2 million in fiscal 2003. Depreciation was $13.6 million
  compared  to $14.0  million  for fiscal  2003.  For  fiscal  2005,  the  company
  anticipates capital  expenditures to be approximately $9.0 million,  and expects
  depreciation to be comparable to fiscal 2004.
  
       INTANGIBLE  ASSETS -- As of May 2, 2004,  $9.2  million in  goodwill is the
  company's only intangible  asset. As of April 29, 2002, the company adopted SFAS
  No. 142 and recognized an impairment  charge of $37.6 million ($24.2 million net
  of taxes of $13.4  million)  during  the  first  quarter  of  fiscal  2003.  The
  remaining  goodwill is comprised of $4.1 million related to the mattress ticking
  segment,  and $5.1  million  related  to CDF,  which  is part of the  upholstery
  fabrics segment.
  
       LONG-TERM  DEBT  -- The  company's  long-term  debt  of  $51.0  million  is
  unsecured and is comprised of $50.0 million in outstanding  senior notes, with a
  fixed interest rate of 7.76%, and a $1.0 million, non-interest bearing term loan
  with the  Canadian  government.  Additionally,  the company has a $15.0  million
  revolving  credit line with a bank, of which no balance is outstanding at May 2,
  2004. The bank agreement  expires in August 2004. The first scheduled  principal
  payment  on the $50  million  term loan is due March  2006 in the amount of $7.5
  million.  The  Canadian  government  loan is repaid in  annual  installments  of
  approximately  $500,000  per  year.  The  company  was in  compliance  with  all
  financial covenants in its loan agreements as of May 2, 2004.
  
  FREE CASH FLOW COMMENTS
  
       Free cash flow (see  reconciliation  on page 3 of this  release)  was $15.4
  million for fiscal 2004,  compared  with $23.0  million for the same period last
  year.  This decrease is primarily due to less cash flow  generated  from working
  capital and higher payments on vendor-financed capital expenditures.
  
  BUSINESS OUTLOOK
  
       The first  quarter of fiscal 2005 will include 13 weeks versus 14 weeks for
  the same  quarter last year.  The first  quarter of the  company's  fiscal year,
  which includes the summer  months,  is typically the slowest period for Culp and
  the furniture industry due to scheduled plant vacation shutdowns. The company is
  experiencing a definite slowdown in orders as a result of weaker retail activity
  throughout the furniture industry. Given these factors, the company expects that
  first  quarter  consolidated  sales,  as compared to the same quarter last year,
  will decrease  more than the 5.8%  experienced  in the fourth  quarter of fiscal
  2004.  Mattress  ticking  segment sales are expected to approximate the sales in
  the same quarter of last year.  Upholstery  fabric segment sales are expected to
  decline  from the same quarter of last year more than the 11.6%  experienced  in
  the fourth quarter of fiscal 2004, due primarily to softness in incoming  orders
  for CDF.
  
  Based on these sales  expectations  and the lower gross profit in the upholstery
  fabrics segment,  and considering the seasonal slowdown and industry conditions,
  the  company  expects  to  report a net loss in the  range of $0.08 to $0.13 per
  diluted  share for the  first  quarter  of  fiscal  2005,  with  actual  results
  primarily depending upon the level of demand throughout the quarter.
  
  Management remains optimistic that upholstery fabric sales will start to pick up
  in the fall, as is seasonally  typical in the furniture  industry.  However,  if
  sales  continue  to  be  under  pressure  in  the  upholstery  fabrics  segment,
  management  is prepared to take the  necessary  actions to adjust the  company's
  cost structure and  rationalize  capacity,  as has been  demonstrated  in recent
  years.  Management  believes that the continued strength in the mattress ticking
  business,  the focused  efforts to develop  offshore  sourcing  initiatives  and
  proven ability to generate free cash flow are fundamental competitive advantages
  for Culp.
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text: --------------------------------------------------------------------------------
  
                                    UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                                      ---------
  
                                      Form 8-K
  
                                   CURRENT REPORT
  
                  Pursuant to Section 13 or 15(d) of the Securities
                                Exchange Act of 1934
  
                                    -------------
  
           Date of Report (Date of earliest event reported) June 16, 2004
  
                                     CULP, INC.
  
               (Exact name of registrant as specified in its charter)
  
         North Carolina                  0-12781                   56-1001967
  (State or other jurisdiction of   (Commission File No.)        (IRS Employer
         incorporation)                                        Identification No.)
  
                                101 South Main Street
                          High Point, North Carolina 27260
                      (Address of principal executive offices)
                                   (336) 889-5161
                (Registrant's telephone number, including area code)
  
            (Former name or former address, if changed since last report)
  
  --------------------------------------------------------------------------------
  INDEX
                                       -------
  
                                                                           Page
  Item 7 -  Exhibits                                                         3
  
  Item 12 - Results of Operations and Financial Condition                    3
  
  Signature                                                                  4
  
  Exhibits
  Item 7 -- Exhibits
  
      99(a)  News Release dated June 16, 2004
  
      99(b)  Financial Information Release dated June 16, 2004
  
      Item 12 -- Results of Operations and Financial Condition
  
       On June 16, 2004, Culp, Inc. (the  "Registrant" or the "company")  issued a
  news release to announce its financial results for the fourth quarter and fiscal
  year ended May 2, 2004. The news release is attached hereto as Exhibit 99(a).
  
       Also on June 16,  2004,  the  Registrant  released a Financial  Information
  Release containing  additional  financial  information and disclosures about the
  Registrant's  fiscal  year May 2, 2004.  The  Financial  Information  Release is
  attached hereto as Exhibit 99(b).
  
  The news release and Financial  Information  Release contain  disclosures  about
  free cash  flow,  a  non-GAAP  performance  measure,  that  management  believes
  provides  useful  information  to investors  because it measures  the  company's
  available  cash  flow  for  potential  debt  repayment,  stock  repurchases  and
  additions to cash, cash equivalents and short-term investments. In addition, the
  news  release  and  Financial   Information   Release  contain  proforma  income
  statements which reconcile the reported income statements with proforma results,
  which exclude restructuring and related charges and credits, expenses related to
  early  extinguishment of debt, and cumulative effect of accounting  change.  The
  company has included  this  proforma  information  in order to show  operational
  performance   excluding  the  effects  of  restructuring  charges  and  credits,
  accounting  rule changes and expenses  related to early debt  repayment that are
  not expected to occur on a regular basis.  Management believes this presentation
  aids in the comparison of financial results among comparable financial periods.
  
  Forward  Looking  Information.  This  Report and the  exhibits  attached  hereto
  contain  statements that may be deemed  "forward-looking  statements" within the
  meaning  of the  federal  securities  laws,  including  the  Private  Securities
  Litigation  Reform Act of 1995  (Section 27A  of the  Securities Act of 1933 and
  Section 27A of the  Securities  and Exchange Act of 1934).  Such  statements are
  inherently  subject  to  risks  and  uncertainties.   Further,  forward  looking
  statements  are  intended  to speak  only as of the date on which they are made.
  Forward-looking statements are statements that include projections, expectations
  or beliefs  about future  events or results or otherwise  are not  statements of
  historical  fact.  Such  statements  are often but not always  characterized  by
  qualifying words such as "expect,"  "believe,"  "estimate," "plan" and "project"
  and their  derivatives,  and  include but are not  limited to  statements  about
  expectations for the company's future sales, gross profit margins, SG&A or other
  expenses,  and earnings,  as well as any statements regarding the company's view
  of estimates of the  company's  future  results by analysts.  Factors that could
  influence the matters discussed in such statements  include the level of housing
  starts and sales of existing homes,  consumer  confidence,  trends in disposable
  income, and general economic conditions.  Decreases in these economic indicators
  could have a negative effect on the company's business and prospects.  Likewise,
  increases in interest rates,  particularly home mortgage rates, and increases in
  consumer  debt or the  general  rate of  inflation,  could  affect  the  company
  adversely.  In  addition,  strengthening  of  the U.  S.  dollar  against  other
  currencies  could make the company's  products less  competitive on the basis of
  price in markets  outside  the  United  States.  Also,  economic  and  political
  instability  in  international  areas could affect the  company's  operations or
  sources of goods in those areas, as well as demand for the company's products in
  international  markets.  Finally,  unanticipated  delays  or costs in  executing
  restructuring actions could cause the cumulative effect of restructuring actions
  to fail to meet the objectives set forth by management. Other factors that could
  affect the matters  discussed in forward looking  statements are included in the
  company's periodic reports filed with the Securities and Exchange Commission.
  SIGNATURE
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
                                              CULP, INC.
                                              (Registrant)
  
                                      By:      Franklin N. Saxon
                                               ----------------------------
                                               President and Chief Operating
                                               Officer
  
  Dated:  June 16, 2004
  CULP ANNOUNCES YEAR-END FISCAL 2004 RESULTS
  
  HIGH  POINT,  N.C.  (June 16,  2004) - Culp,  Inc.  (NYSE:  CFI) today  reported
  financial and operating results for the fourth quarter and fiscal year ended May
  2, 2004. The highlights for the quarter and fiscal year include:
  
  o     Gross profit margin of 18.4% for the quarter and 18.3% for the fiscal year
  
  o     Mattress  ticking  sales up 9.4% for the  quarter and nearly  7.0% for the
        fiscal year
  
  o     Debt-to-capital  ratio  reduced to 33.0%,  the lowest level for Culp since
        fiscal 1993
  
  o     Free cash flow of $15.4 million for the fiscal year
  
       For the three months  ended May 2, 2004,  net sales were $85.1  million,  a
  5.8% decrease  compared with $90.4 million a year ago. The company  reported net
  income of $3.7 million,  or $0.32 per diluted  share,  for the fourth quarter of
  fiscal 2004.  The results for the fourth quarter of fiscal 2004 include a credit
  of  $1.0  million,  or  $0.06  per  diluted  share,  related  to  the  company's
  restructuring reserves.  Excluding this amount, net income for the fourth fiscal
  quarter of fiscal 2004 was $0.26 per diluted  share.  The company  reported  net
  income of $3.3 million, or $0.28 per diluted share, including  restructuring and
  related charges for the fourth quarter of fiscal 2003. The financial results for
  the  fourth  quarter  of  fiscal  2003  include  a  total  of  $1.0  million  in
  restructuring  and related  charges  included in cost of sales.  Excluding these
  charges,  net income for the fourth fiscal quarter of 2003 was $3.9 million,  or
  $0.33 per diluted share.  (A  reconciliation  to the net income and earnings per
  share calculations and free cash flow has been set forth on Page 5.)
  
       For the fiscal year ended May 2, 2004,  the company  reported  net sales of
  $318.1 million, a 6.3% decrease compared with $339.6 million for the same period
  a year ago.  Net income for fiscal 2004 was $7.2  million,  or $0.61 per diluted
  share,  compared with a net loss of $24.9  million,  or $2.17 per diluted share,
  including  restructuring charges and the cumulative effect of accounting change,
  for fiscal 2003. Excluding the credit for the company's  restructuring  reserves
  described  above,  and a charge of $1.7 million,  or $0.10 per diluted share, in
  the third fiscal quarter related to the early extinguishment of debt, net income
  for  fiscal  2004 was  $7.6  million,  or $0.65  per  diluted  share.  Excluding
  restructuring  and  related  charges  and the  cumulative  effect of  accounting
  change, net income for fiscal 2003 was $9.0 million, or $0.77 per diluted share.
  
       "As  previously   announced,   our  fourth  quarter  performance   reflects
  lower-than-expected  sales of upholstery fabrics," remarked Robert G. Culp, III,
  chief  executive  officer of Culp,  Inc. "This segment  continues to face demand
  pressure from both the current consumer preference for leather furniture as well
  as competition  from imported  fabrics,  including cut and sewn kits.  Given the
  lower sales volume,  gross profit  margin for this segment  declined to 16.8% in
  the fourth  quarter  compared  with 18.3% in the prior  year  period,  excluding
  restructuring  related  charges.  To enhance our  competitive  position,  we are
  aggressively pursuing offshore sourcing  initiatives,  including the development
  of our China operations.  As a result, we are significantly  increasing sales of
  upholstery fabrics produced outside of the company's U.S. manufacturing plants.
  
       "Our mattress  ticking  business has continued to gain momentum  throughout
  fiscal  2004.  Sales in this  segment  were up 9.4% for the fourth  quarter  and
  nearly 7.0% for the fiscal year,  due to better  industry  demand and  continued
  gains  with  key  customers.  These  gains  reflect  Culp's  design  leadership,
  exceptional  customer  service and low cost  operations.  This  growth  trend is
  particularly meaningful in light of the bedding industry's ongoing transition to
  selling predominantly  one-sided mattresses,  which utilize about one-third less
  fabric.  We expect  that the  mattress  ticking  business  will  account  for an
  increasing percentage of the company's overall sales and profitability in fiscal
  2005.
  
       "Strengthening  our balance  sheet has been an important  focus for Culp in
  fiscal  2004,"  Culp  continued.  "With the $25.0  million  prepayment  on $75.0
  million of outstanding  senior notes in the third fiscal quarter,  our long-term
  debt now  stands  at $50.5  million  compared  with  $76.0  million  a year ago.
  Notably, we have reduced our long-term debt by a total of $86.0 million over the
  past four years. As a result,  our long-term  debt-to-capital  ratio improved to
  33.0% at the end of fiscal  2004,  compared  with 44.4% a year ago. As such,  we
  have  considerably  improved our financial  position and have greater  financial
  flexibility to pursue our strategic initiatives."
  
       Commenting on the business  outlook,  Culp added, "The first quarter of our
  fiscal year,  which includes the summer months,  is typically the slowest period
  for Culp and the  furniture  industry  due in part to scheduled  plant  vacation
  shutdowns.  In  addition,  in fiscal 2005,  our first fiscal  quarter will be 13
  weeks  versus 14 weeks last year.  We are seeing a definite  slowdown  in orders
  reflecting weaker retail activity throughout the furniture industry. Given these
  factors,  we expect our  consolidated  sales for the first  quarter  will show a
  greater year-over-year decline than we experienced this past quarter. We believe
  the  upholstery  fabrics  segment  will  continue to be affected by  competitive
  factors and expect sales in this segment to decline by a greater amount than the
  fourth  quarter  decline of 11.6%.  Sales in our  mattress  ticking  segment are
  expected to approximate sales for the prior year quarter.
  
       Based on these sales  expectations and lower gross profit in the upholstery
  fabrics segment,  and considering the seasonal slowdown and industry conditions,
  we expect to report a net loss of $0.08 to $0.13 per share diluted for the first
  fiscal quarter of 2005. The actual results will depend  primarily upon the level
  of demand  throughout the quarter.  We remain  optimistic that upholstery fabric
  sales  will  start  to pick up in the  fall,  as is  seasonally  typical  in the
  furniture  industry.  However,  if sales  continue  to be under  pressure in the
  upholstery  fabrics  segment,  we are prepared to take the necessary  actions to
  adjust our cost structure and capacity, as we have demonstrated in recent years.
  We believe the continued strength in our mattress ticking business,  our focused
  efforts to develop  offshore  sourcing  initiatives,  and our proven  ability to
  generate free cash flow are  fundamental  competitive  advantages for Culp as we
  enter fiscal 2005."
  
       Culp,  Inc. is one of the world's largest  marketers of upholstery  fabrics
  for furniture  and is a leading  marketer of mattress  ticking for bedding.  The
  Company's  fabrics are used  principally in the  production of  residential  and
  commercial furniture and bedding products.
  
       This  release  contains  statements  that  may be  deemed  "forward-looking
  statements"  within the meaning of the federal  securities  laws,  including the
  Private Securities  Litigation Reform Act of 1995 (Section 27A of the Securities
  Act of 1933 and Section 27A of the  Securities  and Exchange Act of 1934).  Such
  statements  are  inherently  subject  to  risks  and   uncertainties.   Further,
  forward-looking  statements  are  intended to speak only as of the date on which
  they  are  made.   Forward-looking   statements  are  statements   that  include
  projections, expectations or beliefs about future events or results or otherwise
  are not statements of historical  fact. Such statements are often but not always
  characterized  by  qualifying  words such as  "expect,"  "believe,"  "estimate,"
  "plan" and "project" and their  derivatives,  and include but are not limited to
  statements  about  expectations  for the company's  future  sales,  gross profit
  margins,  SG&A or  other  expenses,  and  earnings,  as  well as any  statements
  regarding the company's  view of estimates of the  company's  future  results by
  analysts.  Factors that could influence the matters discussed in such statements
  include  the level of  housing  starts  and sales of  existing  homes,  consumer
  confidence,  trends in  disposable  income,  and  general  economic  conditions.
  Decreases  in these  economic  indicators  could have a  negative  effect on the
  company's  business  and  prospects.  Likewise,  increases  in  interest  rates,
  particularly  home mortgage rates, and increases in consumer debt or the general
  rate  of   inflation,   could  affect  the  company   adversely.   In  addition,
  strengthening  of the U. S.  dollar  against  other  currencies  could  make the
  company's products less competitive on the basis of price in markets outside the
  United States.  Also, economic and political  instability in international areas
  could affect the  company's  operations  or sources of goods in those areas,  as
  well as demand for the company's  products in  international  markets.  Finally,
  unanticipated delays or costs in executing restructuring actions could cause the
  cumulative  effect of  restructuring  actions to fail to meet the objectives set
  forth by  management.  Other factors that could affect the matters  discussed in
  forward-looking  statements are included in the company's periodic reports filed
  with the Securities and Exchange Commission.
  CULP, INC.
                           Condensed Financial Highlights
                                     (Unaudited)
  
                                                          Three Months Ended
                                                       ------------------------
                                                         May 2,       April 27,
                                                          2004          2003
                                                       ------------ -------------
  Net sales                                           $ 85,148,000   $ 90,406,000
                                                       ============ =============
  Net income                                          $  3,733,000   $  3,272,000
  Net income per share:
     Basic                                            $       0.32   $       0.28
     Diluted                                          $       0.32   $       0.28
  Net income per share, diluted, excluding
    restructuring and related charges and credits
    and early extinguishment of debt*                 $       0.26   $       0.33
  Average shares outstanding:
     Basic                                              11,531,000     11,496,000
     Diluted                                            11,815,000     11,616,000
  
                                                           Fiscal Year Ended
                                                       --------------------------
                                                         May 2,       April 27,
                                                          2004          2003
                                                       ------------ -------------
  Net sales                                           $318,116,000   $339,646,000
                                                       ============ =============
  Income (loss) before cumulative effect of
     accounting change                                $  7,220,000   $   (736,000)
  Cumulative effect of accounting change, net of
     income taxes                                              --     (24,151,000)
                                                       ------------ --------------
  Net income (loss)                                   $  7,220,000   $(24,887,000)
                                                       ============ ==============
  
  Basic income (loss) per share:
    Income (loss) before cumulative effect of
       accounting change                              $       0.63   $      (0.06)
    Cumulative effect of accounting change                    0.00          (2.11)
                                                       ------------ --------------
    Net income (loss)                                 $       0.63   $      (2.17)
                                                       ============ ==============
  
  Diluted income (loss) per share:
    Income (loss) before cumulative effect of
       accounting change                              $       0.61   $      (0.06)
    Cumulative effect of accounting change                    0.00          (2.11)
                                                       ------------ --------------
    Net income (loss)                                 $       0.61   $      (2.17)
                                                       ============ ==============
  
  Net income per share, diluted, excluding restructuring
    and related charges and credits, early
    extinguishment of debt and cumulative effect
    of accounting change**                            $       0.65   $       0.77
  
  Average shares outstanding:
    Basic                                               11,525,000     11,462,000
    Diluted                                             11,777,000     11,462,000
  
     * Excludes credit for restructuring  reserves of $1.0 million  ($701,000,  or
       $0.06 per  diluted  share,  after  taxes) for the fourth  quarter of fiscal
       2004. Excludes restructuring and related charges of $1.0 million ($601,000,
       or $0.05 per diluted  share,  after taxes) for the fourth quarter of fiscal
       2003.
  
    ** Excludes credit for restructuring  reserves of $1.0  million ($701,000,  or
       $0.06 per diluted share, after taxes) for fiscal 2004.  Excludes charge for
       early  extinguishment  of debt of $1.7 million ($1.1 million,  or $0.10 per
       diluted share, after taxes) for fiscal 2004.  Excludes cumulative effect of
       accounting  change,  net of  income  taxes,  of $24.2  million  ($2.11  per
       diluted share) for fiscal 2003. Excludes  restructuring and related charges
       of $15.9 million ($9.7 million,  or $0.85 per diluted  share,  after taxes)
       for fiscal 2003.
  CULP, INC.
       Reconciliation of Net Income (Loss) as Reported to Pro Forma Net Income
                                     (Unaudited)
  Three Months Ended          Fiscal Year Ended
                                            -------------------------   --------------------------
                                               May 2,       April 27,      May 2,        April 27,
                                               2004          2003           2004           2003
                                            ------------ ------------    ------------ -------------
  Net income (loss), as reported            $  3,733,000 $  3,272,000    $ 7,220,000  $(24,887,000)
  Cumulative effect of
    accounting change, net of
    income taxes                                     --            --             --    24,151,000
  Restructuring and related charges
    (credits), net of income taxes              (701,000)     601,000       (701,000)    9,714,000
  Early extinguishment of debt,
    net of income taxes                              --            --      1,120,000            --
                                            ------------ ------------    ------------ -------------
  Pro forma net income                       $ 3,032,000 $  3,873,000    $ 7,639,000   $ 8,978,000
                                            ============ ============    ============ =============
  
              Reconciliation of Net Income (Loss) Per Share as Reported
                          to Pro Forma Net Income Per Share
                                     (Unaudited)
  
  Diluted net income (loss) per
    share                                    $      0.32  $      0.28    $      0.61   $     (2.17)
  Cumulative effect of
    accounting change, net of
    income taxes                                      --           --             --          2.11
  Restructuring and related charges
    (credits), net of income taxes                 (0.06)        0.05          (0.06)         0.85
  Early extinguishment of debt,
    net of income taxes                               --           --           0.10            --
  Effect of dilutive stock options                    --           --           0.00         (0.02)
                                            ------------ ------------    ------------ -------------
  Diluted net income
    per share, adjusted                      $      0.26  $      0.33    $      0.65   $      0.77
                                            ============ ============    ============ =============
  Reconciliation of Cash Flow from Operations to Free Cash Flow
                                     (Unaudited)
  
                                                           Fiscal Year Ended
                                                      -------------------------
                                                         May 2,       April 27,
                                                          2004          2003
                                                      ------------ ------------
  Cash flow from operations                           $25,352,000  $31,129,000
  Capital expenditures                                 (5,976,000)  (6,830,000)
  Change in accounts payable-capital expenditures      (3,932,000)  (1,294,000)
                                                      ------------ ------------
  
  Free cash flow                                      $15,444,000  $23,005,000
                                                      ============ ============
  Exhibit 99(b)
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                      CONSOLIDATED STATEMENTS OF INCOME (LOSS)
     FOR THE THREE MONTHS AND TWELVE MONTHS ENDED MAY 2, 2004 AND APRIL 27, 2003
  
                  (Amounts in Thousands, Except for Per Share Data)
  THREE MONTHS ENDED (UNAUDITED)
                                                       -------------------------------------------------------------------------------
  
                                                                  Amounts                                           Percent of Sales
                                                       ---------------------------                      ------------------------------
                                                          May 2,      April 27,          % Over         May 2,           April 27,
                                                           2004         2003            (Under)          2004             2003
                                                       -------------  ------------   ---------------    -------------   --------------
  Net sales                                        $         85,148        90,406          (5.8)%          100.0 %           100.0 %
  Cost of sales                                              69,510        74,218          (6.3)%           81.6 %            82.1 %
                                                       -------------  ------------   --------------    --------------   --------------
       Gross profit                                          15,638        16,188          (3.4)%           18.4 %            17.9 %
  
  Selling, general and
    administrative expenses                                   9,925        10,324          (3.9)%           11.7 %            11.4 %
  Restructuring credit                                       (1,047)          (25)          N/A             (1.2)%            (0.0)%
                                                       -------------  ------------   --------------    --------------   --------------
       Income  from operations                                6,760         5,889          14.8 %            7.9 %             6.5 %
  
  Interest expense                                              988         1,392         (29.0)%            1.2 %             1.5 %
  Interest income                                               (20)         (182)        (89.0)%           (0.0)%            (0.2)%
  Other expense                                                 220           160          37.5 %            0.3 %             0.2 %
                                                       -------------  ------------   --------------    --------------   --------------
       Income before income taxes                             5,572         4,519          23.3 %            6.5 %             5.0 %
  
  Income taxes*                                               1,839         1,247          47.5 %           33.0 %            27.6 %
                                                       -------------  ------------   --------------    --------------   --------------
  
       Net income                                  $          3,733         3,272          14.1 %            4.4 %             3.6 %
                                                       =============  ============   ==============    ==============   ==============
  
  Net income  per share-basic                                 $0.32         $0.28          14.3 %
  Net income per share-diluted                                $0.32         $0.28          14.3 %
  Net income per share, diluted,
    excluding restructuring and related                       $0.26         $0.33         (21.2)%
    charges (see proforma statement on page 6)
  Average shares outstanding-basic                           11,531        11,496           0.3 %
  Average shares outstanding-diluted                         11,815        11,616           1.7 %
  
                                                                                     TWELVE MONTHS ENDED (UNAUDITED)
                                                       -----------------------------------------------------------------------------
  
                                                                  Amounts                                         Percent of Sales
                                                       ---------------------------                      ------------------------------
                                                          May 2,      April 27,          % Over           May 2,            April 27,
                                                           2004         2003            (Under)            2004               2003
                                                       -------------  ------------   ---------------    --------------   -------------
  
  Net sales                                        $        318,116       339,646         (6.3) %           100.0 %           100.0 %
  Cost of sales                                             259,794       282,073         (7.9) %            81.7 %            83.0 %
                                                       -------------  ------------   ----------- ---    --------------   -------------
       Gross profit                                          58,322        57,573          1.3  %            18.3 %            17.0 %
  
  Selling, general and
    administrative expenses                                  41,019        40,040          2.4  %            12.9 %            11.8 %
  Restructuring (credit) expense                             (1,047)       12,981       (108.1) %            (0.3)%             3.8 %
                                                       -------------  ------------   ----------- ---    --------------   -------------
       Income from operations                                18,350         4,552        303.1  %             5.8 %             1.3 %
  
  Interest expense                                            5,528         6,636        (16.7) %             1.7 %             2.0 %
  Interest income                                              (376)         (596)       (36.9) %            (0.1)%            (0.2)%
  Early extinguishment of debt                                1,672             0        100.0  %             0.5 %             0.0 %
  Other expense                                                 750           805         (6.8) %             0.2 %             0.2 %
                                                       -------------  ------------   ----------- ---    --------------   -------------
       Income (loss) before income taxes                     10,776        (2,293)       570.0  %             3.4 %            (0.7)%
  
  Income taxes*                                               3,556        (1,557)       328.4  %            33.0 %            67.9 %
                                                       -------------  ------------   ----------- ---    --------------   -------------
  Income (loss) before cumulative effect of
     accounting change                                        7,220          (736)     1,081.0  %             2.3 %            (0.2)%
  
                                                                                                        =============      ===========
  Cumulative effect of accounting change, net of
     income taxes                                                 0       (24,151)
                                                       -------------  ------------
  
       Net income (loss)                           $          7,220       (24,887)
                                                       =============  ============
  
  Basic income (loss) per share:
       Income (loss) before cumulative effect of
         accounting change                         $           0.63         (0.06)       1,075.6  %
       Cumulative effect of accounting change                  0.00         (2.11)         100.0  %
                                                       -------------  ------------   -----------
       Net income (loss)                           $           0.63         (2.17)         128.9  %
                                                       =============  ============   ===========
  
  Diluted income (loss) per share:
       Income (loss) before cumulative effect of
         accounting change                         $           0.61         (0.06)       1,054.7  %
       Cumulative effect of accounting change                  0.00         (2.11)         100.0  %
                                                       -------------  ------------   -----------
       Net income (loss)                           $           0.61         (2.17)         128.2  %
                                                       =============  ============   ===========
  
  Net income per share, diluted, excluding
    restructuring and related charges and credits,            $0.65         $0.77         (15.6) %
    early extinguishment of debt and cumulative
    effect of accounting change (see proforma
    statement on page 7)
  Average shares outstanding-basic                           11,525        11,462           0.5  %
  Average shares outstanding-diluted                         11,777        11,462           2.7  %
  
   *   Percent of sales column for income taxes is calculated as a % of income (loss) before income taxes.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                             CONSOLIDATED BALANCE SHEETS
                           MAY 2, 2004 AND APRIL 27, 2003
                                     (unaudited)
                               (Amounts in Thousands)
  Amounts                        Increase
                                                 ------------------------------------        (Decrease)
                                                   May 2, 2004      April 27, 2003    --------------------------
                                                      2004               2003           Dollars     Percent
                                                 ----------------  ------------------  ----------  --------------
  Current assets
     Cash and cash equivalents                 $          14,568              14,355         213         1.5 %
     Short-term investments                                    0              10,043     (10,043)     (100.0)%
     Accounts receivable                                  30,719              32,259      (1,540)       (4.8)%
     Inventories                                          49,045              49,552        (507)       (1.0)%
     Deferred income taxes                                 9,256              12,303      (3,047)      (24.8)%
     Other current assets                                  1,634               3,204      (1,570)      (49.0)%
                                                 ----------------  ------------------  ----------  --------------
                   Total current assets                  105,222             121,716     (16,494)      (13.6)%
  
  Property, plant & equipment, net                        77,770              84,962      (7,192)       (8.5)%
  Goodwill                                                 9,240               9,240           0         0.0 %
  Other assets                                             1,496               2,235        (739)      (33.1)%
                                                 ----------------  ------------------  ----------  --------------
  
                   Total assets                $         193,728             218,153     (24,425)      (11.2)%
                                                 ================  ==================  ==========  ==============
  
  Current liabilities
     Current maturities of long-term debt      $             528                 500          28         5.6 %
     Accounts payable                                     15,323              19,874      (4,551)      (22.9)%
     Accrued expenses                                     13,028              14,071      (1,043)       (7.4)%
     Accrued restructuring                                 4,968               7,743      (2,775)      (35.8)%
     Income taxes payable                                  1,850                 349       1,501       100.0 %
                                                 ----------------  ------------------  ----------  ----------
                   Total current liabilities              35,697              42,537      (6,840)      (16.1)%
  
  Long-term debt                                          50,502              76,000     (25,498)      (33.6)%
  
  Deferred income taxes                                    4,138               3,851         287         7.5 %
                                                 ----------------  ------------------  ----------  --------------
                   Total liabilities                      90,337             122,388     (32,051)      (26.2)%
  
  Shareholders' equity                                   103,391              95,765       7,626         8.0 %
                                                 ----------------  ------------------  ----------  --------------
  
                   Total liabilities and
                   shareholders' equity        $         193,728             218,153     (24,425)      (11.2)%
                                                 ================  ==================  ==========  ==============
  
  Shares outstanding                                      11,547              11,515          32         0.3 %
                                                 ================  ==================  ==========  ==============
  CULP, INC. FINANCIAL INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
             FOR THE TWELVE MONTHS ENDED MAY 2, 2004 AND APRIL 27, 2003
                                    (unaudited)
  
                               (Amounts in Thousands)
  TWELVE MONTHS ENDED
                                                                          --------------------------
                                                                                   Amounts
                                                                          --------------------------
                                                                            May 2,       April 27,
                                                                             2004          2003
                                                                          ------------  ------------
  Cash flows from operating activities:
       Net income (loss)                                               $        7,220      (24,887)
       Adjustments to reconcile net income (loss) to net cash
          provided by operating activities:
             Cumulative effect of accounting change, net of income taxes            0        24,151
             Depreciation                                                      13,642        13,990
             Amortization of other assets                                         173           457
             Stock-based compensation                                             210           210
             Provision for deferred income taxes                                3,334        (2,507)
             Restructuring (credit) expense                                    (1,047)       12,981
             Changes in assets and liabilities:
                Accounts receivable                                             1,540        11,107
                Inventories                                                       507         8,347
                Other current assets                                            1,570           763
                Other assets                                                      607           366
                Accounts payable                                                 (951)       (8,558)
                Accrued expenses                                               (1,043)       (2,126)
                Accrued restructuring                                          (1,911)       (3,514)
                Income taxes payable                                            1,501           349
                                                                          ------------  ------------
                   Net cash provided by operating activities                   25,352        31,129
                                                                          ------------  ------------
  
  Cash flows from investing activities:
       Capital expenditures                                                    (5,976)       (6,830)
       Purchases of short-term investments                                          0       (10,043)
       Proceeds from the sale of short-term investments                        10,043             0
                                                                          ------------  ------------
                   Net cash provided by (used in) investing activities          4,067       (16,873)
                                                                          ------------  ------------
  
  Cash flows from financing activities:
       Payments on vendor-financed capital expenditures                        (3,932)       (1,294)
       Principal payments of long-term debt                                   (25,470)      (31,984)
       Proceeds from common stock issued                                          196         1,384
                                                                          ------------  ------------
                   Net cash used in financing activities                      (29,206)      (31,894)
                                                                          ------------  ------------
  
  Increase (decrease) in cash and cash equivalents                                213       (17,638)
  
  Cash and cash equivalents at beginning of year                               14,355        31,993
                                                                          ------------  ------------
  
  Cash and cash equivalents at end of year                             $       14,568        14,355
                                                                          ============  ============
  
  Free Cash Flow  (1)                                                  $       15,444        23,005
                                                                          ============  ============
  
  --------------------------------------------------------------------------------------------------
  (1)  Free Cash Flow reconciliation is as follows:
                                                                              FY 2004      FY 2003
                                                                          ------------  ------------
  A)   Net cash provided by operating activities                               25,352        31,129
  B)   Minus:  Capital Expenditures                                            (5,976)       (6,830)
  C)   Minus:  Payments on vendor-financed capital expenditures                (3,932)       (1,294)
                                                                          ------------  ------------
                                                                               15,444        23,005
                                                                          ============  ============
  --------------------------------------------------------------------------------------------------
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL ANALYSIS
                                     MAY 2, 2004
  FISCAL 03                                                FISCAL 04
                                         --------------      ------------------------------------------------------------------------
                                               Q4                        Q1                 Q2                 Q3               Q4
                                         --------------      ------------------------------------------------------------------------
  INVENTORIES
     Inventory turns                               5.7                    5.0                5.1                4.7              5.5
  
  RECEIVABLES
     Days sales in receivables                      33                     32                 34                 31               33
  
  WORKING CAPITAL
     Current ratio                                 2.9                    3.1                2.9                2.6              2.9
     Operating working capital turnover (1)        5.0                    5.1                5.3                5.3              5.2
     Operating working capital (1)             $61,937                $54,854            $61,262            $62,492          $64,439
  
  PROPERTY, PLANT & EQUIPMENT
     Depreciation rate                            6.3%                   6.2%               6.3%               6.2%             6.1%
     Percent property, plant &
       equipment are depreciated                 61.3%                  62.3%              62.9%              64.0%            64.4%
     Capital expenditures                      $12,229 (2)             $1,781             $1,360             $1,101           $1,734
  
  LEVERAGE
     Total liabilities/equity                   127.8%                 124.7%             128.0%              94.9%            87.4%
     Long-term debt/equity                       79.9%                  80.3%              77.7%              51.3%            49.4%
     Long-term debt/capital employed (3)         44.4%                  44.5%              43.7%              33.9%            33.0%
     Long-term debt                            $76,500                $76,551            $76,616            $51,063          $51,030
  
  OTHER
     Book value per share                        $8.33                  $8.28              $8.55              $8.63            $8.95
     Employees at quarter end                    2,463                  2,383              2,373              2,350            2,319
     Sales per employee (annualized)          $144,421               $121,628           $139,161           $129,682         $145,895
     Capital employed (3)                     $172,265               $171,891           $175,221           $150,530         $154,421
  
    (1) Working capital for this calculation is accounts receivable, inventories and accounts payable
    (2) Expenditures for entire year
    (3) Capital employed represents long-term debt plus stockholders equity; Long-term debt is long-term debt plus current
        maturities of long-term debt.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                      SALES / GROSS PROFIT BY SEGMENT/DIVISION
        FOR THE THREE AND TWELVE MONTHS ENDED MAY 2, 2004 AND APRIL 27, 2003
  
                               (Amounts in thousands)
  THREE MONTHS ENDED (UNAUDITED)
                                                        ------------------------------------------------------------------------
                                                              Amounts                              Percent of Total Sales
                                                        --------------------                  --------------------------------
                                                        May 2,     April 27,     % Over        May 2,            April 27,
  Segment/Division Sales (1)                             2004        2003        (Under)        2004               2003
  -------------------------------------------------     --------   ---------   -----------   -------------    ---------------
  Upholstery Fabrics
      Culp Decorative Fabrics                       $    31,511      37,006     (14.8) %          37.0 %             40.9 %
      Culp Velvets/Prints                                25,429      26,772      (5.0) %          29.9 %             29.6 %
      Culp Yarn                                           1,008       1,757     (42.6) %           1.2 %              1.9 %
                                                        --------   ---------   -----------   -------------    ---------------
                                                         57,948      65,535     (11.6) %          68.1 %             72.5 %
  Mattress Ticking
       Culp Home Fashions                                27,200      24,871       9.4  %          31.9 %             27.5 %
                                                        --------   ---------   -----------   -------------    ---------------
  
                                                    $    85,148      90,406      (5.8) %         100.0 %            100.0 %
                                                        ========   =========   ===========   =============    ===============
  
  Segment Gross Profit                                                                              Gross Profit Margin
  -------------------------------------------------                                          --------------------------------
  
  Upholstery Fabrics                                $     9,755      10,999     (11.3) %          16.8 %             16.8 %
  Restructuring related charges                               0       1,008    (100.0) %           0.0 %              1.5 %
                                                        --------   ---------   -----------   -------------    ---------------
  Pro forma Upholstery Fabrics gross profit (2)           9,755      12,007     (18.8) %          16.8 %             18.3 %
  
  Mattress Ticking                                        5,883       5,189      13.4  %          21.6 %             20.9 %
                                                        --------   ---------   -----------   -------------    ---------------
  
  Pro forma gross profit                            $    15,638      17,196      (9.1) %          18.4 %             19.0 %
                                                        ========   =========   ===========   =============    ===============
  
                                                                            TWELVE MONTHS ENDED (UNAUDITED)
                                                        ------------------------------------------------------------------------
                                                              Amounts                              Percent of Total Sales
                                                        --------------------                  --------------------------------
                                                        May 2,     April 27,     % Over        May 2,            April 27,
  Segment/Division Sales (1)                             2004        2003        (Under)        2004                2003
  -------------------------------------------------     --------   ---------   -----------   -------------    ---------------
  Upholstery Fabrics
      Culp Decorative Fabrics                       $   119,514     137,479     (13.1) %          37.6 %             40.5 %
      Culp Velvets/Prints                                87,522      96,049      (8.9) %          27.5 %             28.3 %
      Culp Yarn                                           4,758       6,459     (26.3) %           1.5 %              1.9 %
                                                        --------   ---------   -----------   -------------    ---------------
                                                        211,794     239,987     (11.7) %          66.6 %             70.7 %
  Mattress Ticking
       Culp Home Fashions                               106,322      99,659       6.7  %          33.4 %             29.3 %
                                                        --------   ---------   -----------   -------------    ---------------
  
                                                    $   318,116     339,646      (6.3) %         100.0 %            100.0 %
                                                        ========   =========   ===========   =============    ===============
  
  Segment Gross Profit                                                                              Gross Profit Margin
  -------------------------------------------------                                          --------------------------------
  
  Upholstery Fabrics                                $    34,946      34,737       0.6  %          16.5 %             14.5 %
  Restructuring related charges                               0       2,918    (100.0) %           0.0 %              1.2 %
                                                        --------   ---------   -----------   -------------    ---------------
  Pro forma Upholstery Fabrics gross profit (2)          34,946      37,655      (7.2) %          16.5 %             15.7 %
  
  Mattress Ticking                                       23,376      22,836       2.4  %          22.0 %             22.9 %
                                                        --------   ---------   -----------   -------------    ---------------
  
  Pro forma gross profit                            $    58,322      60,491      (3.6) %          18.3 %             17.8 %
                                                        ========   =========   ===========   =============    ===============
  
  (1)  International Sales and portion of total sales is: Q4 - $9.3 million FY04 (11.0%) & $10.1 million FY03 (11.2%);
       YTD - $35.4 million FY04 (11.1%) & $39.9 million FY03 (11.8%)
  (2)  Pro forma includes $1.0 and $2.9 million of restructuring related charges from the shut down of the Chattanooga operation
       for the three and twelve month period of fiscal 2003, respectively.
  CULP, INC.
                     PROFORMA CONSOLIDATED STATEMENTS OF INCOME
              FOR THE THREE MONTHS ENDED MAY 2, 2004 AND APRIL 27, 2003
                  (Amounts in Thousands, Except for Per Share Data)
  THREE MONTHS ENDED
                                              -------------------------------------------------------------------
                                              As Reported                                 May 2, 2004
                                                 May 2,    % of                 % of      Proforma Net  % of
                                                  2004      Sales   Adjustments Sales    of Adjustments  Sales
                                              ----------- --------   --------  -------     ---------   --------
  Net sales                                $      85,148   100.0%          0                 85,148     100.0%
  Cost of sales                                   69,510    81.6%          0     0.0%        69,510      81.6%
                                              ----------- --------   --------  -------     ---------   --------
              Gross profit                        15,638    18.4%          0     0.0%        15,638      18.4%
  
  Selling, general and
    administrative expenses                        9,925    11.7%          0     0.0%         9,925      11.7%
  Restructuring credit                            (1,047)   -1.2%      1,047     1.2%  (2)        0       0.0%
                                              ----------- --------   --------  -------     ---------   --------
              Income  from operations              6,760     7.9%      1,047     1.2%         5,713       6.7%
  
  Interest expense                                   988     1.2%          0     0.0%           988       1.2%
  Interest income                                    (20)    0.0%          0     0.0%           (20)      0.0%
  Other expense                                      220     0.3%          0     0.0%           220       0.3%
                                              ----------- --------   --------  -------     ---------   --------
              Income before income taxes           5,572     6.5%      1,047     1.2%         4,525       5.3%
  
  Income taxes  (1)                                1,839    33.0%        346    33.0%         1,493      33.0%
                                              ----------- --------   --------  -------     ---------   --------
  Net income (loss)                        $       3,733     4.4%        701     0.8%         3,032       3.6%
                                              =========== ========   ========  =======     =========   ========
  
  Net income (loss) per share-basic                $0.32               $0.06                  $0.26
  Net income (loss) per share-diluted              $0.32               $0.06                  $0.26
  Average shares outstanding-basic                11,531              11,531                 11,531
  Average shares outstanding-diluted              11,815              11,815                 11,815
  CULP, INC.
                     PROFORMA CONSOLIDATED STATEMENTS OF INCOME
              FOR THE THREE MONTHS ENDED MAY 2, 2004 AND APRIL 27, 2003
                  (Amounts in Thousands, Except for Per Share Data)
  THREE MONTHS ENDED
                                              -------------------------------------------------------------------------------------
                                               As Reported                                     April 27, 2003              Proforma
                                                April 27,    % of                  % of         Proforma Net    % of         % Over
                                                  2003       Sales   Adjustments   Sales       of Adjustments  Sales        (Under)
                                              ------------ -------- ------------- ------      --------------- -------      ---------
  Net sales                                $       90,406   100.0%           0                      90,406   100.0%          -5.8%
  Cost of sales                                    74,218    82.1%      (1,008)  -1.1%  (3)         73,210    81.0%          -5.1%
                                              ------------ --------- ------------ ------      --------------- -------      ---------
              Gross profit                         16,188    17.9%      (1,008)  -1.1%              17,196    19.0%          -9.1%
  
  Selling, general and
    administrative expenses                        10,324    11.4%           0    0.0%              10,324    11.4%          -3.9%
  Restructuring credit                                (25)    0.0%          25    0.0%  (4)              0     0.0%           0.0%
                                              ------------ ---------- ----------- ------      --------------- -------      ---------
              Income  from operations               5,889     6.5%        (983)  -1.1%               6,872     7.6%         -16.9%
  
  Interest expense                                  1,392     1.5%           0    0.0%               1,392     1.5%         -29.0%
  Interest income                                    (182)   -0.2%           0    0.0%                (182)   -0.2%         -89.0%
  Other expense                                       160     0.2%           0    0.0%                 160     0.2%          37.5%
                                              ------------ ---------- ----------- ------      --------------- -------      ---------
              Income before income taxes            4,519     5.0%        (983)  -1.1%               5,502     6.1%         -17.8%
  
  Income taxes  (1)                                 1,247    27.6%        (382)  38.9%               1,629    29.6%          -8.3%
                                              ------------ ---------- ----------- ------      --------------- -------      ---------
  Net income (loss)                        $        3,272     3.6%        (601)  -0.7%               3,873     4.3%         -21.7%
                                              ============ ========== =========== ======      =============== =======      =========
  
  Net income (loss) per share-basic                 $0.28               ($0.05)                      $0.34
  Net income (loss) per share-diluted               $0.28               ($0.05)                      $0.33
  Average shares outstanding-basic                 11,496               11,496                      11,496
  Average shares outstanding-diluted               11,616               11,496                      11,616
  
  Notes:
   (1)  The percent of net sales column for income taxes is calculated as a % of income (loss) before income taxes.
   (2)  The $1.0 million restructuring credit represents adjustment of accrued employee benefit and other plant closing costs related
        to the shutdown of the Chattanooga and Lumberton operations.
   (3)  The $1.0 million represents restructuring related charges for inventory markdowns and movement of equipment related to the
        Chattanooga plant closing.
   (4)  The net $25,000 credit represents the sale of manufacturing equipment that was previously written off to restructuring due
        to the Chattanooga plant closing.
  CULP, INC.
                  PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
             FOR THE TWELVE MONTHS ENDED MAY 2, 2004 AND APRIL 27, 2003
                  (Amounts in Thousands, Except for Per Share Data)
  TWELVE MONTHS ENDED (UNAUDITED)
                                                             -------------------------------------------------------------------------
                                                             As Reported                                       May 2, 2004
                                                                May 2,      % of                     % of     Proforma Net    % of
                                                                 2004       Sales     Adjustments   Sales    of Adjustments   Sales
                                                             ------------- --------   ---------- -------     -------------- --------
  Net sales                                               $       318,116   100.0%           0                     318,116   100.0%
  Cost of sales                                                   259,794    81.7%           0     0.0%            259,794    81.7%
                                                             ------------- --------   ---------- -------     -------------- --------
              Gross profit                                         58,322    18.3%           0     0.0%             58,322    18.3%
  
  Selling, general and
    administrative expenses                                        41,019    12.9%           0     0.0%             41,019    12.9%
  Restructuring credit                                             (1,047)   -0.3%       1,047     0.3%  (2)             0     0.0%
                                                             ------------- --------   ---------- -------     -------------- --------
              Income  (loss) from operations                       18,350     5.8%       1,047     0.3%             17,303     5.4%
  
  Interest expense                                                  5,528     1.7%           0     0.0%              5,528     1.7%
  Interest income                                                    (376)   -0.1%           0     0.0%               (376)   -0.1%
  Early extinguishment of debt                                      1,672     0.5%      (1,672)    0.0%  (3)             0     0.0%
  Other expense                                                       750     0.2%           0     0.0%                750     0.2%
                                                             ------------- --------   ---------- -------     -------------- --------
              Income (loss) before income taxes                    10,776     3.4%        (625)   -0.2%             11,401     3.6%
  
  Income taxes  (1)                                                 3,556    33.0%        (206)   33.0%              3,762    33.0%
                                                             ------------- --------   ---------- -------     -------------- --------
  Income (loss) before cumulative effect of
    accounting change                                               7,220     2.3%        (419)   -0.1%              7,639     2.4%
                                                             ------------- --------   ========== =======     ============== ========
  
  Cumulative effect of accounting change,
     net of income taxes                                                0                                                0
                                                             -------------            ----------             --------------
  
              Net income (loss)                          $          7,220                 (419)                      7,639
                                                             =============            ==========             ==============
  
  Basic income (loss) per share:
              Income (loss) before cumulative effect
                of accounting change                     $           0.63                (0.04)                       0.66
              Cumulative effect of accounting change                 0.00                 0.00                        0.00
                                                             -------------            ----------             --------------
  
              Net income (loss)                                      0.63                (0.04)                       0.66
                                                             =============            ==========             ==============
  
  Diluted income (loss) per share:
              Income (loss) before cumulative effect
              of accounting change                       $           0.61                (0.04)                       0.65
              Cumulative effect of accounting change                 0.00                 0.00                        0.00
                                                             -------------            ----------             --------------
              Net income (loss)                                      0.61                (0.04)                       0.65
                                                             =============            ==========             ==============
  
  Average shares outstanding-basic                                 11,525               11,525                      11,525
  Average shares outstanding-diluted                               11,777               11,525                      11,777
  CULP, INC.
                  PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
             FOR THE TWELVE MONTHS ENDED MAY 2, 2004 AND APRIL 27, 2003
                  (Amounts in Thousands, Except for Per Share Data)
  TWELVE MONTHS ENDED (UNAUDITED)
                                                        ------------------------------------------------------------------------------
                                                        As Reported                                   April 27, 2003          Proforma
                                                         April 27,    % of                   % of      Proforma Net    % of    % Over
                                                           2003       Sales    Adjustments   Sales    of Adjustments  Sales   (Under)
                                                        ----------- --------  ------------- ------    -------------- ------- ---------
  Net sales                                           $    339,646   100.0%             0                  339,646   100.0%     -6.3%
  Cost of sales                                            282,073    83.0%        (2,918)   -0.9%  (4)    279,155    82.2%     -6.9%
                                                        ----------- --------  ------------- ------    -------------- ------- ---------
              Gross profit                                  57,573    17.0%        (2,918)   -0.9%          60,491    17.8%     -3.6%
  
  Selling, general and
    administrative expenses                                 40,040    11.8%             0    0.0%           40,040    11.8%      2.4%
  Restructuring expense                                     12,981     3.8%       (12,981)  -3.8%  (5)           0     0.0%      0.0%
                                                        ----------- --------  ------------- ------    -------------- ------- ---------
              Income  (loss) from operations                 4,552     1.3%       (15,899)  -4.7%           20,451     6.0%    -15.4%
  
  Interest expense                                           6,636     2.0%             0    0.0%            6,636     2.0%    -16.7%
  Interest income                                             (596)   -0.2%             0    0.0%             (596)   -0.2%    -36.9%
  Early extinguishment of debt                                   0     0.0%             0    0.0%                0     0.0%      0.0%
  Other expense                                                805     0.2%             0    0.0%              805     0.2%     -6.8%
                                                        ----------- --------  ------------- ------    -------------- ------- ---------
              Income (loss) before income taxes             (2,293)   -0.7%       (15,899)  -4.7%           13,606     4.0%    -16.2%
  
  Income taxes  (1)                                         (1,557)    67.9%       (6,185)  38.9%            4,628    34.0%    -18.7%
                                                        ----------- --------  ------------- ------    -------------- ------- ---------
  Income (loss) before cumulative effect of
    accounting change                                 $       (736)   -0.2%        (9,714)  -2.9%            8,978     2.6%    -14.9%
                                                        ----------- --------  ------------- ------    -------------- ------- ---------
  
  Cumulative effect of accounting change,
     net of income taxes                                   (24,151)               (24,151)                       0
                                                        -----------           -------------           --------------
  
              Net income (loss)                            (24,887)               (33,865)                   8,978
                                                        ===========           =============           ==============
  
  Basic income (loss) per share:
              Income (loss) before cumulative effect
                of accounting change                 $       (0.06)                ($0.85)                    0.78
              Cumulative effect of accounting change         (2.11)                  2.11                     0.00
                                                        -----------
                                                                                                      --------------
              Net income (loss)                              (2.17)                                          $0.78
                                                        ===========                                   ==============
  
  Diluted income (loss) per share:
              Income (loss) before cumulative effect
              of accounting change                   $       (0.06)                 (0.85)                    0.77
              Cumulative effect of accounting change         (2.11)                  2.11                     0.00
                                                        -----------
              Net income (loss)                              (2.17)                                          $0.77
                                                        ===========                                   ==============
  
  Average shares outstanding-basic                          11,462                 11,462                   11,462
  Average shares outstanding-diluted                        11,462                 11,462                   11,712
  
  Notes:
   (1)  The percent of net sales column for income taxes is calculated as a % of income (loss) before income taxes.
   (2)  The $1.0 million restructuring credit represents adjustment of accrued employee benefit and other plant closing costs related
        to the shutdown of the Chattanooga and Lumberton operations.
   (3)  The $1.7 million charge represents premium and fees paid to reduce the private placement loan balance.
   (4)  The $2.9 million represents restructuring related charges for inventory markdowns and movement of equipment relating to the
        Chattanooga plant closing.
   (5)  The $13.0 million represents restructuring charges for the shut down of the Chattanooga operation, $12.1 million, and the
        additional write-down of wet printed assets held for sale, $1.3 million, offset by a restructuring credit of $354,000 for
        over accrued employee benefit and plant security costs.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
        for the three and twelve months ended May 2, 2004 and April 27, 2003
  
  OVERVIEW
  
  Highlights for the fourth quarter and fiscal year ended May 2, 2004, include:
  
       Gross profit margin of 18.4% for the quarter and 18.3% for the fiscal year
  
       Mattress ticking sales up 9.4% for the quarter and nearly 7.0% for the
         fiscal year
  
       Debt-to-capital ratio reduced to 33.0%, the lowest level for Culp since
         fiscal 1993
  
       Free cash flow of $15.4 million for the fiscal year
  
  GENERAL -- For the fourth  quarter of fiscal 2004,  net sales  decreased 5.8% to
  $85.1 million; and the company reported net income of $3.7 million, or $0.32 per
  share  diluted,  compared  with net income of $3.3  million,  or $0.28 per share
  diluted, in the fourth quarter of fiscal 2003. Excluding  restructuring credits,
  earnings for the fourth  quarter of fiscal 2004 were $3.0 million,  or $0.26 per
  share diluted, versus net income of $3.9 million, or $0.33 per share diluted, in
  the  fourth  quarter  of fiscal  2003.  For  fiscal  2004 as a whole,  net sales
  decreased 6.3% to $318.1  million;  and the company  reported net income of $7.2
  million, or $0.61 per share diluted,  versus a net loss before cumulative effect
  of  accounting  change of  $736,000,  or $0.06 per  share  diluted,  a year ago.
  Including the cumulative  effect of accounting  change,  the company  reported a
  loss of $2.17 per share for fiscal  2003.  Excluding  restructuring  credits and
  charges for early  extinguishment  of debt,  net income for fiscal 2004 was $7.6
  million,  or $0.65 per share  diluted,  versus $9.0 million,  or $0.77 per share
  diluted, for fiscal 2003.
  
  INCOME STATEMENT COMMENTS
  
       UPHOLSTERY FABRICS SEGMENT (See page 5 - Sales and Gross Profit by Segment)
  
       Net Sales -- Upholstery  fabric sales for the fourth quarter of fiscal 2004
  decreased  11.6% to $57.9 million when compared to the fourth  quarter of fiscal
  2003,  primarily  reflecting a decline in orders in the Culp Decorative  Fabrics
  (CDF) division  related to consumer  preference for leather and competition from
  imported fabrics, including cut and sewn kits.
  
  With the company's offshore sourcing efforts,  including the China platform, the
  company is  experiencing  higher sales of upholstery  fabric  products  produced
  outside of the company's U.S.  manufacturing  plants. These sales, which include
  microdenier suedes, accounted for approximately 10.7% of upholstery fabric sales
  for the fourth quarter of fiscal 2004,  more than double the percentage from the
  year earlier quarter.
  
  Upholstery  fabric yards sold during the fourth quarter were 13.3 million versus
  16.0 million in the fourth  quarter of fiscal 2003, a decline of 16.9%.  Average
  selling price was $4.23 per yard for the fourth quarter  compared with $3.98 per
  yard in the same  quarter of last year,  an increase of 6.3%,  due  primarily to
  higher average selling prices in the Culp Decorative Fabrics division.
  
       Gross Profit -- Gross profit for the fourth quarter of fiscal 2004 was $9.8
  million,  or 16.8% margin,  versus $11.0 million,  or 16.8% margin, for the same
  quarter of last year. Excluding  restructuring  related charges of $1.0 million,
  which were included in cost of sales in last year's fourth quarter, gross profit
  dollars and margins were $12.0 million and 18.3%, respectively.  The decrease in
  gross  profit and margins  primarily  reflects  lower sales  volume  within CDF,
  coupled with lower capacity utilization.
  
       China  Operations -- During the fourth  quarter of fiscal 2004, the company
  began incoming  fabric  inspection and testing,  and started  shipping fabric to
  customers.  Finishing operations also began in the fourth quarter of this fiscal
  year. As expected,  the company experienced modest operating losses in its China
  operation during the current fiscal year.
  
       MATTRESS TICKING SEGMENT (See page 5 - Sales and Gross Profit by Segment)
  
       Net Sales -- Mattress  ticking sales for the fourth  quarter of fiscal 2004
  increased 9.4% to $27.2  million,  due to better  industry  demand and continued
  gains with key  customers.  The 6.7% fiscal  year sales gain in this  segment is
  especially   noteworthy  because  it  occurred  during  the  bedding  industry's
  transition to selling predominantly  one-sided  mattresses,  which utilize about
  one-third  less  mattress  ticking.  This  transition  at  retail  began in late
  calendar year 2002 and is expected to continue through early calendar year 2005.
  
  Mattress  ticking yards sold during the fourth  quarter of fiscal 2004 were 11.6
  million compared with 10.1 million yards in the fourth quarter of last year. The
  average  selling  price was $2.33 per yard for the fourth  quarter,  compared to
  $2.45 per yard in the same quarter last year.
  
       Gross Profit -- For the fourth quarter of fiscal 2004, the mattress ticking
  segment  reported  gross  profit  dollars and margins of $5.9 million and 21.6%,
  respectively,  compared  with $5.2 million and 20.9% for the same period of last
  year.  The loss in margin  due to a lower  average  selling  price was more than
  offset by improved operating efficiencies and lower fixed costs.
  
       SG&A  EXPENSES  -- SG&A  expenses of $9.9  million  for the fourth  quarter
  decreased  approximately  $399,000,  or 3.9%,  from the prior year amount.  As a
  percent of net sales, SG&A expenses  increased  slightly to 11.7% from 11.4% the
  previous year, due to higher professional fees and lower sales.
  
       INTEREST  EXPENSE AND  INTEREST  INCOME -- Interest  expense for the fourth
  quarter  declined to $988,000  from $1.4 million the previous  year due to lower
  borrowings  outstanding.  Interest income decreased to $20,000 from $182,000 the
  previous  year due to lower  interest  rates  earned  in  fiscal  2004 and lower
  invested balances.
  
       INCOME TAXES -- The  effective  tax rate (taxes as a  percentage  of pretax
  income  (loss)) for fiscal 2004 was 33.0%  compared  with 67.9% for fiscal 2003.
  The higher rate for the prior period reflects the increased tax benefits related
  to the  company's  loss in the U.S.  resulting  from the  restructuring  charges
  recorded in the second quarter of fiscal 2003.  Excluding the cumulative  effect
  of accounting change and  restructuring  and related charges,  the effective tax
  rate for fiscal 2003 was 34.0%.
  
  BALANCE SHEET COMMENTS
  
       CASH, CASH EQUIVALENTS AND SHORT-TERM  INVESTMENTS - Cash, cash equivalents
  and  short-term  investments  as of May 2, 2004  decreased to $14.6 million from
  $24.4  million  at the end of fiscal  2003,  reflecting  free cash flow of $15.4
  million for fiscal 2004,  and the $25 million  prepayment  of the  company's $75
  million  outstanding  senior notes (see additional  discussion of free cash flow
  and debt below).
  
       WORKING  CAPITAL -- Accounts  receivable as of May 2, 2004  decreased  4.8%
  from the year-earlier  level,  principally due to lower sales volume. Days sales
  outstanding totaled 33 days at May 2, 2004, the same as for the same period last
  fiscal year.  Inventories at the close of the fourth quarter decreased 1.0% from
  a year ago.  Inventory  turns for the fourth quarter were 5.5 versus 5.7 for the
  year-earlier   period.   Operating   working  capital   (comprised  of  accounts
  receivable,  inventories and trade accounts payable) was $64.4 million at May 2,
  2004, up from $61.9 million a year ago.
  
       PROPERTY,  PLANT AND EQUIPMENT -- Capital spending for fiscal 2004 was $6.7
  million,  including  approximately $3.0 million for manufacturing  equipment and
  leasehold  improvements  related  to the China  operation.  This  compares  with
  capital spending of $12.2 million in fiscal 2003. Depreciation was $13.6 million
  compared  to $14.0  million  for fiscal  2003.  For  fiscal  2005,  the  company
  anticipates capital  expenditures to be approximately $9.0 million,  and expects
  depreciation to be comparable to fiscal 2004.
  
       INTANGIBLE  ASSETS -- As of May 2, 2004,  $9.2  million in  goodwill is the
  company's only intangible  asset. As of April 29, 2002, the company adopted SFAS
  No. 142 and recognized an impairment  charge of $37.6 million ($24.2 million net
  of taxes of $13.4  million)  during  the  first  quarter  of  fiscal  2003.  The
  remaining  goodwill is comprised of $4.1 million related to the mattress ticking
  segment,  and $5.1  million  related  to CDF,  which  is part of the  upholstery
  fabrics segment.
  
       LONG-TERM  DEBT  -- The  company's  long-term  debt  of  $51.0  million  is
  unsecured and is comprised of $50.0 million in outstanding  senior notes, with a
  fixed interest rate of 7.76%, and a $1.0 million, non-interest bearing term loan
  with the  Canadian  government.  Additionally,  the company has a $15.0  million
  revolving  credit line with a bank, of which no balance is outstanding at May 2,
  2004. The bank agreement  expires in August 2004. The first scheduled  principal
  payment  on the $50  million  term loan is due March  2006 in the amount of $7.5
  million.  The  Canadian  government  loan is repaid in  annual  installments  of
  approximately  $500,000  per  year.  The  company  was in  compliance  with  all
  financial covenants in its loan agreements as of May 2, 2004.
  
  FREE CASH FLOW COMMENTS
  
       Free cash flow (see  reconciliation  on page 3 of this  release)  was $15.4
  million for fiscal 2004,  compared  with $23.0  million for the same period last
  year.  This decrease is primarily due to less cash flow  generated  from working
  capital and higher payments on vendor-financed capital expenditures.
  
  BUSINESS OUTLOOK
  
       The first  quarter of fiscal 2005 will include 13 weeks versus 14 weeks for
  the same  quarter last year.  The first  quarter of the  company's  fiscal year,
  which includes the summer  months,  is typically the slowest period for Culp and
  the furniture industry due to scheduled plant vacation shutdowns. The company is
  experiencing a definite slowdown in orders as a result of weaker retail activity
  throughout the furniture industry. Given these factors, the company expects that
  first  quarter  consolidated  sales,  as compared to the same quarter last year,
  will decrease  more than the 5.8%  experienced  in the fourth  quarter of fiscal
  2004.  Mattress  ticking  segment sales are expected to approximate the sales in
  the same quarter of last year.  Upholstery  fabric segment sales are expected to
  decline  from the same quarter of last year more than the 11.6%  experienced  in
  the fourth quarter of fiscal 2004, due primarily to softness in incoming  orders
  for CDF.
  
  Based on these sales  expectations  and the lower gross profit in the upholstery
  fabrics segment,  and considering the seasonal slowdown and industry conditions,
  the  company  expects  to  report a net loss in the  range of $0.08 to $0.13 per
  diluted  share for the  first  quarter  of  fiscal  2005,  with  actual  results
  primarily depending upon the level of demand throughout the quarter.
  
  Management remains optimistic that upholstery fabric sales will start to pick up
  in the fall, as is seasonally  typical in the furniture  industry.  However,  if
  sales  continue  to  be  under  pressure  in  the  upholstery  fabrics  segment,
  management  is prepared to take the  necessary  actions to adjust the  company's
  cost structure and  rationalize  capacity,  as has been  demonstrated  in recent
  years.  Management  believes that the continued strength in the mattress ticking
  business,  the focused  efforts to develop  offshore  sourcing  initiatives  and
  proven ability to generate free cash flow are fundamental competitive advantages
  for Culp.