content: SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549
  
                                     ---------
  
                                     Form 8-K
  
                                  CURRENT REPORT
  
                 Pursuant to Section 13 or 15(d) of the Securities
                               Exchange Act of 1934
  
                                   -------------
  
           Date of Report (Date of earliest event reported) June 3, 1998
  
                                     CULP, INC.
  
              (Exact name of registrant as specified in its charter)
  
  
          North Carolina                  0-12781                56-1001967
  
   (State or other jurisdiction    (Commission File No.)       (IRS Employer
         of incorporation)                                  Identification No.)
  
  
  
                               101 South Main Street
                         High Point, North Carolina  27260
                     (Address of principal executive offices)
                                  (336) 889-5161
               (Registrant's telephone number, including area code)
  
  
  
  
                                                                                
           (Former name or former address, if changed since last report)
  
  
  
  
  
  -------------------------------------------------------------------------------
  
  
  
  
  
  <PAGE>
  
  
  Item 5. Other Events
  
  See  attached  Press  Release (3 pages) and  Financial  Information  Release (12
  pages),  both dated June 3, 1998,  related to the fourth  quarter and year ended
  May 3, 1998.
  
  Forward  Looking  Information.  This Report  contains  statements  that could be
  deemed   "forward-looking   statements"   within  the  meaning  of  the  federal
  securities  laws,   which  statements  are  inherently   subject  to  risks  and
  uncertainties.   Forward-looking   statements   are   statements   that  include
  projections,   expectations  or  beliefs  about  future  events  or  results  or
  otherwise are not  statements  of historical  fact.  Such  statements  are often
  characterized  by  qualifying  words such as  "expect,"  "believe,"  "estimate,"
  "plan" and "project"  and their  derivatives.  Factors that could  influence the
  matters  discussed in such  statements  include the level of housing  starts and
  sales of existing homes,  consumer confidence,  trends in disposable income, and
  general  economic  conditions.  Decreases  in these  economic  indicators  could
  have a  negative  effect on the  Company's  business  and  prospects.  Likewise,
  increases in interest rates,  particularly  home mortgage  rates,  and increases
  in consumer debt or the general rate of inflation,  could  adversely  affect the
  Company.  In  addition,  the  value  of the  U.  S.  dollar  relative  to  other
  currencies  can  affect  the   competitiveness  of  the  Company's  products  in
  international markets.
   
  
  
                                    SIGNATURES
  
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
   
                                      CULP, INC.
                                      (Registrant)
  
  
                                By:    Franklin N. Saxon                          
                                       Senior Vice President and
                                       Chief Financial Officer
  
  
                                By:    Phillip W. Wilson                          
                                       Director of Finance
  
  
  
  
  Dated:   June 3, 1998
  
  <PAGE>
  
  
                                       -MORE-
  
  
  
  
  
  FOR IMMEDIATE RELEASE
  
               CULP REPORTS RECORD SALES AND EARNINGS FOR FISCAL 1998
                                      ----------
                     FOURTH QUARTER REFLECTS PRESSURE ON MARGINS
  
  HIGH POINT, N. C. (June 3, 1998) - Culp, Inc.  (NYSE:CFI)  today reported higher
  sales  and  earnings  for the  fiscal  year  ended  May 3,  1998.  Although  the
  company  reported lower earnings for the fourth fiscal quarter,  the results for
  the full year marked the ninth consecutive year of record earnings for Culp.
  
        For the 1998 fiscal year,  net sales totaled $476.7  million,  up 20% from
  $398.9  million  in  fiscal  1997.  Net  income  for the year  rose 13% to $15.5
  million,  or $1.19 per share diluted,  up from $13.8 million, or $1.15 per share
  diluted, in fiscal 1997.
  
        Net sales for the quarter  increased 29% to $135.8  million  compared with
  $105.7  million a year ago.  Net income for the quarter  totaled  $4.2  million,
  or $0.31 per share  diluted,  compared  with  $4.8  million,  or $0.38 per share
  diluted, in the fourth quarter of fiscal 1997.
  
        The  Company's  effective  tax rate for fiscal 1998 was 29% compared  with
  36% a year ago. The lower rate was due  principally  to  increased  tax benefits
  related  to the  Company's  international  sales.  The  reduced  tax  rate  also
  reflected  a  higher   proportion  of  earnings  from  the  Company's   Canadian
  subsidiary that is taxed at a lower effective rate.
  
        "Net  sales,  net income and  earnings  per share each set new records for
  fiscal 1998 as a whole,"  said Robert G. Culp,  III,  chief  executive  officer.
  "Culp's  financial  performance  for the full  year  marks an  extension  of our
  long-term  record of growth.  At the same time,  several factors  contributed to
  some  pressure  on  profitability  that  was  reflected  in  our  fourth-quarter
  results.  One of the most  significant  developments  related to the $95 million
  that we invested  during  fiscal  1998 to support  Culp's  progress  through the
  acquisition  of  additional  complementary  business  units and various  capital
  projects   intended  to  expand,   modernize   and   vertically   integrate  our
  operations.  Although  assimilation  of the  acquisitions  and completion of the
  capital  projects  have  generally  proceeded  as planned,  we have  experienced
  production   inefficiencies   related  to  the  start-up  of  several  of  these
  initiatives.   We  believe  these   variances  will  prove   temporary  and  are
  confident about realizing a sound long-term return from these investments."
  <PAGE>
  
  Culp Reports Record Earnings For Fiscal 1998
  Page 3
  June 3, 1998
  
  
        Culp added,  "Incoming  orders for our  upholstery  fabrics  and  mattress
  ticking are generally  favorable at present.  One product  category where demand
  has decidedly slowed,  however,  is printed flock upholstery  fabrics.  This has
  been  one of our  fastest-growing  product  groups,  stimulated  by  significant
  growth in demand  from  international  markets;  notably,  portions  of  Eastern
  Europe and Asia. We  accordingly  focused a meaningful  part of our expansion on
  additional  capacity  for these  fabrics.  Although  we believe  the longer term
  outlook  is good  for  increasing  shipments  of  these  fabrics,  the  economic
  difficulties  that many of these regions are  experiencing at present are having
  an  understandably  adverse  impact  on  demand  for  home  furnishings  and our
  fabrics.  We are  re-directing  our  marketing  activities  to other  geographic
  areas and expect to realize improved results as fiscal 1999 develops."
  
        "As we start fiscal 1999, we are  encouraged  about the momentum that Culp
  has  established  in the  development  of new  patterns  and  textures  for  our
  upholstery  fabrics  and  mattress  ticking.  Our  completion  of the  Howard L.
  Dunn,  Jr. design center during fiscal 1998  epitomized the key role that design
  has in our  business.  We  have  been  fortunate  to add a  number  of  talented
  designers with solid  reputations  and a willingness  to test new concepts.  The
  design  teams now have a truly  state-of-the-art  facility,  and we are  pleased
  with their  accomplishments  to date.  The backdrop of high consumer  confidence
  and stable  mortgage  rates  presents a favorable  environment  for  spending on
  home  furnishings  in the United  States.  We are thus  optimistic  about Culp's
  prospects for continued  progress in fiscal 1999 as a whole.  We recognize  that
  the  first  half  of  the  year  will  be  challenging   and  believe  that  the
  year-to-year improvement will be more likely to occur during the second half."
  
        Culp  concluded,  "Purchases  of existing  operations  and other  physical
  assets  have been an  integral  component  of our growth for more than a decade.
  Although we expect to  maintain  an active  capital  investment  program  during
  fiscal  1999,  the planned  spending  of $15 million  will be less than half the
  $36 million spend in fiscal 1998.  Our primary  focus will be the  maturation of
  the  projects  that  have  either  been  or  are  nearing   completion.   Culp's
  profitability  has enabled us to support these  investments  while maintaining a
  solid  financial  position.  Our funded  debt/capital  ratio  totaled 54% at the
  close of fiscal 1998 with  borrowings  of $30 million  against our $100  million
  line  of  credit.   During  the  fourth  quarter,   we  enhanced  our  financial
  flexibility  further by  closing a private  placement  of $75  million in senior
  unsecured notes with a fixed rate of 6.76% for 10 years."
  
        Culp is the  world's  largest  manufacturer  and  marketer  of  upholstery
  fabrics  for  furniture  and is a  leading  producer  of  mattress  ticking  for
  bedding.  The  Company's  fabrics  are used  principally  in the  production  of
  residential and commercial furniture and bedding products.
  
  
  <PAGE>
  
  This  Release  contains   statements  that  could  be  deemed   "forward-looking
  statements"   within  the  meaning  of  the  federal   securities   laws,  which
  statements are inherently  subject to risks and  uncertainties.  Forward-looking
  statements  are statements  that include  projections,  expectations  or beliefs
  about future  events or results or otherwise  are not  statements  of historical
  fact.  Such  statements  are often  characterized  by  qualifying  words such as
  "expect,"  "believe,"  "estimate,"  "plan" and "project" and their  derivatives.
  Factors that could influence the matters  discussed in such  statements  include
  the level of housing starts and sales of existing  homes,  consumer  confidence,
  trends in  disposable  income,  and general  economic  conditions.  Decreases in
  these  economic  indicators  could  have a  negative  effect  on  the  Company's
  business and  prospects.  Likewise,  increases in interest  rates,  particularly
  home  mortgage  rates,  and  increases  in consumer  debt or the general rate of
  inflation,  could adversely  affect the Company.  In addition,  the value of the
  U.S. dollar relative to other currencies can affect the  competitiveness  of the
  Company's products in international markets.
  
                                     CULP, INC.
                           Condensed Financial Highlights
  
                                                       Three Months Ended     
                                                     May 3,         April 27,
                                                     1998             1997    
   
  Net sales                                      $135,834,000      $105,678,000
  Net income                                        4,156,000         4,840,000
  Earnings per share
    Basic                                        $       0.32      $       0.39
    Diluted                                      $       0.31      $       0.38
  Average shares outstanding
    Basic                                          12,993,000        12,546,000
    Diluted                                        13,284,000        12,856,000
  
                                                       Fiscal Year Ended      
                                                     May 3,          April 27,
                                                     1998              1997   
   
  Net sales                                      $476,715,000      $398,879,000
  Net income                                       15,513,000        13,770,000
  Earnings per share
    Basic                                        $       1.22      $       1.18
    Diluted                                      $       1.19      $       1.15
  Average shares outstanding
    Basic                                          12,744,000        11,624,000
    Diluted                                        13,042,000        11,929,000
                                        -END-
  <PAGE>
  
  
  
                         CULP, INC. FINANCIAL INFORMATION RELEASE
                              CONSOLIDATED INCOME STATEMENTS
         FOR THREE MONTHS AND TWELVE MONTHS ENDED MAY 3, 1998 AND APRIL 27, 1997
  
                    (Amounts in Thousands, Except for Per Share Data)
  
  <TABLE>
  <CAPTION>
                                             THREE MONTHS ENDED (UNAUDITED)
                                 --------------------------------------------------------
  
                                       Amounts                         Percent of Sales
                                 ---------------------                --------------------
                                  May 3,    April 27,    % Over
                                   1998       1997      (Under)        1998       1997
                                 ---------- ----------  ---------     ---------  ---------
  
  <S>                          <C>            <C>         <C>           <C>        <C>    
  Net sales                    $   135,834    105,678     28.5 %        100.0 %    100.0 %
  Cost of sales                    112,644     85,386     31.9 %         82.9 %     80.8 %
                                 ---------- ----------  ---------     ---------  ---------
        Gross profit                23,190     20,292     14.3 %         17.1 %     19.2 %
  
  Selling, general and
    administrative expenses         15,277     11,730     30.2 %         11.2 %     11.1 %
                                 ---------- ----------  ---------     ---------  ---------
        Income from operations       7,913      8,562     (7.6) %         5.8 %      8.1 %
  
  Interest expense                   1,837      1,019     80.3 %          1.4 %      1.0 %
  Interest income                      (69)       (90)   (23.3) %        (0.1) %    (0.1) %
  Other expense (income), net          753        404     86.4 %          0.6 %      0.4 %
                                 ---------- ----------  ---------     ---------  ---------
        Income before income taxes   5,392      7,229    (25.4) %         4.0 %      6.8 %
  
  Income taxes  *                    1,236      2,389    (48.3) %        22.9 %     33.0 %
                                 ---------- ----------  ---------     ---------  ---------
         Net income             $    4,156      4,840    (14.1) %         3.1 %      4.6 %
                                 ========== ==========  =========     =========  =========
  
  Net income per share               $0.32      $0.39    (17.9) %
  Net income per share               
  (assuming dilution)                $0.31      $0.38    (18.4) %
  Dividends per share              $0.0350    $0.0325      7.7 %
  Average shares outstanding        12,993     12,546      3.6 %
  Average shares outstanding        
  (assuming dilution)               13,284     12,856      3.3 %
  
  
  
                                                   TWELVE MONTHS ENDED
                                 --------------------------------------------------------
  
                                       Amounts                         Percent of Sales
                                 ---------------------                --------------------
                                  May 3,    April 27,    % Over
                                   1998       1997      (Under)        1998       1997
                                 ---------- ----------  ---------     ---------  ---------
  
  Net sales                    $   476,715    398,879     19.5 %        100.0 %    100.0 %
  Cost of sales                    393,154    326,394     20.5 %         82.5 %     81.8 %
                                 ---------- ----------  ---------     ---------  ---------
        Gross profit                83,561     72,485     15.3 %         17.5 %     18.2 %
  
  Selling, general and
    administrative expenses         52,987     45,058     17.6 %         11.1 %     11.3 %
                                 ---------- ----------  ---------     ---------  ---------
        Income from operations      30,574     27,427     11.5 %          6.4 %      6.9 %
  
  Interest expense                   7,117      4,671     52.4 %          1.5 %      1.2 %
  Interest income                     (304)      (280)     8.6 %         (0.1) %    (0.1) %
  Other expense (income), net        1,912      1,521     25.7 %          0.4 %      0.4 %
                                 ---------- ----------  ---------     ---------  ---------
        Income before income taxes  21,849     21,515      1.6 %          4.6 %      5.4 %
        
  Income taxes  *                    6,336      7,745    (18.2) %        29.0 %     36.0 %
                                 ---------- ----------  ---------     ---------  ---------
        Net income             $    15,513     13,770     12.7 %          3.3 %      3.5 %
                                 ========== ==========  =========     =========  =========
  
  Net income per share               $1.22      $1.18      3.4 %
  Net income per share              
  (assuming dilution)                $1.19      $1.15      3.5 %
  Dividends per share                $0.14      $0.13      7.7 %
  Average shares outstanding        12,744     11,624      9.6 %
  Average shares outstanding       
  (assuming dilution)               13,042     11,929      9.3 %
  
  * Percent of sales column is calculated as a % of income before income taxes.
  
  </TABLE>
  <PAGE>
  
                           CULP, INC. FINANCIAL INFORMATION RELEASE
                                  CONSOLIDATED BALANCE SHEETS
                                MAY 3, 1998 AND APRIL 27, 1997
  
                                    (Amounts in Thousands)
  
  <TABLE>
  <CAPTION>
                                                      Amounts                 Increase
                                             ---------------------------
                                                May 3,      April 27,        (Decrease)
                                                                        ----------------------
                                                  1998          1997      Dollars      Percent
                                              -------------- ----------- ----------    --------
  Current assets
  <S>                                       <C>                 <C>      <C>          <C>    
       Cash and cash investments            $         2,312         830      1,482     178.6 %
       Accounts receivable                           73,773      56,691     17,082      30.1 %
       Inventories                                   78,594      53,463     25,131      47.0 %
       Other current assets                           7,808       5,450      2,358      43.3 %
                                              -------------- ----------- ----------    --------
               Total current assets                 162,487     116,434     46,053      39.6 %
                                                                         
  Restricted investments                              4,021      11,018     (6,997)    (63.5)%
  Property, plant & equipment, net                  128,805      91,231     37,574      41.2 %
  Goodwill                                           55,162      22,262     32,900     147.8 %
  Other assets                                        4,340       3,007      1,333      44.3 %
                                              -------------- ----------- ----------    --------
                                                                                       
               Total assets                 $       354,815     243,952    110,863      45.4 %
                                              ============== =========== ==========    ========
  
                                                                                       
                                                                                       
  Current liabilities
       Current maturities of long-term debt $        3,325         100      3,225    3,225.0%
       Accounts payable                             37,214      29,903      7,311      24.4 %
       Accrued expenses                             17,936      15,074      2,862      19.0 %
       Income taxes payable                          1,282       1,580       (298)    (18.9)%
                                             -------------- ----------- ----------    --------
               Total current                        59,757      46,657     13,100      28.1 %
               liabilities
                                                                                       
  Long-term debt                                   152,312      76,541     75,771      99.0 %
                                                            
  Deferred income taxes                             11,227       9,965      1,262      12.7 %
                                             -------------- ----------- ----------    --------
               Total liabilities                   223,296     133,163     90,133      67.7 %
                                                                                       
  Shareholders' equity                             131,519     110,789     20,730      18.7 %
                                             -------------- ----------- ----------    --------
                                                                                       
               Total liabilities and                                                   
               shareholders' equity        $       354,815     243,952    110,863      45.4 %
                                             ============== =========== ==========    ========
                                                                                       
  Shares outstanding                                13,007      12,609        398       3.2 %
                                             ============== =========== ==========    ========
  </TABLE>
  <PAGE>
  
  
                                     CULP, INC.
                            FINANCIAL INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED MAY 3, 1998 AND APRIL 27, 1997
                               (Amounts in Thousands)
  
  <TABLE>
  <CAPTION>
  
                                                               TWELVE MONTHS ENDED
                                                              ----------------------
                                                                     Amounts
                                                              ----------------------
                                                                May 3,    April 27,
                                                                 1998       1997
                                                              ----------- ----------
  Cash flows from operating activities:                                    
  <S>                                                      <C>             <C>   
      Net income                                           $      15,513     13,770
      Adjustments to reconcile net income to net
        cash provided by operating activities:
           Depreciation                                           14,808     12,688
           Amortization of intangible assets                       1,371        810
           Provision for deferred income taxes                     1,416        966
           Changes in assets and liabilities, net of
           effects of payments for businesses acquired:
             Accounts receivable                                 (13,207)    (4,653)
             Inventories                                         (17,684)    (6,068)
             Other current assets                                   (660)      (348)
             Other assets                                           (380)      (205)
             Accounts payable                                      6,477      2,586
             Accrued expenses                                      1,506      2,510
             Income taxes payable                                   (298)     1,383
                                                              ----------- ----------
                Net cash provided by operating activities          8,862     23,439
                                                              ----------- ----------
  Cash flows from investing activities:                                    
      Capital expenditures                                       (35,879)   (26,958)
      Purchases of restricted investments                         (8,770)    (9,770)
      Purchase of investments to fund deferred                    
      compensation liability                                        (581)      (563)
      Sale of restricted investments                              15,767      4,002
      Payments for businesses acquired                           (42,966)         0
                                                              ----------- ----------
                Net cash used in investing activities            (72,429)   (33,289)
                                                              ----------- ----------
  Cash flows from financing activities:                                    
      Proceeds from issuance of long-term debt                    86,246     54,500
      Principal payments on long-term debt                       (17,100)   (59,900)
      Change in accounts payable-capital expenditures             (2,873)         9
      Dividends paid                                              (1,786)    (1,513)
      Proceeds from common stock issued                              562     17,086
                                                              ----------- ----------
                Net cash provided by financing activities         65,049     10,182
                                                              ----------- ----------
                                                                           
  Increase in cash and cash investments                            1,482        332
                                                                           
  Cash and cash investments at beginning of period                   830        498
                                                              ----------- ----------
                                                                           
  Cash and cash investments at end of period               $       2,312        830
                                                              =========== ==========
  
  </TABLE>
  <PAGE>
  
                          CULP, INC. FINANCIAL INFORMATION RELEASE
                                     FINANCIAL ANALYSIS
                                         MAY 3, 1998
  <TABLE>
  <CAPTION>
  
                                                      
                                   FISCAL 97                FISCAL 98
                                   --------  ---------------------------------------   ---------
                                      Q4         Q1        Q2        Q3        Q4         LTM
                                   --------  ---------------------------------------   ---------
  
  INVENTORIES
  <S>                                <C>         <C>       <C>       <C>       <C>
        Inventory turns                 6.6         5.8       6.1       5.4      5.9
  
  RECEIVABLES
        Days sales in receivables       49          50        55        52       49
        Percent current & less
        than 30 days past due         99.1%       95.0%     97.8%     94.1%     96.6%
        
  WORKING CAPITAL
        Current  ratio                  2.5         3.6        2.9       3.0       2.7
        Working capital turnover (4)    5.3         5.1        4.8       4.7       4.7
        Operating working capital (4) $80,251    $94,647    $107,797  $112,220  $115,153
      
  PROPERTY, PLANT & EQUIPMENT
        Depreciation rate               7.5%        7.1%      7.4%      7.4%      7.4%
        Percent property, plant &
          equipment are depreciated    47.4%       46.8%     45.3%     44.8%     42.6%
        Capital expenditures         $26,958 (1)  $9,153   $10,063    $8,967    $7,696
       
  PROFITABILITY
        Return on average total capital 11.7%        7.6%     10.0%      8.3%      7.7%        8.4%
        Return on average equity        20.9%       10.2%     15.6%     13.4%     13.1%       13.0%
        Net income per share            $0.39       $0.23     $0.36     $0.32     $0.32       $1.22
        Net income per share (diluted)  $0.38       $0.22     $0.35     $0.31     $0.31       $1.19
       
  
  LEVERAGE (3)
        Total liabilities/equity       120.2%      123.1%    172.0%    169.2%    169.8%
        Funded debt/equity              59.2%       77.4%    111.7%    116.1%    115.3%
        Funded debt/capital employed    37.2%       43.6%     52.8%     53.7%     53.5%
        Funded debt                   $65,623     $87,930  $131,833  $141,223  $151,616
        Funded debt/EBITDA (LTM) (6)     1.67        2.18      2.83      2.95      3.21
        EBITDA/Interest expense,net(LTM) 9.0         9.1       8.5       7.5        6.6 
  
  OTHER
        Book value per share            $8.79       $8.98     $9.30     $9.58    $10.11
        Employees at quarter end        3,146       3,180     3,554     3,771     4,334
        Sales per employee (annualized)$134,000    $125,000  $146,000  $129,000  $134,000
        Capital employed (3)           $176,412    $201,467  $249,838  $262,836  $283,135
        Effective income tax rate        33.0%       35.0%     35.0%     22.2%     22.9%
        EBITDA (2)                      $11,582      $9,012   $12,643   $11,390   $11,796     $44,841
        EBITDA/net sales                 11.0%        9.1%     10.3%      9.6%      8.7%        9.4%
        
    (1) Expenditures for entire year
    (2) Earnings before interest, income taxes,and depreciation & amortization.
    (3) Long-term debt, funded debt and capital employed are all net of restricted investments.
    (4) Working capital for this calculation is accounts receivable, inventories and accounts payable.
    (5) LTM represents "Latest Twelve Months"
    (6) EBITDA includes pro forma amounts for Phillips, Wetumpka and Artee
        acquisitions in Qtr 2, Qtr 3 and Qtr 4 of fiscal 1998.
  
  </TABLE>
  <PAGE>
  
                    CULP, INC. FINANCIAL INFORMATION RELEASE
                     SALES BY PRODUCT CATEGORY/BUSINESS UNIT
     FOR THREE MONTHS AND TWELVE MONTHS ENDED MAY 3, 1998 AND APRIL 27, 1997
  
  
                               (Amounts in thousands)
  <TABLE>
  <CAPTION>
                                       THREE MONTHS ENDED (UNAUDITED)
                             ---------------------------------------------------
                                  Amounts                     Percent of Total
                                                                   Sales
                             ------------------              -------------------
                             May 3,    April 27,   % Over
                              1998      1997      (Under)    1998      1997
  
  Product Category/Business Unit
  -------------------------  --------  --------  ----------  --------  ---------
  Upholstery Fabrics
  <S>                      <C>          <C>       <C>        <C>        <C>   
      Culp Textures        $  25,521    23,027    10.8 %     18.8 %     21.8 %
      Rossville/Chromatex     23,897    20,672    15.6 %     17.6 %     19.6 %
                             --------  --------  ----------  --------  ---------
                              49,418    43,699    13.1 %     36.4 %     41.4 %
  
      Velvets/Prints          45,044    40,980     9.9 %     33.2 %     38.8 %
  
      Phillips                10,737         0   100.0 %      7.9 %      0.0 %
                             --------  --------  ----------  --------  ---------
                             105,199    84,679    24.2 %     77.4 %     80.1 %
  
  Mattress Ticking
      Culp Home Fashions      23,520    20,999    12.0 %     17.3 %     19.9 %
  
  Yarn
     Artee                     7,115         0   100.0 %      5.2 %      0.0 %
                             --------  --------  ----------  --------  ---------
  
                         * $ 135,834   105,678    28.5 %     100.0%    100.0 %
                             ========  ========  ==========  ========  =========
  
  
                                            TWELVE MONTHS ENDED
                             ---------------------------------------------------
  
                                  Amounts                     Percent of Total
                                                                   Sales
                             ------------------              -------------------
                             May 3,    April 27,  % Over
                              1998      1997      (Under)    1998      1997
  
  Product Category/Business Unit
  -------------------------  --------  --------  ----------  --------  ---------
  Upholstery Fabrics
      Culp Textures        $  92,727    88,218     5.1 %     19.5 %     22.1 %
      Rossville/Chromatex     84,740    79,512     6.6 %     17.8 %     19.9 %
                             --------  --------  ----------  --------  ---------
                             177,467   167,730     5.8 %     37.2 %     42.1 %
  
      Velvets/ Prints        171,389   156,467     9.5 %     36.0 %     39.2 %
  
      Phillips                32,698         0   100.0 %      6.9 %      0.0 %
                             --------  --------  ----------  --------  ---------
                             381,554   324,197    17.7 %     80.0 %     81.3 %
  
  Mattress Ticking
      Culp Home Fashions      87,285    74,682    16.9 %     18.3 %     18.7 %
  
  Yarn
     Artee                     7,876         0   100.0 %      1.7 %      0.0 %
                             --------  --------  ----------  --------  ---------
  
                         * $ 476,715   398,879    19.5 %     100.0%    100.0 %
                             ========  ========  ==========  ========  =========
  
  </TABLE>
  
  
  *U.S.  sales were $97,383 and $76,517 for the current quarter of fiscal 1998 and
  fiscal 1997,  respectively;  and $339,492 and $297,308 for the twelve  months of
  fiscal 1998 and fiscal 1997, respectively. The percentage increase in U.S. sales
  was 27% for the current quarter and an increase of 14% for the twelve months.
  
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                       INTERNATIONAL SALES BY GEOGRAPHIC AREA
       FOR THREE MONTHS AND TWELVE MONTHS ENDED MAY 3, 1998 AND APRIL 27, 1997
  
  <TABLE>
  <CAPTION>
  
                               (Amounts in thousands)
  
                                         THREE MONTHS ENDED (UNAUDITED)
                             -------------------------------------------------------
  
                                   Amounts                       Percent of Total
                                                                      Sales
                             ---------------------             ---------------------
                              May 3,     April 27,  % Over
     Geographic Area           1998        1997     (Under)     1998       1997
  -----------------------    ----------  ---------  ---------  ---------   ---------
  <S>                         <C>         <C>       <C>          <C>        <C>   
  North America(Excluding USA)$  8,459      6,924      22.2 %       22.0 %     23.7 %
  Europe                         7,964      7,672       3.8 %       20.7 %     26.3 %
  Middle East                   10,960      9,769      12.2 %       28.5 %     33.5 %
  Far East & Asia                8,542      3,753     127.6 %       22.2 %     12.9 %
  South America                  1,687        140   1,105.0 %        4.4 %      0.5 %
  All other areas                  839        903      (7.1)%        2.2 %      3.1 %
                             ----------  ---------  ---------   ---------   ---------
   
                         $      38,451     29,161      31.9 %      100.0 %     100.0 %
                             ==========  =========   =========   =========   =========
  
  
                                              TWELVE MONTHS ENDED
                             -------------------------------------------------------
                                   Amounts                       Percent of Total
                                                                      Sales
                             ---------------------             ---------------------
                              May 3,     April 27,  % Over
     Geographic Area           1998        1997     (Under)     1998       1997
  -----------------------    ----------  ---------  ---------  ---------   ---------
  North America          
  (Excluding USA)        $      31,160     27,479   13.4 %       22.7 %     27.1 %
  Europe                        30,775     25,245   21.9 %       22.4 %     24.9 %
  Middle East                   34,412     23,505   46.4 %       25.1 %     23.1 %
  Far East & Asia               32,344     19,646   64.6 %       23.6 %     19.3 %
  South America                  5,158      2,604   98.1 %        3.8 %      2.6 %
  All other areas                3,374      3,092    9.1 %        2.5 %      3.0 %
                             ----------  ---------  ---------  ---------   ---------
  
                         $     137,223    101,571   35.1 %      100.0 %    100.0 %
                             ==========  =========  =========  =========   =========
  
  
  </TABLE>
  
  
  International  sales,  and the  percentage of total sales,  for each of the last
  seven fiscal years  follows:  fiscal 1992-$  34,094 (18%);  fiscal 1993-$ 40,729
  (20%);  fiscal  1994-$ 44,038  (18%);  fiscal 1995-$ 57,971 (19%);  fiscal 1996-
  $ 77,397 (22%);  fiscal 1997-$  101,571 (25%);  and fiscal 1998-$ 137,223 (29%).
  International  sales for for the curent quarter  represented 28.3% and 27.6% for
  1998 and 1997, respectively.
  
  <PAGE>
  
                                     Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1996 vs 1997 vs 1998
  
                               (Amounts in thousands)
  <TABLE>
  <CAPTION>
  
                                     Fiscal 1996                            Fiscal 1997                
                        --------------------------------------  -------------------------------------  
         Product          Q1      Q2      Q3     Q4    TOTAL      Q1     Q2     Q3      Q4    TOTAL    
    Category/Business
          Units
  ----------------------
  Upholstery Fabrics
  <S>                    <C>     <C>    <C>     <C>    <C>       <C>     <C>     <C>     <C>     <C>      
    Culp Textures        17,584  22,715 20,685  23,400  84,384    20,801  24,001  20,389  23,027  88,218   
    Rossville/Chromatex  15,358  17,960 18,567  22,318  74,203    18,165  21,722  18,953  20,672  79,512   
                        --------------------------------------  ----------------------------------------  
                         32,942  40,675 39,252  45,718 158,587    38,966  45,723  39,342  43,699 167,730  
  
    Velvets/Prints       23,523  32,081 31,836  38,261 125,701    34,867  40,233  40,387  40,980 156,467  
  
    Phillips                -       -      -       -      -         -       -       -       -      -   
                        --------------------------------------  ----------------------------------------  
                         56,465  72,756 71,088  83,979 284,288    73,833  85,956  79,729  84,679 324,197  
  
  Mattress Ticking
    Culp Home Fashions   15,892  17,916 15,388  18,183  67,379    16,696  19,248  17,739  20,999  74,682   
  
  Yarn
    Artee                  -       -      -       -      -          -        -       -       -      -   
                        --------------------------------------  ----------------------------------------  
                         72,357  90,672 86,476 102,162 351,667    90,529 105,204 97,468  105,678 398,879  
                        ======================================  ========================================  
  
  </TABLE>
  <PAGE>
  
                                     Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1996 vs 1997 vs 1998
  
  
  <TABLE>
  <CAPTION>
                                                            (Amounts in thousands)
  
                                      Fiscal 1998
                         ---------------------------------------
         Product           Q1       Q2      Q3      Q4   TOTAL
    Category/Business
          Units
  ---------------------
  Upholstery Fabrics
  <S>                   <C>      <C>     <C>     <C>      <C>   
    Culp Textures        21,693   24,454  21,059  25,521   92,727
    Rossville/Chromatex  18,121   21,602  21,120  23,897   84,740
                         ----------------------------------------
                         39,814   46,056  42,179  49,418  177,467
  
    Velvets/Prints       38,397   43,928  44,020  45,044  171,389
  
    Phillips               -      10,725  11,236  10,737   32,698
                         ----------------------------------------
                         78,211  100,709  97,435 105,199  381,554
  
  Mattress Ticking
    Culp Home Fashions   21,287   22,217  20,261  23,520   87,285
  
  Yarn
    Artee                  -        -       761   7,115    7,876
                         ----------------------------------------
  
                         99,498  122,926 118,457 135,834  476,715
                         ========================================
  </TABLE>
  <PAGE>
  
  <TABLE>
  <CAPTION>
                     Percent increase(decrease) from prior year:
                           Product Category/Business Units
  ----------------------------------------------------------------------------------------------------
  
  Upholstery Fabrics
  <S>                    <C>      <C>   <C>      <C>   <C>        <C>    <C>    <C>    <C>      <C>  
   Culp Textures         (10.3)   (0.5)  (1.2)     7.6   (0.9)     18.3   5.7    (1.4)  (1.6)    4.5  
   Rossville/Chromatex     1.4    14.0   13.2     35.5   16.4      18.3  20.9     2.1   (7.4)    7.2  
  
                        --------------------------------------  ------------------------------------- 
                          (5.2)     5.4    5.1    19.7    6.5      18.3  12.4     0.2   (4.4)    5.8  
  
   Velvets/Prints         13.9     21.3   12.5    21.8   17.7      48.2  25.4    26.9     7.1   24.5  
  
   Phillips                  -       -      -       -      -         -     -       -       -      -  
                        --------------------------------------  ------------------------------------- 
                           1.9     11.9    8.3    20.6   11.2      30.8  18.1    12.2     0.8   14.0  
  
  Mattress Ticking
   Culp Home Fashions      45.1    33.6   26.7    14.9   28.8       5.1   7.4    15.3    15.5   10.8  
  
  Yarn
   Artee                    -       -      -       -      -         -     -       -       -      -  
                        --------------------------------------  ------------------------------------- 
  
                            9.1    15.6   11.2    19.6   14.2      25.1  16.0    12.7     3.4   13.4  
                        ======================================  ===================================== 
  
  Overall Growth Rate
  
  Internal (without           
  acquistions)              6.4    13.0    8.7    19.6   12.3      25.1  16.0    12.7     3.4   13.4
  External                  2.7     2.6    2.5            1.9       -     -        -       -       - 
                        --------------------------------------  ------------------------------------- 
                                                                                                      
                            9.1    15.6   11.2    19.6   14.2      25.1  16.0    12.7     3.4   13.4  
                        ======================================  ===================================== 
  
                     Percent increase(decrease) from prior year:
                           Product Category/Business Units
  -------------------------------------------------------------------------------------------------------------
  
  Upholstery Fabrics
      Culp Textures         4.3      1.9     3.3   10.8    5.1
      Rossville/Chromatex  (0.2)    (0.6)   11.4   15.6    6.6
                          ---------------------------------------
                            2.2      0.7     7.2   13.1    5.8
  
      Velvets/Prints       10.1      9.2     9.0    9.9    9.5
  
      Phillips                                             
                              -    100.0   100.0  100.0  100.0
                          ---------------------------------------
                            5.9     17.2    22.2   24.2   17.7
  
  Mattress Ticking
      Culp Home Fashions   27.5     15.4    14.2   12.0   16.9
  
  Yarn
      Artee                -        -      100.0 100.0  100.0
                          ---------------------------------------
                            9.9     16.8    21.5   28.5   19.5
                          =======================================
  
  Overall Growth Rate
  Internal (without       
  acquistions)              9.9      6.6     9.2   11.6    9.3
  External                  -       10.2    12.3   16.9   10.2
                           --------------------------------------    
                            9.9     16.8    21.5   28.5   19.5
                          =======================================
  
  </TABLE>
  
  <PAGE>
                                                            (Page 8 of 12)
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
     for the three and twelve month periods ended May 3, 1998 and April 27, 1997
  
  
  INCOME STATEMENT COMMENTS
  
  GENERAL - Net sales increased  28.5% to $135.8 million and net income  decreased
  14.1% to $4.2 million for the fourth quarter,  as compared with the same quarter
  of last year. Net sales for the quarter excluding the operations acquired during
  fiscal 1998 increased  11.6% versus the same quarter of last year. The company's
  net profit margin  decreased to 3.1% for the quarter from 4.6% a year ago. Also,
  the  company  achieved  a return on  average  shareholders'  equity of 13.0% for
  fiscal 1998. The company  acquired  Phillips  Mills on August 5, 1997,  Wetumpka
  Yarn on December  30,  1997,  and Artee  Industries  on  February  2, 1998.  The
  acquisitions were accounted for as purchases. The results of these companies are
  therefore included in Culp's results since their respective acquisition dates.
   
  The  company  attributes  its  longer  term  record  of growth  to  several  key
  competitive strengths:
  
  Broad  Product  Offering - marketing  one of the broadest  product  lines in the
  upholstery  fabrics  and  mattress  ticking  industry.   Through  its  extensive
  manufacturing capabilities,  the company competes in every major category of the
  industry except leather.
  
  Diverse Global Customer Base - penetrating  other end-use markets in addition to
  U.S. residential furniture, such as bedding, international, commercial furniture
  and juvenile furniture; sales to these other markets accounted for approximately
  54% of net sales  during  the  fourth  quarter;  additionally,  no one  customer
  accounted for more than 7% of sales during the quarter;
  
  Design  Innovation  - investing  in the  creative  aspect of our  business - the
  company  has   significantly   increased  the  resources   (both  designers  and
  computer-aided  design  (CAD)  systems)  dedicated  to the  design  and  product
  development areas in each business unit; the company's in-house design,  product
  development,  CAD and support staff now includes  over 90 people.  Additionally,
  the company  opened its  state-of-the-art  Design  Center in  Burlington,  North
  Carolina  during  January 1998.  This  facility now brings  together most of the
  company's design resources in one location and utilizes advanced CAD systems and
  technology;
  
  Vertical  Integration  -  realizing  additional  manufacturing   integration  by
  producing  most of its  specialty raw material  components  that are used in the
  manufacture of its products; and
  
  Ability  to  Identify  and  Integrate  Acquisitions  -  investing  in  selective
  acquisitions in complementary businesses which we know and understand,  and that
  strengthen existing marketing positions or add strategic vertical  manufacturing
  capabilities.
  
  NET SALES - All business  units  reported  gains in sales for the fourth quarter
  and full year. The overall  increases for the quarter and year were  principally
  due to the incremental sales from  acquisitions,  international  sales growth of
  31.9% for the quarter and 35.1% for the year,  and  continued  gains in sales of
  mattress  ticking of 12.0% for the quarter and 16.9% for the year.  (See various
  sales  schedules  included in this Form 8-K).  International  sales in all major
  regions and each upholstery  fabric business unit increased,  and they accounted
  for 28% of net sales for the quarter and 29% for the year.  The vast majority of
  the  international  sales represent  sales of upholstery  fabrics to residential
  furniture distributors and manufacturers. (See International Sales by Geographic
  Area  schedule on page 6.) Almost all of the company's  international  sales are
  denominated   in  U.S.   dollars. 
  
  Incoming  order  trends for Phillips and  Rossville/Chromatex  are  improving at
  present due principally to increased  international sales. Order trends for Culp
  Home Fashions  remain very positive.  Late in the fourth quarter of fiscal 1997,
  however,  incoming orders for the company's wet and heat-transfer  printed flock
  product lines began to slow considerably. This trend, which the company believes
  is also affecting the other major flock fabric  competitors,  continued  through
  May.  As a result,  the  Velvets/Prints  division  has  significantly  curtailed
  production  schedules  thus far in the first  quarter  of fiscal  1999.  A large
  percentage  of the  company's  sales of this product  line,  and the industry in
  general,  were being shipped directly or indirectly to customers in the emerging
  markets of Russia and other former Soviet countries, India and Eastern Europe.
  <PAGE>
  
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
     for the three and twelve month periods ended May 3, 1998 and April 27, 1997
  
  
  
  
  All of these areas are  generally  experiencing  very weak  economic  conditions
  which, in turn, have affected demand for furniture and other home  furnishiings.
  The company is  re-directing  its marketing  focus for this product  category to
  other geographic areas where demand remains favorable and believes the long-term
  outlokk favors increasing demand for these fabrics internationally.
  
  GROSS PROFIT - The gross profit  increase of 14.3% for the fourth quarter versus
  the same  quarter  of last year  reflects  a  substantial  gain in the Culp Home
  Fashions and Culp  Velvets/Prints  business units, the incremental  gross profit
  from  the  Phillips  and  Artee  business  units,  and  moderate   decreases  in
  Rossville/Chromatex  and  Culp  Textures.  Additionally,  the  year  end  credit
  adjustment  for LIFO for  fiscal  1998 was  significantly  less than the  credit
  adjustment for LIFO in 1997. The overall gross profit margin of 17.1%  decreased
  for the  fourth  quarter  from 19.2% in the same  quarter of last year.  Factors
  which  adversely  affected the company's  profitability  and margins  during the
  quarter included: (a) incremental costs at  Rossville/Chromatex  associated with
  the planned relocation of its Rossville dobby weaving facility to a new plant in
  Chattanooga, TN, (b) lower profitability in the Culp Textures business unit that
  resulted  from  decreases in profits of its  jacquard  product line and from the
  fabric  finishing  expansion to bring in house the fabric finishing for Phillips
  and   (c)   lower   margins   on   certain    international    shipments    from
  Rossville/Chromatex and Culp Textures.  These factors were offset in part by (a)
  improving   productivity   related  to  various   expansion   projects   in  the
  Velvets/Prints  business  unit as well as  higher  profitability  in its  velvet
  product lines, (b) contributions  from Phillips and Artee, and (c) the operation
  of its  jacquard  greige  goods  facility  in  Canada  (Rayonese)  where a major
  expansion of wide weaving  capacity was  completed  during the third  quarter of
  fiscal 1998.
  
  For the first  quarter  of fiscal  1999 and  likely  continuing  into the second
  quarter,  the  company's  gross  margins  are  expected  to  be  under  pressure
  principally  due to the  substantial  softness  that has developed in demand for
  printed flock fabrics.  Other factors that may adversley  affect margins include
  (a) lower margins on certain international  shipments of fabrics (b) competitive
  pressures  relating to demand for the company's  jacquard product lines, and (c)
  continuing  costs  associated  with  completion  of the project to expand fabric
  finishing to accommodate the Phillips  finishing  requirements.  The company has
  instituted  several key initiatives to address these  situations,  including (a)
  combining  the  Rossville/Chromatex  and Culp  Textures  business  units,  which
  manufacture  and  market  woven  upholstery   fabrics  to  the  residential  and
  commercial furniture markets,  into one division under a single management team;
  and (b) naming a new president for the Culp Velvets/Prints division as well as a
  new VP of International  Sales and Marketing with significant  experience in the
  printed flock fabric  international  market. The Company believes that it should
  benefit during fiscal 1999 from further improvement in the productivity  related
  to the expansion  projects and from a stronger  contribution from the operations
  acquired during fiscal 1998.
  
  S,G&A EXPENSES - S,G&A expenses for the fourth quarter were  essentially flat as
  a  percentage  of sales  versus the same  period of last year.  The  increase in
  absolute  dollars is principally due to incremental  S,G&A expenses for Phillips
  and Artee, higher sales commissions related to international sales,  significant
  investments   in  additional   design   resources,   and  higher   accruals  for
  incentive-based  compensation  plans.  The higher cost associated with incentive
  compensation  plans  for  the  fourth  quarter  occurred  primarily  because  of
  differences in the timing of accruals in fiscal 1998 versus fiscal 1997.
  
  INTEREST  EXPENSE - The increase  for the fourth  quarter of 80.3% over the same
  quarter  of last year is due to higher  average  borrowings  outstanding,  which
  resulted from the company's fiscal 1998  acquisitions of Phillips and Artee, and
  from capital  expenditure and working capital  investments that were made during
  the year.  Due to the  significant  capital  expenditures  for fiscal 1998,  the
  company began capitalizing interest expense related to major capital projects.
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
     for the three and twelve month periods ended May 3, 1998 and April 27, 1997
  
  
  OTHER EXPENSE (INCOME),  NET - Other expense (income) increased to $753,000 from
  $404,000 in the same  quarter of last year,  due  primarily  to the  incremental
  goodwill  amortization  related to  Phillips  and Artee as well as to debt issue
  costs associated with the company's debt agreements.
  
  INCOME TAXES - The effective tax rate for the fourth quarter was 22.9%, compared
  with 33.0 % for the same quarter of last year. The annual tax rate was 29.0% for
  fiscal 1998 and 36.0% for fiscal 1997.  The lower tax rate  resulted from higher
  than expected tax benefits (in fiscal 1998 as well as prior periods)  related to
  the company's foreign sales corporation  ("FSC"), and higher estimated income in
  Canada which has a lower  effective  tax rate.  The federal tax benefit from the
  FSC resulted in the overall  effective tax rate  decreasing to 29.0% from 35.4%.
  The tax benefit reflected in fiscal 1998 included refunds related to fiscal 1995
  through fiscal 1997, and amounted to approximately  $658,000.  Without these tax
  refunds from prior years,  the effective rate would have been 32.0%. The company
  is estimating the effective tax rate for fiscal 1999 to be 34%.
  
  EBITDA - EBITDA for the quarter increased 1.8% to $11.8 million from last year's
  fourth  quarter and  represented  8.7% of net sales  compared  with 11.0% of net
  sales for the same period of last year.  EBITDA for fiscal 1998 increased  13.8%
  to $44.8  million and  represented  9.4% of net sales  compared with 9.9% of net
  sales for fiscal 1997.
   
  OTHER ITEMS - In order to  facilitate  the  understanding  of (a) the  company's
  results (for the fourth quarter and full year) from its recent  acquisitions and
  (b) the comparisons to prior periods excluding the fiscal 1998  acquisitions,  a
  supplemental  income  statement  schedule has been included (see page 12 of 12).
  This schedule shows that the acquisitions  were accretive during fiscal 1998 and
  contributed  $0.01 per share for the fourth  quarter and $0.09 per share for the
  year. These results were well below the expected levels of performance.
  
  FOURTH  QUARTER  -  Several   non-operating   items  affected  the  year-to-year
  comparison  in net income for the fourth  quarter.  The effect of the  favorable
  items  (capitalization  of interest costs and the lower  effective tax rate) was
  essentially  offset by the other  items  (lower  credit  for LIFO and the higher
  expense for incentive compensation).
  
  
  
  BALANCE SHEET COMMENTS
  
  WORKING  CAPITAL - Accounts  receivable  increased 30.1% from April 1997, due to
  the Phillips,  Wetumpka and Artee  acquisitions and increased sales of 28.5% for
  the fourth quarter.  Days sales' outstanding  represented 49 days at May 3, 1998
  and April 27, 1997. Accounts receivable increased at a slightly faster rate than
  sales because of the increasing mix of international  sales and mattress ticking
  sales,  which carry longer  payment  terms than U.S.  upholstery  fabric  sales.
  Inventories  increased  47.0%  from  April  1997,  partly  due to the  Phillips,
  Wetumpka  and Artee  acquisitions,  higher  overall  sales  and a higher  mix of
  international sales which have required more finished goods inventory. Inventory
  turns  decreased  11% to 5.9 for the quarter  versus 6.6 for the same quarter of
  last year.  Working capital increased  significantly to $102.7 million at May 3,
  1998, from $69.8 million at April 27, 1997, for the reasons mentioned above.
   
  PROPERTY, PLANT AND EQUIPMENT - The company has maintained a significant program
  of capital  expenditures over the past several years designed to expand capacity
  to support sales growth,  increase  vertical  integration to lower product costs
  and  control  more  of its  supply  of  specialty  raw  materials,  and  enhance
  manufacturing  efficiencies  through  modernization.  The  company  had  capital
  spending of  approximately  $36 million during fiscal 1998, which included about
  $12.5  million  for  expansion   projects  (35%);  $10.5  million  for  vertical
  integration  projects (29%) and $13.0 million for modernization  projects (36%).
  The principal  expansion project involved completion of various items related to
  the Lumberton,  N.C. printing facility.  The key vertical  integration  projects
  included yarn  extrusion  expansion,  additional  weaving  capacity for jacquard
  greige goods at Rayonese and fabric finishing for Phillips..  The  modernization
  projects  encompass  a number  of  smaller  projects  throughout  the  company's
  operations.
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
     for the three and twelve month periods ended May 3, 1998 and April 27, 1997
  
  
  
  Depreciation  expense for fiscal 1998 was $14.8  million.  For fiscal 1999,  the
  company  is  planning   to   significantly   reduce  its  capital   spending  to
  approximately $15 million,  and concentrate its efforts on improving the results
  of the  investments  made during  fiscal 1997 and fiscal  1998.  The two largest
  projects that are currently  planned for fiscal 1999 are: (a)  completion of the
  polypropylene  yarn extrusion  expansion,  which began in early fiscal 1998; and
  (b) building  expansions in the Culp Home Fashions  business unit to accommodate
  the significant  growth in the company's sales of mattress ticking over the last
  several  years.  Depreciation  for  fiscal  1999 is  currently  estimated  to be
  approximately $19 million.
   
  LONG-TERM DEBT - The company's funded  debt-to-capital ratio was 53.5% at May 3,
  1998, up from 37.2% at April 27, 1997.  Funded debt was $151.6 million at May 3,
  1998,  up from $ 65.6 million at April 27, 1997.  (Funded debt equals  long-term
  debt, including current maturities, less restricted investments, which represent
  unspent  IRB funds.)  The  increase in funded debt from April 27, 1997  resulted
  from the Phillips,  Artee and Wetumpka  acquisitions  ($52.8  million),  capital
  expenditures ($35.9 million),  a decrease in accounts payable related to capital
  expenditures  ($2.9 million) and was partially  offset by an operating cash flow
  increase  of ($8.8  million).  On  April  2,  1998,  the  company  significantly
  strengthened  its capital  structure with the closing of a private  placement of
  $75 million of senior,  unsecured  notes.  The notes have a fixed coupon rate of
  6.76% and an average term of 10 years.  Additionally,  the  principal  financial
  covenants  include only balance sheet tests:  (a) a funded debt to total capital
  ratio of 60% and (b) a minimum  shareholders'  equity  level.  The proceeds were
  used to repay borrowings under the company's bank credit facility.
  
  
  ACQUISITIONS
  
  PHILLIPS  MILLS  ACQUISITION  - On August 5,  1997,  the  company  acquired  the
  business  and  certain  assets  relating  to the  upholstery  fabric  businesses
  operating as Phillips Mills. Based on the terms of the asset purchase agreement,
  the transaction is valued at approximately  $39.5 million,  which included cash,
  seller debt retired,  a note payable to the seller and  acquisition  costs.  The
  consideration  for the acquisition  also included stock options and an agreement
  for contingent  payments to the selling  companies  within three years following
  closing that could range from $0 to $5,500,000,  depending upon the future sales
  performance of the Phillips  jacquard  fabric product line. (See Form 8-K, dated
  April  30,  1997,  which  provides   additional   information   related  to  the
  acquisition.)
  
  ACQUISITION  OF  WETUMPKA  YARN - On  December  30,  1997,  Culp  completed  the
  acquisition  of the business  and certain  assets  related to the Wetumpka  yarn
  division of Dan River Inc. The  transaction  value at closing was $1.4  million.
  (See  press  release,   dated  December  17,  1997,  which  provides  additional
  information about the acquisition.)
   
  ACQUISITION  OF ARTEE  INDUSTRIES  - On February  2, 1998,  Culp  completed  the
  acquisition of the business and  substantially  all assets and the assumption of
  certain  liabilities  of  Artee  Industries,   Incorporated  ("Artee"),  a  yarn
  manufacturer.  The transaction value at closing was approximately $17.9 million,
  and  included  the  issuance of 284,211 new shares of Culp  common  stock,  $2.0
  million in cash and a $1.6 million  short-term note, as well as the repayment at
  closing of Artee's  interest-bearing  debt.  Also,  there is an "earn-out" which
  provides the opportunity for additional consideration of up to $7.6 million (60%
  in stock and 40% in cash),  based upon the  profitability of Artee during Culp's
  fiscal year ending May 2, 1999.  (See Form 8-K,  dated  October 15, 1997,  which
  provides additional information related to the acquisition.)
  
  
  <PAGE>
  
  
  
    
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
             SCHEDULE OF INCOME STATEMENTS WITH AND WITHOUT ACQUISITIONS
       FOR THREE MONTHS AND TWELVE MONTHS ENDED MAY 3, 1998 AND APRIL 27, 1997
  <TABLE>
  <CAPTION>
  
  (Amounts in Thousands, Except
        for Per Share Data)                                        THREE MONTHS ENDED (UNAUDITED)
                                     ------------------------------------------------------------------------------------------------
                                     ------------------------------------------------------------------------------------------------
                                                                                                          Percent of Sales
                                                                -------------------------------------     ---------------------------
                                     As Reported                Restated Actual           %Over(under)    Restated Actual
                                       Actual        Less       w/o Acquisitions  Actual  Restated vs     w/o Acquisitions   Actual
                                       May 3,     Acquisitions      May 3,       April 27,  April 27,           May 3,      April 27,
                                        1998                        1998           1997       1997              1998          1997
                                     -----------  -----------    -------------------------------------     ------------  -----------
  
  <S>                             <C>               <C>           <C>            <C>         <C>              <C>          <C>    
  Net sales                       $    135,834       17,852        117,982        105,678     11.6 %           100.0 %      100.0 %
  Cost of sales                        112,644       15,253         97,391         85,386     14.1 %            82.5 %       80.8 %
                                     -----------  -----------    ------------ ----------- ------------     ------------  -----------
         Gross profit                   23,190        2,599         20,591         20,292      1.5 %            17.5 %       19.2 %
         
  Selling, general and
    administrative expenses             15,277        1,261        14,016          11,730     19.5 %            11.9 %       11.1 %
                                      -----------  -----------    ------------ ----------- ------------     ------------  -----------
         Income from operations          7,913        1,338         6,575           8,562    (23.2)%             5.6 %        8.1 %
         
  Interest expense                       1,837          801         1,036           1,019      1.7 %             0.9 %        1.0 %
  Interest income                          (69)           0           (69)            (90)   (23.3)%            (0.1)%       (0.1)%
  Other expense (income), net              753          290           463             404     14.6 %             0.4 %        0.4 %
                                     -----------  -----------    ------------  ----------- ------------     ------------  -----------
         Income before income taxes      5,392          247         5,145           7,229    (28.8)%             4.4 %        6.8 %
  
  Income taxes                           1,236           97         1,139           2,389    (52.3)%            22.1 %       33.0 %
                                     -----------  -----------    ------------  ----------- ------------     ------------  -----------
         Net income               $      4,156          150         4,006           4,840    (17.2)%             3.4 %        4.6 %
                                     ===========  ===========    ============  =========== ============     ============  ===========
  
  Net income per share                   $0.32        $0.01          $0.31          $0.39    (20.5)%
  Net income per share (assuming     
  dilution)                              $0.31        $0.01          $0.30          $0.38    (21.1)%  
   
                                                          TWELVE MONTHS ENDED
                                     ----------------------------------------------------------------------------------------------
                                                                                                               Percent of Sales
                                                                -------------------------------------     ---------------------------
                                     As Reported                Restated Actual           %Over(under)    Restated Actual
                                       Actual        Less       w/o Acquisitions  Actual  Restated vs     w/o Acquisitions   Actual
                                       May 3,     Acquisitions     May 3,        April 27,  April 27,          May 3,       April 27,
                                        1998                        1998           1997       1997              1998          1997
                                     -----------  -----------    -------------------------------------     ------------  -----------
     
   
  Net sales                       $    476,715       40,574        436,141       398,879       9.3 %           100.0 %      100.0 %
  Cost of sales                        393,154       33,086        360,068       326,394      10.3 %            82.6 %       81.8 %
                                    -----------  -----------    ------------  -----------  ---------        ------------  -----------
         Gross profit                   83,561        7,488         76,073        72,485       4.9 %            17.4 %       18.2 %
                                   
  Selling, general and
    administrative expenses             52,987        3,166         49,821        45,058      10.6 %            11.4 %       11.3 %
                                     -----------  -----------    ------------ -----------  ---------        ------------  -----------
         Income from operations         30,574        4,322         26,252        27,427      (4.3)%             6.0 %        6.9 %
  
  Interest expense                       7,117        1,900          5,217         4,671      11.7 %             1.2 %        1.2 %
                                                                                      
  Interest income                        (304)            0           (304)         (280)      8.6 %            (0.1)%       (0.1)%
                                                                                         
  Other expense (income), net            1,912          627          1,285         1,521     (15.5)%             0.3 %        0.4 %
                                                                                  
                                     -----------  -----------    ------------ -----------  ---------        ------------  -----------
         Income before income taxes     21,849        1,795         20,054        21,515       (6.8)%             4.6 %        5.4 %
     
  Income taxes                           6,336          638          5,698         7,745      (26.4)%            28.4 %       36.0 %
                                     -----------  -----------    ------------ -----------   ---------       ------------  -----------
         Net income               $     15,513        1,157         14,356        13,770        4.3 %             3.3 %        3.5 %
                                     ===========  ===========    ============ ===========   =========       ============  ===========
  
  Net income per share                   $1.22        $0.09          $1.13         $1.18       (4.2)%
  Net income per share (assuming                   
  dilution)                              $1.19        $0.09          $1.10         $1.15       (4.3)%
  </TABLE>
  <PAGE>
metadata_documents: [{"type": "8-K", "sequence": "1", "description": "CULP, INC. 8-K", "secsgml_size_bytes": 71878}]
metadata_filer: {"company-data": {"conformed-name": "CULP INC", "cik": "0000723603", "assigned-sic": "2211", "irs-number": "561001967", "state-of-incorporation": "NC", "fiscal-year-end": "0430"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-12597", "film-number": "98642020"}, "business-address": {"street1": "101 S MAIN ST", "street2": "101 S MAIN ST", "city": "HIGH POINT", "state": "NC", "zip": "27261-2686", "phone": "9108895161"}, "mail-address": {"street1": "P O BOX 2686", "street2": "101 S MAIN ST", "city": "HIGH POINT", "state": "NC", "zip": "27261"}}
text: SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549
  
                                     ---------
  
                                     Form 8-K
  
                                  CURRENT REPORT
  
                 Pursuant to Section 13 or 15(d) of the Securities
                               Exchange Act of 1934
  
                                   -------------
  
           Date of Report (Date of earliest event reported) June 3, 1998
  
                                     CULP, INC.
  
              (Exact name of registrant as specified in its charter)
  
          North Carolina                  0-12781                56-1001967
  
   (State or other jurisdiction    (Commission File No.)       (IRS Employer
         of incorporation)                                  Identification No.)
  
                               101 South Main Street
                         High Point, North Carolina  27260
                     (Address of principal executive offices)
                                  (336) 889-5161
               (Registrant's telephone number, including area code)
  
                                                                                
           (Former name or former address, if changed since last report)
  
  -------------------------------------------------------------------------------
  Item 5. Other Events
  
  See  attached  Press  Release (3 pages) and  Financial  Information  Release (12
  pages),  both dated June 3, 1998,  related to the fourth  quarter and year ended
  May 3, 1998.
  
  Forward  Looking  Information.  This Report  contains  statements  that could be
  deemed   "forward-looking   statements"   within  the  meaning  of  the  federal
  securities  laws,   which  statements  are  inherently   subject  to  risks  and
  uncertainties.   Forward-looking   statements   are   statements   that  include
  projections,   expectations  or  beliefs  about  future  events  or  results  or
  otherwise are not  statements  of historical  fact.  Such  statements  are often
  characterized  by  qualifying  words such as  "expect,"  "believe,"  "estimate,"
  "plan" and "project"  and their  derivatives.  Factors that could  influence the
  matters  discussed in such  statements  include the level of housing  starts and
  sales of existing homes,  consumer confidence,  trends in disposable income, and
  general  economic  conditions.  Decreases  in these  economic  indicators  could
  have a  negative  effect on the  Company's  business  and  prospects.  Likewise,
  increases in interest rates,  particularly  home mortgage  rates,  and increases
  in consumer debt or the general rate of inflation,  could  adversely  affect the
  Company.  In  addition,  the  value  of the  U.  S.  dollar  relative  to  other
  currencies  can  affect  the   competitiveness  of  the  Company's  products  in
  international markets.
   
  
                                    SIGNATURES
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
   
                                      CULP, INC.
                                      (Registrant)
  
                                By:    Franklin N. Saxon                          
                                       Senior Vice President and
                                       Chief Financial Officer
  
                                By:    Phillip W. Wilson                          
                                       Director of Finance
  
  Dated:   June 3, 1998
  -MORE-
  
  FOR IMMEDIATE RELEASE
  
               CULP REPORTS RECORD SALES AND EARNINGS FOR FISCAL 1998
                                      ----------
                     FOURTH QUARTER REFLECTS PRESSURE ON MARGINS
  
  HIGH POINT, N. C. (June 3, 1998) - Culp, Inc.  (NYSE:CFI)  today reported higher
  sales  and  earnings  for the  fiscal  year  ended  May 3,  1998.  Although  the
  company  reported lower earnings for the fourth fiscal quarter,  the results for
  the full year marked the ninth consecutive year of record earnings for Culp.
  
        For the 1998 fiscal year,  net sales totaled $476.7  million,  up 20% from
  $398.9  million  in  fiscal  1997.  Net  income  for the year  rose 13% to $15.5
  million,  or $1.19 per share diluted,  up from $13.8 million, or $1.15 per share
  diluted, in fiscal 1997.
  
        Net sales for the quarter  increased 29% to $135.8  million  compared with
  $105.7  million a year ago.  Net income for the quarter  totaled  $4.2  million,
  or $0.31 per share  diluted,  compared  with  $4.8  million,  or $0.38 per share
  diluted, in the fourth quarter of fiscal 1997.
  
        The  Company's  effective  tax rate for fiscal 1998 was 29% compared  with
  36% a year ago. The lower rate was due  principally  to  increased  tax benefits
  related  to the  Company's  international  sales.  The  reduced  tax  rate  also
  reflected  a  higher   proportion  of  earnings  from  the  Company's   Canadian
  subsidiary that is taxed at a lower effective rate.
  
        "Net  sales,  net income and  earnings  per share each set new records for
  fiscal 1998 as a whole,"  said Robert G. Culp,  III,  chief  executive  officer.
  "Culp's  financial  performance  for the full  year  marks an  extension  of our
  long-term  record of growth.  At the same time,  several factors  contributed to
  some  pressure  on  profitability  that  was  reflected  in  our  fourth-quarter
  results.  One of the most  significant  developments  related to the $95 million
  that we invested  during  fiscal  1998 to support  Culp's  progress  through the
  acquisition  of  additional  complementary  business  units and various  capital
  projects   intended  to  expand,   modernize   and   vertically   integrate  our
  operations.  Although  assimilation  of the  acquisitions  and completion of the
  capital  projects  have  generally  proceeded  as planned,  we have  experienced
  production   inefficiencies   related  to  the  start-up  of  several  of  these
  initiatives.   We  believe  these   variances  will  prove   temporary  and  are
  confident about realizing a sound long-term return from these investments."
  Culp Reports Record Earnings For Fiscal 1998
  Page 3
  June 3, 1998
  
        Culp added,  "Incoming  orders for our  upholstery  fabrics  and  mattress
  ticking are generally  favorable at present.  One product  category where demand
  has decidedly slowed,  however,  is printed flock upholstery  fabrics.  This has
  been  one of our  fastest-growing  product  groups,  stimulated  by  significant
  growth in demand  from  international  markets;  notably,  portions  of  Eastern
  Europe and Asia. We  accordingly  focused a meaningful  part of our expansion on
  additional  capacity  for these  fabrics.  Although  we believe  the longer term
  outlook  is good  for  increasing  shipments  of  these  fabrics,  the  economic
  difficulties  that many of these regions are  experiencing at present are having
  an  understandably  adverse  impact  on  demand  for  home  furnishings  and our
  fabrics.  We are  re-directing  our  marketing  activities  to other  geographic
  areas and expect to realize improved results as fiscal 1999 develops."
  
        "As we start fiscal 1999, we are  encouraged  about the momentum that Culp
  has  established  in the  development  of new  patterns  and  textures  for  our
  upholstery  fabrics  and  mattress  ticking.  Our  completion  of the  Howard L.
  Dunn,  Jr. design center during fiscal 1998  epitomized the key role that design
  has in our  business.  We  have  been  fortunate  to add a  number  of  talented
  designers with solid  reputations  and a willingness  to test new concepts.  The
  design  teams now have a truly  state-of-the-art  facility,  and we are  pleased
  with their  accomplishments  to date.  The backdrop of high consumer  confidence
  and stable  mortgage  rates  presents a favorable  environment  for  spending on
  home  furnishings  in the United  States.  We are thus  optimistic  about Culp's
  prospects for continued  progress in fiscal 1999 as a whole.  We recognize  that
  the  first  half  of  the  year  will  be  challenging   and  believe  that  the
  year-to-year improvement will be more likely to occur during the second half."
  
        Culp  concluded,  "Purchases  of existing  operations  and other  physical
  assets  have been an  integral  component  of our growth for more than a decade.
  Although we expect to  maintain  an active  capital  investment  program  during
  fiscal  1999,  the planned  spending  of $15 million  will be less than half the
  $36 million spend in fiscal 1998.  Our primary  focus will be the  maturation of
  the  projects  that  have  either  been  or  are  nearing   completion.   Culp's
  profitability  has enabled us to support these  investments  while maintaining a
  solid  financial  position.  Our funded  debt/capital  ratio  totaled 54% at the
  close of fiscal 1998 with  borrowings  of $30 million  against our $100  million
  line  of  credit.   During  the  fourth  quarter,   we  enhanced  our  financial
  flexibility  further by  closing a private  placement  of $75  million in senior
  unsecured notes with a fixed rate of 6.76% for 10 years."
  
        Culp is the  world's  largest  manufacturer  and  marketer  of  upholstery
  fabrics  for  furniture  and is a  leading  producer  of  mattress  ticking  for
  bedding.  The  Company's  fabrics  are used  principally  in the  production  of
  residential and commercial furniture and bedding products.
  This  Release  contains   statements  that  could  be  deemed   "forward-looking
  statements"   within  the  meaning  of  the  federal   securities   laws,  which
  statements are inherently  subject to risks and  uncertainties.  Forward-looking
  statements  are statements  that include  projections,  expectations  or beliefs
  about future  events or results or otherwise  are not  statements  of historical
  fact.  Such  statements  are often  characterized  by  qualifying  words such as
  "expect,"  "believe,"  "estimate,"  "plan" and "project" and their  derivatives.
  Factors that could influence the matters  discussed in such  statements  include
  the level of housing starts and sales of existing  homes,  consumer  confidence,
  trends in  disposable  income,  and general  economic  conditions.  Decreases in
  these  economic  indicators  could  have a  negative  effect  on  the  Company's
  business and  prospects.  Likewise,  increases in interest  rates,  particularly
  home  mortgage  rates,  and  increases  in consumer  debt or the general rate of
  inflation,  could adversely  affect the Company.  In addition,  the value of the
  U.S. dollar relative to other currencies can affect the  competitiveness  of the
  Company's products in international markets.
  
                                     CULP, INC.
                           Condensed Financial Highlights
  
                                                       Three Months Ended     
                                                     May 3,         April 27,
                                                     1998             1997    
   
  Net sales                                      $135,834,000      $105,678,000
  Net income                                        4,156,000         4,840,000
  Earnings per share
    Basic                                        $       0.32      $       0.39
    Diluted                                      $       0.31      $       0.38
  Average shares outstanding
    Basic                                          12,993,000        12,546,000
    Diluted                                        13,284,000        12,856,000
  
                                                       Fiscal Year Ended      
                                                     May 3,          April 27,
                                                     1998              1997   
   
  Net sales                                      $476,715,000      $398,879,000
  Net income                                       15,513,000        13,770,000
  Earnings per share
    Basic                                        $       1.22      $       1.18
    Diluted                                      $       1.19      $       1.15
  Average shares outstanding
    Basic                                          12,744,000        11,624,000
    Diluted                                        13,042,000        11,929,000
                                        -END-
  CULP, INC. FINANCIAL INFORMATION RELEASE
                              CONSOLIDATED INCOME STATEMENTS
         FOR THREE MONTHS AND TWELVE MONTHS ENDED MAY 3, 1998 AND APRIL 27, 1997
  
                    (Amounts in Thousands, Except for Per Share Data)
  THREE MONTHS ENDED (UNAUDITED)
                                 --------------------------------------------------------
  
                                       Amounts                         Percent of Sales
                                 ---------------------                --------------------
                                  May 3,    April 27,    % Over
                                   1998       1997      (Under)        1998       1997
                                 ---------- ----------  ---------     ---------  ---------
  Net sales                    $   135,834    105,678     28.5 %        100.0 %    100.0 %
  Cost of sales                    112,644     85,386     31.9 %         82.9 %     80.8 %
                                 ---------- ----------  ---------     ---------  ---------
        Gross profit                23,190     20,292     14.3 %         17.1 %     19.2 %
  
  Selling, general and
    administrative expenses         15,277     11,730     30.2 %         11.2 %     11.1 %
                                 ---------- ----------  ---------     ---------  ---------
        Income from operations       7,913      8,562     (7.6) %         5.8 %      8.1 %
  
  Interest expense                   1,837      1,019     80.3 %          1.4 %      1.0 %
  Interest income                      (69)       (90)   (23.3) %        (0.1) %    (0.1) %
  Other expense (income), net          753        404     86.4 %          0.6 %      0.4 %
                                 ---------- ----------  ---------     ---------  ---------
        Income before income taxes   5,392      7,229    (25.4) %         4.0 %      6.8 %
  
  Income taxes  *                    1,236      2,389    (48.3) %        22.9 %     33.0 %
                                 ---------- ----------  ---------     ---------  ---------
         Net income             $    4,156      4,840    (14.1) %         3.1 %      4.6 %
                                 ========== ==========  =========     =========  =========
  
  Net income per share               $0.32      $0.39    (17.9) %
  Net income per share               
  (assuming dilution)                $0.31      $0.38    (18.4) %
  Dividends per share              $0.0350    $0.0325      7.7 %
  Average shares outstanding        12,993     12,546      3.6 %
  Average shares outstanding        
  (assuming dilution)               13,284     12,856      3.3 %
  
                                                   TWELVE MONTHS ENDED
                                 --------------------------------------------------------
  
                                       Amounts                         Percent of Sales
                                 ---------------------                --------------------
                                  May 3,    April 27,    % Over
                                   1998       1997      (Under)        1998       1997
                                 ---------- ----------  ---------     ---------  ---------
  
  Net sales                    $   476,715    398,879     19.5 %        100.0 %    100.0 %
  Cost of sales                    393,154    326,394     20.5 %         82.5 %     81.8 %
                                 ---------- ----------  ---------     ---------  ---------
        Gross profit                83,561     72,485     15.3 %         17.5 %     18.2 %
  
  Selling, general and
    administrative expenses         52,987     45,058     17.6 %         11.1 %     11.3 %
                                 ---------- ----------  ---------     ---------  ---------
        Income from operations      30,574     27,427     11.5 %          6.4 %      6.9 %
  
  Interest expense                   7,117      4,671     52.4 %          1.5 %      1.2 %
  Interest income                     (304)      (280)     8.6 %         (0.1) %    (0.1) %
  Other expense (income), net        1,912      1,521     25.7 %          0.4 %      0.4 %
                                 ---------- ----------  ---------     ---------  ---------
        Income before income taxes  21,849     21,515      1.6 %          4.6 %      5.4 %
        
  Income taxes  *                    6,336      7,745    (18.2) %        29.0 %     36.0 %
                                 ---------- ----------  ---------     ---------  ---------
        Net income             $    15,513     13,770     12.7 %          3.3 %      3.5 %
                                 ========== ==========  =========     =========  =========
  
  Net income per share               $1.22      $1.18      3.4 %
  Net income per share              
  (assuming dilution)                $1.19      $1.15      3.5 %
  Dividends per share                $0.14      $0.13      7.7 %
  Average shares outstanding        12,744     11,624      9.6 %
  Average shares outstanding       
  (assuming dilution)               13,042     11,929      9.3 %
  
  * Percent of sales column is calculated as a % of income before income taxes.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                  CONSOLIDATED BALANCE SHEETS
                                MAY 3, 1998 AND APRIL 27, 1997
  
                                    (Amounts in Thousands)
  Amounts                 Increase
                                             ---------------------------
                                                May 3,      April 27,        (Decrease)
                                                                        ----------------------
                                                  1998          1997      Dollars      Percent
                                              -------------- ----------- ----------    --------
  Current assets
  Cash and cash investments            $         2,312         830      1,482     178.6 %
       Accounts receivable                           73,773      56,691     17,082      30.1 %
       Inventories                                   78,594      53,463     25,131      47.0 %
       Other current assets                           7,808       5,450      2,358      43.3 %
                                              -------------- ----------- ----------    --------
               Total current assets                 162,487     116,434     46,053      39.6 %
                                                                         
  Restricted investments                              4,021      11,018     (6,997)    (63.5)%
  Property, plant & equipment, net                  128,805      91,231     37,574      41.2 %
  Goodwill                                           55,162      22,262     32,900     147.8 %
  Other assets                                        4,340       3,007      1,333      44.3 %
                                              -------------- ----------- ----------    --------
                                                                                       
               Total assets                 $       354,815     243,952    110,863      45.4 %
                                              ============== =========== ==========    ========
  
                                                                                       
                                                                                       
  Current liabilities
       Current maturities of long-term debt $        3,325         100      3,225    3,225.0%
       Accounts payable                             37,214      29,903      7,311      24.4 %
       Accrued expenses                             17,936      15,074      2,862      19.0 %
       Income taxes payable                          1,282       1,580       (298)    (18.9)%
                                             -------------- ----------- ----------    --------
               Total current                        59,757      46,657     13,100      28.1 %
               liabilities
                                                                                       
  Long-term debt                                   152,312      76,541     75,771      99.0 %
                                                            
  Deferred income taxes                             11,227       9,965      1,262      12.7 %
                                             -------------- ----------- ----------    --------
               Total liabilities                   223,296     133,163     90,133      67.7 %
                                                                                       
  Shareholders' equity                             131,519     110,789     20,730      18.7 %
                                             -------------- ----------- ----------    --------
                                                                                       
               Total liabilities and                                                   
               shareholders' equity        $       354,815     243,952    110,863      45.4 %
                                             ============== =========== ==========    ========
                                                                                       
  Shares outstanding                                13,007      12,609        398       3.2 %
                                             ============== =========== ==========    ========
  CULP, INC.
                            FINANCIAL INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED MAY 3, 1998 AND APRIL 27, 1997
                               (Amounts in Thousands)
  TWELVE MONTHS ENDED
                                                              ----------------------
                                                                     Amounts
                                                              ----------------------
                                                                May 3,    April 27,
                                                                 1998       1997
                                                              ----------- ----------
  Cash flows from operating activities:
  Net income                                           $      15,513     13,770
      Adjustments to reconcile net income to net
        cash provided by operating activities:
           Depreciation                                           14,808     12,688
           Amortization of intangible assets                       1,371        810
           Provision for deferred income taxes                     1,416        966
           Changes in assets and liabilities, net of
           effects of payments for businesses acquired:
             Accounts receivable                                 (13,207)    (4,653)
             Inventories                                         (17,684)    (6,068)
             Other current assets                                   (660)      (348)
             Other assets                                           (380)      (205)
             Accounts payable                                      6,477      2,586
             Accrued expenses                                      1,506      2,510
             Income taxes payable                                   (298)     1,383
                                                              ----------- ----------
                Net cash provided by operating activities          8,862     23,439
                                                              ----------- ----------
  Cash flows from investing activities:                                    
      Capital expenditures                                       (35,879)   (26,958)
      Purchases of restricted investments                         (8,770)    (9,770)
      Purchase of investments to fund deferred                    
      compensation liability                                        (581)      (563)
      Sale of restricted investments                              15,767      4,002
      Payments for businesses acquired                           (42,966)         0
                                                              ----------- ----------
                Net cash used in investing activities            (72,429)   (33,289)
                                                              ----------- ----------
  Cash flows from financing activities:                                    
      Proceeds from issuance of long-term debt                    86,246     54,500
      Principal payments on long-term debt                       (17,100)   (59,900)
      Change in accounts payable-capital expenditures             (2,873)         9
      Dividends paid                                              (1,786)    (1,513)
      Proceeds from common stock issued                              562     17,086
                                                              ----------- ----------
                Net cash provided by financing activities         65,049     10,182
                                                              ----------- ----------
                                                                           
  Increase in cash and cash investments                            1,482        332
                                                                           
  Cash and cash investments at beginning of period                   830        498
                                                              ----------- ----------
                                                                           
  Cash and cash investments at end of period               $       2,312        830
                                                              =========== ==========
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                     FINANCIAL ANALYSIS
                                         MAY 3, 1998
  FISCAL 97                FISCAL 98
                                   --------  ---------------------------------------   ---------
                                      Q4         Q1        Q2        Q3        Q4         LTM
                                   --------  ---------------------------------------   ---------
  
  INVENTORIES
  Inventory turns                 6.6         5.8       6.1       5.4      5.9
  
  RECEIVABLES
        Days sales in receivables       49          50        55        52       49
        Percent current & less
        than 30 days past due         99.1%       95.0%     97.8%     94.1%     96.6%
        
  WORKING CAPITAL
        Current  ratio                  2.5         3.6        2.9       3.0       2.7
        Working capital turnover (4)    5.3         5.1        4.8       4.7       4.7
        Operating working capital (4) $80,251    $94,647    $107,797  $112,220  $115,153
      
  PROPERTY, PLANT & EQUIPMENT
        Depreciation rate               7.5%        7.1%      7.4%      7.4%      7.4%
        Percent property, plant &
          equipment are depreciated    47.4%       46.8%     45.3%     44.8%     42.6%
        Capital expenditures         $26,958 (1)  $9,153   $10,063    $8,967    $7,696
       
  PROFITABILITY
        Return on average total capital 11.7%        7.6%     10.0%      8.3%      7.7%        8.4%
        Return on average equity        20.9%       10.2%     15.6%     13.4%     13.1%       13.0%
        Net income per share            $0.39       $0.23     $0.36     $0.32     $0.32       $1.22
        Net income per share (diluted)  $0.38       $0.22     $0.35     $0.31     $0.31       $1.19
       
  
  LEVERAGE (3)
        Total liabilities/equity       120.2%      123.1%    172.0%    169.2%    169.8%
        Funded debt/equity              59.2%       77.4%    111.7%    116.1%    115.3%
        Funded debt/capital employed    37.2%       43.6%     52.8%     53.7%     53.5%
        Funded debt                   $65,623     $87,930  $131,833  $141,223  $151,616
        Funded debt/EBITDA (LTM) (6)     1.67        2.18      2.83      2.95      3.21
        EBITDA/Interest expense,net(LTM) 9.0         9.1       8.5       7.5        6.6 
  
  OTHER
        Book value per share            $8.79       $8.98     $9.30     $9.58    $10.11
        Employees at quarter end        3,146       3,180     3,554     3,771     4,334
        Sales per employee (annualized)$134,000    $125,000  $146,000  $129,000  $134,000
        Capital employed (3)           $176,412    $201,467  $249,838  $262,836  $283,135
        Effective income tax rate        33.0%       35.0%     35.0%     22.2%     22.9%
        EBITDA (2)                      $11,582      $9,012   $12,643   $11,390   $11,796     $44,841
        EBITDA/net sales                 11.0%        9.1%     10.3%      9.6%      8.7%        9.4%
        
    (1) Expenditures for entire year
    (2) Earnings before interest, income taxes,and depreciation & amortization.
    (3) Long-term debt, funded debt and capital employed are all net of restricted investments.
    (4) Working capital for this calculation is accounts receivable, inventories and accounts payable.
    (5) LTM represents "Latest Twelve Months"
    (6) EBITDA includes pro forma amounts for Phillips, Wetumpka and Artee
        acquisitions in Qtr 2, Qtr 3 and Qtr 4 of fiscal 1998.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                     SALES BY PRODUCT CATEGORY/BUSINESS UNIT
     FOR THREE MONTHS AND TWELVE MONTHS ENDED MAY 3, 1998 AND APRIL 27, 1997
  
                               (Amounts in thousands)
  THREE MONTHS ENDED (UNAUDITED)
                             ---------------------------------------------------
                                  Amounts                     Percent of Total
                                                                   Sales
                             ------------------              -------------------
                             May 3,    April 27,   % Over
                              1998      1997      (Under)    1998      1997
  
  Product Category/Business Unit
  -------------------------  --------  --------  ----------  --------  ---------
  Upholstery Fabrics
  Culp Textures        $  25,521    23,027    10.8 %     18.8 %     21.8 %
      Rossville/Chromatex     23,897    20,672    15.6 %     17.6 %     19.6 %
                             --------  --------  ----------  --------  ---------
                              49,418    43,699    13.1 %     36.4 %     41.4 %
  
      Velvets/Prints          45,044    40,980     9.9 %     33.2 %     38.8 %
  
      Phillips                10,737         0   100.0 %      7.9 %      0.0 %
                             --------  --------  ----------  --------  ---------
                             105,199    84,679    24.2 %     77.4 %     80.1 %
  
  Mattress Ticking
      Culp Home Fashions      23,520    20,999    12.0 %     17.3 %     19.9 %
  
  Yarn
     Artee                     7,115         0   100.0 %      5.2 %      0.0 %
                             --------  --------  ----------  --------  ---------
  
                         * $ 135,834   105,678    28.5 %     100.0%    100.0 %
                             ========  ========  ==========  ========  =========
  
                                            TWELVE MONTHS ENDED
                             ---------------------------------------------------
  
                                  Amounts                     Percent of Total
                                                                   Sales
                             ------------------              -------------------
                             May 3,    April 27,  % Over
                              1998      1997      (Under)    1998      1997
  
  Product Category/Business Unit
  -------------------------  --------  --------  ----------  --------  ---------
  Upholstery Fabrics
      Culp Textures        $  92,727    88,218     5.1 %     19.5 %     22.1 %
      Rossville/Chromatex     84,740    79,512     6.6 %     17.8 %     19.9 %
                             --------  --------  ----------  --------  ---------
                             177,467   167,730     5.8 %     37.2 %     42.1 %
  
      Velvets/ Prints        171,389   156,467     9.5 %     36.0 %     39.2 %
  
      Phillips                32,698         0   100.0 %      6.9 %      0.0 %
                             --------  --------  ----------  --------  ---------
                             381,554   324,197    17.7 %     80.0 %     81.3 %
  
  Mattress Ticking
      Culp Home Fashions      87,285    74,682    16.9 %     18.3 %     18.7 %
  
  Yarn
     Artee                     7,876         0   100.0 %      1.7 %      0.0 %
                             --------  --------  ----------  --------  ---------
  
                         * $ 476,715   398,879    19.5 %     100.0%    100.0 %
                             ========  ========  ==========  ========  =========
  *U.S.  sales were $97,383 and $76,517 for the current quarter of fiscal 1998 and
  fiscal 1997,  respectively;  and $339,492 and $297,308 for the twelve  months of
  fiscal 1998 and fiscal 1997, respectively. The percentage increase in U.S. sales
  was 27% for the current quarter and an increase of 14% for the twelve months.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                       INTERNATIONAL SALES BY GEOGRAPHIC AREA
       FOR THREE MONTHS AND TWELVE MONTHS ENDED MAY 3, 1998 AND APRIL 27, 1997
  (Amounts in thousands)
  
                                         THREE MONTHS ENDED (UNAUDITED)
                             -------------------------------------------------------
  
                                   Amounts                       Percent of Total
                                                                      Sales
                             ---------------------             ---------------------
                              May 3,     April 27,  % Over
     Geographic Area           1998        1997     (Under)     1998       1997
  -----------------------    ----------  ---------  ---------  ---------   ---------
  North America(Excluding USA)$  8,459      6,924      22.2 %       22.0 %     23.7 %
  Europe                         7,964      7,672       3.8 %       20.7 %     26.3 %
  Middle East                   10,960      9,769      12.2 %       28.5 %     33.5 %
  Far East & Asia                8,542      3,753     127.6 %       22.2 %     12.9 %
  South America                  1,687        140   1,105.0 %        4.4 %      0.5 %
  All other areas                  839        903      (7.1)%        2.2 %      3.1 %
                             ----------  ---------  ---------   ---------   ---------
   
                         $      38,451     29,161      31.9 %      100.0 %     100.0 %
                             ==========  =========   =========   =========   =========
  
                                              TWELVE MONTHS ENDED
                             -------------------------------------------------------
                                   Amounts                       Percent of Total
                                                                      Sales
                             ---------------------             ---------------------
                              May 3,     April 27,  % Over
     Geographic Area           1998        1997     (Under)     1998       1997
  -----------------------    ----------  ---------  ---------  ---------   ---------
  North America          
  (Excluding USA)        $      31,160     27,479   13.4 %       22.7 %     27.1 %
  Europe                        30,775     25,245   21.9 %       22.4 %     24.9 %
  Middle East                   34,412     23,505   46.4 %       25.1 %     23.1 %
  Far East & Asia               32,344     19,646   64.6 %       23.6 %     19.3 %
  South America                  5,158      2,604   98.1 %        3.8 %      2.6 %
  All other areas                3,374      3,092    9.1 %        2.5 %      3.0 %
                             ----------  ---------  ---------  ---------   ---------
  
                         $     137,223    101,571   35.1 %      100.0 %    100.0 %
                             ==========  =========  =========  =========   =========
  International  sales,  and the  percentage of total sales,  for each of the last
  seven fiscal years  follows:  fiscal 1992-$  34,094 (18%);  fiscal 1993-$ 40,729
  (20%);  fiscal  1994-$ 44,038  (18%);  fiscal 1995-$ 57,971 (19%);  fiscal 1996-
  $ 77,397 (22%);  fiscal 1997-$  101,571 (25%);  and fiscal 1998-$ 137,223 (29%).
  International  sales for for the curent quarter  represented 28.3% and 27.6% for
  1998 and 1997, respectively.
  Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1996 vs 1997 vs 1998
  
                               (Amounts in thousands)
  Fiscal 1996                            Fiscal 1997                
                        --------------------------------------  -------------------------------------  
         Product          Q1      Q2      Q3     Q4    TOTAL      Q1     Q2     Q3      Q4    TOTAL    
    Category/Business
          Units
  ----------------------
  Upholstery Fabrics
  Culp Textures        17,584  22,715 20,685  23,400  84,384    20,801  24,001  20,389  23,027  88,218   
    Rossville/Chromatex  15,358  17,960 18,567  22,318  74,203    18,165  21,722  18,953  20,672  79,512   
                        --------------------------------------  ----------------------------------------  
                         32,942  40,675 39,252  45,718 158,587    38,966  45,723  39,342  43,699 167,730  
  
    Velvets/Prints       23,523  32,081 31,836  38,261 125,701    34,867  40,233  40,387  40,980 156,467  
  
    Phillips                -       -      -       -      -         -       -       -       -      -   
                        --------------------------------------  ----------------------------------------  
                         56,465  72,756 71,088  83,979 284,288    73,833  85,956  79,729  84,679 324,197  
  
  Mattress Ticking
    Culp Home Fashions   15,892  17,916 15,388  18,183  67,379    16,696  19,248  17,739  20,999  74,682   
  
  Yarn
    Artee                  -       -      -       -      -          -        -       -       -      -   
                        --------------------------------------  ----------------------------------------  
                         72,357  90,672 86,476 102,162 351,667    90,529 105,204 97,468  105,678 398,879  
                        ======================================  ========================================
  Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1996 vs 1997 vs 1998
  (Amounts in thousands)
  
                                      Fiscal 1998
                         ---------------------------------------
         Product           Q1       Q2      Q3      Q4   TOTAL
    Category/Business
          Units
  ---------------------
  Upholstery Fabrics
  Culp Textures        21,693   24,454  21,059  25,521   92,727
    Rossville/Chromatex  18,121   21,602  21,120  23,897   84,740
                         ----------------------------------------
                         39,814   46,056  42,179  49,418  177,467
  
    Velvets/Prints       38,397   43,928  44,020  45,044  171,389
  
    Phillips               -      10,725  11,236  10,737   32,698
                         ----------------------------------------
                         78,211  100,709  97,435 105,199  381,554
  
  Mattress Ticking
    Culp Home Fashions   21,287   22,217  20,261  23,520   87,285
  
  Yarn
    Artee                  -        -       761   7,115    7,876
                         ----------------------------------------
  
                         99,498  122,926 118,457 135,834  476,715
                         ========================================
  Percent increase(decrease) from prior year:
                           Product Category/Business Units
  ----------------------------------------------------------------------------------------------------
  
  Upholstery Fabrics
  Culp Textures         (10.3)   (0.5)  (1.2)     7.6   (0.9)     18.3   5.7    (1.4)  (1.6)    4.5  
   Rossville/Chromatex     1.4    14.0   13.2     35.5   16.4      18.3  20.9     2.1   (7.4)    7.2  
  
                        --------------------------------------  ------------------------------------- 
                          (5.2)     5.4    5.1    19.7    6.5      18.3  12.4     0.2   (4.4)    5.8  
  
   Velvets/Prints         13.9     21.3   12.5    21.8   17.7      48.2  25.4    26.9     7.1   24.5  
  
   Phillips                  -       -      -       -      -         -     -       -       -      -  
                        --------------------------------------  ------------------------------------- 
                           1.9     11.9    8.3    20.6   11.2      30.8  18.1    12.2     0.8   14.0  
  
  Mattress Ticking
   Culp Home Fashions      45.1    33.6   26.7    14.9   28.8       5.1   7.4    15.3    15.5   10.8  
  
  Yarn
   Artee                    -       -      -       -      -         -     -       -       -      -  
                        --------------------------------------  ------------------------------------- 
  
                            9.1    15.6   11.2    19.6   14.2      25.1  16.0    12.7     3.4   13.4  
                        ======================================  ===================================== 
  
  Overall Growth Rate
  
  Internal (without           
  acquistions)              6.4    13.0    8.7    19.6   12.3      25.1  16.0    12.7     3.4   13.4
  External                  2.7     2.6    2.5            1.9       -     -        -       -       - 
                        --------------------------------------  ------------------------------------- 
                                                                                                      
                            9.1    15.6   11.2    19.6   14.2      25.1  16.0    12.7     3.4   13.4  
                        ======================================  ===================================== 
  
                     Percent increase(decrease) from prior year:
                           Product Category/Business Units
  -------------------------------------------------------------------------------------------------------------
  
  Upholstery Fabrics
      Culp Textures         4.3      1.9     3.3   10.8    5.1
      Rossville/Chromatex  (0.2)    (0.6)   11.4   15.6    6.6
                          ---------------------------------------
                            2.2      0.7     7.2   13.1    5.8
  
      Velvets/Prints       10.1      9.2     9.0    9.9    9.5
  
      Phillips                                             
                              -    100.0   100.0  100.0  100.0
                          ---------------------------------------
                            5.9     17.2    22.2   24.2   17.7
  
  Mattress Ticking
      Culp Home Fashions   27.5     15.4    14.2   12.0   16.9
  
  Yarn
      Artee                -        -      100.0 100.0  100.0
                          ---------------------------------------
                            9.9     16.8    21.5   28.5   19.5
                          =======================================
  
  Overall Growth Rate
  Internal (without       
  acquistions)              9.9      6.6     9.2   11.6    9.3
  External                  -       10.2    12.3   16.9   10.2
                           --------------------------------------    
                            9.9     16.8    21.5   28.5   19.5
                          =======================================
  (Page 8 of 12)
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
     for the three and twelve month periods ended May 3, 1998 and April 27, 1997
  
  INCOME STATEMENT COMMENTS
  
  GENERAL - Net sales increased  28.5% to $135.8 million and net income  decreased
  14.1% to $4.2 million for the fourth quarter,  as compared with the same quarter
  of last year. Net sales for the quarter excluding the operations acquired during
  fiscal 1998 increased  11.6% versus the same quarter of last year. The company's
  net profit margin  decreased to 3.1% for the quarter from 4.6% a year ago. Also,
  the  company  achieved  a return on  average  shareholders'  equity of 13.0% for
  fiscal 1998. The company  acquired  Phillips  Mills on August 5, 1997,  Wetumpka
  Yarn on December  30,  1997,  and Artee  Industries  on  February  2, 1998.  The
  acquisitions were accounted for as purchases. The results of these companies are
  therefore included in Culp's results since their respective acquisition dates.
   
  The  company  attributes  its  longer  term  record  of growth  to  several  key
  competitive strengths:
  
  Broad  Product  Offering - marketing  one of the broadest  product  lines in the
  upholstery  fabrics  and  mattress  ticking  industry.   Through  its  extensive
  manufacturing capabilities,  the company competes in every major category of the
  industry except leather.
  
  Diverse Global Customer Base - penetrating  other end-use markets in addition to
  U.S. residential furniture, such as bedding, international, commercial furniture
  and juvenile furniture; sales to these other markets accounted for approximately
  54% of net sales  during  the  fourth  quarter;  additionally,  no one  customer
  accounted for more than 7% of sales during the quarter;
  
  Design  Innovation  - investing  in the  creative  aspect of our  business - the
  company  has   significantly   increased  the  resources   (both  designers  and
  computer-aided  design  (CAD)  systems)  dedicated  to the  design  and  product
  development areas in each business unit; the company's in-house design,  product
  development,  CAD and support staff now includes  over 90 people.  Additionally,
  the company  opened its  state-of-the-art  Design  Center in  Burlington,  North
  Carolina  during  January 1998.  This  facility now brings  together most of the
  company's design resources in one location and utilizes advanced CAD systems and
  technology;
  
  Vertical  Integration  -  realizing  additional  manufacturing   integration  by
  producing  most of its  specialty raw material  components  that are used in the
  manufacture of its products; and
  
  Ability  to  Identify  and  Integrate  Acquisitions  -  investing  in  selective
  acquisitions in complementary businesses which we know and understand,  and that
  strengthen existing marketing positions or add strategic vertical  manufacturing
  capabilities.
  
  NET SALES - All business  units  reported  gains in sales for the fourth quarter
  and full year. The overall  increases for the quarter and year were  principally
  due to the incremental sales from  acquisitions,  international  sales growth of
  31.9% for the quarter and 35.1% for the year,  and  continued  gains in sales of
  mattress  ticking of 12.0% for the quarter and 16.9% for the year.  (See various
  sales  schedules  included in this Form 8-K).  International  sales in all major
  regions and each upholstery  fabric business unit increased,  and they accounted
  for 28% of net sales for the quarter and 29% for the year.  The vast majority of
  the  international  sales represent  sales of upholstery  fabrics to residential
  furniture distributors and manufacturers. (See International Sales by Geographic
  Area  schedule on page 6.) Almost all of the company's  international  sales are
  denominated   in  U.S.   dollars. 
  
  Incoming  order  trends for Phillips and  Rossville/Chromatex  are  improving at
  present due principally to increased  international sales. Order trends for Culp
  Home Fashions  remain very positive.  Late in the fourth quarter of fiscal 1997,
  however,  incoming orders for the company's wet and heat-transfer  printed flock
  product lines began to slow considerably. This trend, which the company believes
  is also affecting the other major flock fabric  competitors,  continued  through
  May.  As a result,  the  Velvets/Prints  division  has  significantly  curtailed
  production  schedules  thus far in the first  quarter  of fiscal  1999.  A large
  percentage  of the  company's  sales of this product  line,  and the industry in
  general,  were being shipped directly or indirectly to customers in the emerging
  markets of Russia and other former Soviet countries, India and Eastern Europe.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
     for the three and twelve month periods ended May 3, 1998 and April 27, 1997
  
  All of these areas are  generally  experiencing  very weak  economic  conditions
  which, in turn, have affected demand for furniture and other home  furnishiings.
  The company is  re-directing  its marketing  focus for this product  category to
  other geographic areas where demand remains favorable and believes the long-term
  outlokk favors increasing demand for these fabrics internationally.
  
  GROSS PROFIT - The gross profit  increase of 14.3% for the fourth quarter versus
  the same  quarter  of last year  reflects  a  substantial  gain in the Culp Home
  Fashions and Culp  Velvets/Prints  business units, the incremental  gross profit
  from  the  Phillips  and  Artee  business  units,  and  moderate   decreases  in
  Rossville/Chromatex  and  Culp  Textures.  Additionally,  the  year  end  credit
  adjustment  for LIFO for  fiscal  1998 was  significantly  less than the  credit
  adjustment for LIFO in 1997. The overall gross profit margin of 17.1%  decreased
  for the  fourth  quarter  from 19.2% in the same  quarter of last year.  Factors
  which  adversely  affected the company's  profitability  and margins  during the
  quarter included: (a) incremental costs at  Rossville/Chromatex  associated with
  the planned relocation of its Rossville dobby weaving facility to a new plant in
  Chattanooga, TN, (b) lower profitability in the Culp Textures business unit that
  resulted  from  decreases in profits of its  jacquard  product line and from the
  fabric  finishing  expansion to bring in house the fabric finishing for Phillips
  and   (c)   lower   margins   on   certain    international    shipments    from
  Rossville/Chromatex and Culp Textures.  These factors were offset in part by (a)
  improving   productivity   related  to  various   expansion   projects   in  the
  Velvets/Prints  business  unit as well as  higher  profitability  in its  velvet
  product lines, (b) contributions  from Phillips and Artee, and (c) the operation
  of its  jacquard  greige  goods  facility  in  Canada  (Rayonese)  where a major
  expansion of wide weaving  capacity was  completed  during the third  quarter of
  fiscal 1998.
  
  For the first  quarter  of fiscal  1999 and  likely  continuing  into the second
  quarter,  the  company's  gross  margins  are  expected  to  be  under  pressure
  principally  due to the  substantial  softness  that has developed in demand for
  printed flock fabrics.  Other factors that may adversley  affect margins include
  (a) lower margins on certain international  shipments of fabrics (b) competitive
  pressures  relating to demand for the company's  jacquard product lines, and (c)
  continuing  costs  associated  with  completion  of the project to expand fabric
  finishing to accommodate the Phillips  finishing  requirements.  The company has
  instituted  several key initiatives to address these  situations,  including (a)
  combining  the  Rossville/Chromatex  and Culp  Textures  business  units,  which
  manufacture  and  market  woven  upholstery   fabrics  to  the  residential  and
  commercial furniture markets,  into one division under a single management team;
  and (b) naming a new president for the Culp Velvets/Prints division as well as a
  new VP of International  Sales and Marketing with significant  experience in the
  printed flock fabric  international  market. The Company believes that it should
  benefit during fiscal 1999 from further improvement in the productivity  related
  to the expansion  projects and from a stronger  contribution from the operations
  acquired during fiscal 1998.
  
  S,G&A EXPENSES - S,G&A expenses for the fourth quarter were  essentially flat as
  a  percentage  of sales  versus the same  period of last year.  The  increase in
  absolute  dollars is principally due to incremental  S,G&A expenses for Phillips
  and Artee, higher sales commissions related to international sales,  significant
  investments   in  additional   design   resources,   and  higher   accruals  for
  incentive-based  compensation  plans.  The higher cost associated with incentive
  compensation  plans  for  the  fourth  quarter  occurred  primarily  because  of
  differences in the timing of accruals in fiscal 1998 versus fiscal 1997.
  
  INTEREST  EXPENSE - The increase  for the fourth  quarter of 80.3% over the same
  quarter  of last year is due to higher  average  borrowings  outstanding,  which
  resulted from the company's fiscal 1998  acquisitions of Phillips and Artee, and
  from capital  expenditure and working capital  investments that were made during
  the year.  Due to the  significant  capital  expenditures  for fiscal 1998,  the
  company began capitalizing interest expense related to major capital projects.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
     for the three and twelve month periods ended May 3, 1998 and April 27, 1997
  
  OTHER EXPENSE (INCOME),  NET - Other expense (income) increased to $753,000 from
  $404,000 in the same  quarter of last year,  due  primarily  to the  incremental
  goodwill  amortization  related to  Phillips  and Artee as well as to debt issue
  costs associated with the company's debt agreements.
  
  INCOME TAXES - The effective tax rate for the fourth quarter was 22.9%, compared
  with 33.0 % for the same quarter of last year. The annual tax rate was 29.0% for
  fiscal 1998 and 36.0% for fiscal 1997.  The lower tax rate  resulted from higher
  than expected tax benefits (in fiscal 1998 as well as prior periods)  related to
  the company's foreign sales corporation  ("FSC"), and higher estimated income in
  Canada which has a lower  effective  tax rate.  The federal tax benefit from the
  FSC resulted in the overall  effective tax rate  decreasing to 29.0% from 35.4%.
  The tax benefit reflected in fiscal 1998 included refunds related to fiscal 1995
  through fiscal 1997, and amounted to approximately  $658,000.  Without these tax
  refunds from prior years,  the effective rate would have been 32.0%. The company
  is estimating the effective tax rate for fiscal 1999 to be 34%.
  
  EBITDA - EBITDA for the quarter increased 1.8% to $11.8 million from last year's
  fourth  quarter and  represented  8.7% of net sales  compared  with 11.0% of net
  sales for the same period of last year.  EBITDA for fiscal 1998 increased  13.8%
  to $44.8  million and  represented  9.4% of net sales  compared with 9.9% of net
  sales for fiscal 1997.
   
  OTHER ITEMS - In order to  facilitate  the  understanding  of (a) the  company's
  results (for the fourth quarter and full year) from its recent  acquisitions and
  (b) the comparisons to prior periods excluding the fiscal 1998  acquisitions,  a
  supplemental  income  statement  schedule has been included (see page 12 of 12).
  This schedule shows that the acquisitions  were accretive during fiscal 1998 and
  contributed  $0.01 per share for the fourth  quarter and $0.09 per share for the
  year. These results were well below the expected levels of performance.
  
  FOURTH  QUARTER  -  Several   non-operating   items  affected  the  year-to-year
  comparison  in net income for the fourth  quarter.  The effect of the  favorable
  items  (capitalization  of interest costs and the lower  effective tax rate) was
  essentially  offset by the other  items  (lower  credit  for LIFO and the higher
  expense for incentive compensation).
  
  BALANCE SHEET COMMENTS
  
  WORKING  CAPITAL - Accounts  receivable  increased 30.1% from April 1997, due to
  the Phillips,  Wetumpka and Artee  acquisitions and increased sales of 28.5% for
  the fourth quarter.  Days sales' outstanding  represented 49 days at May 3, 1998
  and April 27, 1997. Accounts receivable increased at a slightly faster rate than
  sales because of the increasing mix of international  sales and mattress ticking
  sales,  which carry longer  payment  terms than U.S.  upholstery  fabric  sales.
  Inventories  increased  47.0%  from  April  1997,  partly  due to the  Phillips,
  Wetumpka  and Artee  acquisitions,  higher  overall  sales  and a higher  mix of
  international sales which have required more finished goods inventory. Inventory
  turns  decreased  11% to 5.9 for the quarter  versus 6.6 for the same quarter of
  last year.  Working capital increased  significantly to $102.7 million at May 3,
  1998, from $69.8 million at April 27, 1997, for the reasons mentioned above.
   
  PROPERTY, PLANT AND EQUIPMENT - The company has maintained a significant program
  of capital  expenditures over the past several years designed to expand capacity
  to support sales growth,  increase  vertical  integration to lower product costs
  and  control  more  of its  supply  of  specialty  raw  materials,  and  enhance
  manufacturing  efficiencies  through  modernization.  The  company  had  capital
  spending of  approximately  $36 million during fiscal 1998, which included about
  $12.5  million  for  expansion   projects  (35%);  $10.5  million  for  vertical
  integration  projects (29%) and $13.0 million for modernization  projects (36%).
  The principal  expansion project involved completion of various items related to
  the Lumberton,  N.C. printing facility.  The key vertical  integration  projects
  included yarn  extrusion  expansion,  additional  weaving  capacity for jacquard
  greige goods at Rayonese and fabric finishing for Phillips..  The  modernization
  projects  encompass  a number  of  smaller  projects  throughout  the  company's
  operations.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
     for the three and twelve month periods ended May 3, 1998 and April 27, 1997
  
  Depreciation  expense for fiscal 1998 was $14.8  million.  For fiscal 1999,  the
  company  is  planning   to   significantly   reduce  its  capital   spending  to
  approximately $15 million,  and concentrate its efforts on improving the results
  of the  investments  made during  fiscal 1997 and fiscal  1998.  The two largest
  projects that are currently  planned for fiscal 1999 are: (a)  completion of the
  polypropylene  yarn extrusion  expansion,  which began in early fiscal 1998; and
  (b) building  expansions in the Culp Home Fashions  business unit to accommodate
  the significant  growth in the company's sales of mattress ticking over the last
  several  years.  Depreciation  for  fiscal  1999 is  currently  estimated  to be
  approximately $19 million.
   
  LONG-TERM DEBT - The company's funded  debt-to-capital ratio was 53.5% at May 3,
  1998, up from 37.2% at April 27, 1997.  Funded debt was $151.6 million at May 3,
  1998,  up from $ 65.6 million at April 27, 1997.  (Funded debt equals  long-term
  debt, including current maturities, less restricted investments, which represent
  unspent  IRB funds.)  The  increase in funded debt from April 27, 1997  resulted
  from the Phillips,  Artee and Wetumpka  acquisitions  ($52.8  million),  capital
  expenditures ($35.9 million),  a decrease in accounts payable related to capital
  expenditures  ($2.9 million) and was partially  offset by an operating cash flow
  increase  of ($8.8  million).  On  April  2,  1998,  the  company  significantly
  strengthened  its capital  structure with the closing of a private  placement of
  $75 million of senior,  unsecured  notes.  The notes have a fixed coupon rate of
  6.76% and an average term of 10 years.  Additionally,  the  principal  financial
  covenants  include only balance sheet tests:  (a) a funded debt to total capital
  ratio of 60% and (b) a minimum  shareholders'  equity  level.  The proceeds were
  used to repay borrowings under the company's bank credit facility.
  
  ACQUISITIONS
  
  PHILLIPS  MILLS  ACQUISITION  - On August 5,  1997,  the  company  acquired  the
  business  and  certain  assets  relating  to the  upholstery  fabric  businesses
  operating as Phillips Mills. Based on the terms of the asset purchase agreement,
  the transaction is valued at approximately  $39.5 million,  which included cash,
  seller debt retired,  a note payable to the seller and  acquisition  costs.  The
  consideration  for the acquisition  also included stock options and an agreement
  for contingent  payments to the selling  companies  within three years following
  closing that could range from $0 to $5,500,000,  depending upon the future sales
  performance of the Phillips  jacquard  fabric product line. (See Form 8-K, dated
  April  30,  1997,  which  provides   additional   information   related  to  the
  acquisition.)
  
  ACQUISITION  OF  WETUMPKA  YARN - On  December  30,  1997,  Culp  completed  the
  acquisition  of the business  and certain  assets  related to the Wetumpka  yarn
  division of Dan River Inc. The  transaction  value at closing was $1.4  million.
  (See  press  release,   dated  December  17,  1997,  which  provides  additional
  information about the acquisition.)
   
  ACQUISITION  OF ARTEE  INDUSTRIES  - On February  2, 1998,  Culp  completed  the
  acquisition of the business and  substantially  all assets and the assumption of
  certain  liabilities  of  Artee  Industries,   Incorporated  ("Artee"),  a  yarn
  manufacturer.  The transaction value at closing was approximately $17.9 million,
  and  included  the  issuance of 284,211 new shares of Culp  common  stock,  $2.0
  million in cash and a $1.6 million  short-term note, as well as the repayment at
  closing of Artee's  interest-bearing  debt.  Also,  there is an "earn-out" which
  provides the opportunity for additional consideration of up to $7.6 million (60%
  in stock and 40% in cash),  based upon the  profitability of Artee during Culp's
  fiscal year ending May 2, 1999.  (See Form 8-K,  dated  October 15, 1997,  which
  provides additional information related to the acquisition.)
  CULP, INC. FINANCIAL INFORMATION RELEASE
             SCHEDULE OF INCOME STATEMENTS WITH AND WITHOUT ACQUISITIONS
       FOR THREE MONTHS AND TWELVE MONTHS ENDED MAY 3, 1998 AND APRIL 27, 1997
  (Amounts in Thousands, Except
        for Per Share Data)                                        THREE MONTHS ENDED (UNAUDITED)
                                     ------------------------------------------------------------------------------------------------
                                     ------------------------------------------------------------------------------------------------
                                                                                                          Percent of Sales
                                                                -------------------------------------     ---------------------------
                                     As Reported                Restated Actual           %Over(under)    Restated Actual
                                       Actual        Less       w/o Acquisitions  Actual  Restated vs     w/o Acquisitions   Actual
                                       May 3,     Acquisitions      May 3,       April 27,  April 27,           May 3,      April 27,
                                        1998                        1998           1997       1997              1998          1997
                                     -----------  -----------    -------------------------------------     ------------  -----------
  Net sales                       $    135,834       17,852        117,982        105,678     11.6 %           100.0 %      100.0 %
  Cost of sales                        112,644       15,253         97,391         85,386     14.1 %            82.5 %       80.8 %
                                     -----------  -----------    ------------ ----------- ------------     ------------  -----------
         Gross profit                   23,190        2,599         20,591         20,292      1.5 %            17.5 %       19.2 %
         
  Selling, general and
    administrative expenses             15,277        1,261        14,016          11,730     19.5 %            11.9 %       11.1 %
                                      -----------  -----------    ------------ ----------- ------------     ------------  -----------
         Income from operations          7,913        1,338         6,575           8,562    (23.2)%             5.6 %        8.1 %
         
  Interest expense                       1,837          801         1,036           1,019      1.7 %             0.9 %        1.0 %
  Interest income                          (69)           0           (69)            (90)   (23.3)%            (0.1)%       (0.1)%
  Other expense (income), net              753          290           463             404     14.6 %             0.4 %        0.4 %
                                     -----------  -----------    ------------  ----------- ------------     ------------  -----------
         Income before income taxes      5,392          247         5,145           7,229    (28.8)%             4.4 %        6.8 %
  
  Income taxes                           1,236           97         1,139           2,389    (52.3)%            22.1 %       33.0 %
                                     -----------  -----------    ------------  ----------- ------------     ------------  -----------
         Net income               $      4,156          150         4,006           4,840    (17.2)%             3.4 %        4.6 %
                                     ===========  ===========    ============  =========== ============     ============  ===========
  
  Net income per share                   $0.32        $0.01          $0.31          $0.39    (20.5)%
  Net income per share (assuming     
  dilution)                              $0.31        $0.01          $0.30          $0.38    (21.1)%  
   
                                                          TWELVE MONTHS ENDED
                                     ----------------------------------------------------------------------------------------------
                                                                                                               Percent of Sales
                                                                -------------------------------------     ---------------------------
                                     As Reported                Restated Actual           %Over(under)    Restated Actual
                                       Actual        Less       w/o Acquisitions  Actual  Restated vs     w/o Acquisitions   Actual
                                       May 3,     Acquisitions     May 3,        April 27,  April 27,          May 3,       April 27,
                                        1998                        1998           1997       1997              1998          1997
                                     -----------  -----------    -------------------------------------     ------------  -----------
     
   
  Net sales                       $    476,715       40,574        436,141       398,879       9.3 %           100.0 %      100.0 %
  Cost of sales                        393,154       33,086        360,068       326,394      10.3 %            82.6 %       81.8 %
                                    -----------  -----------    ------------  -----------  ---------        ------------  -----------
         Gross profit                   83,561        7,488         76,073        72,485       4.9 %            17.4 %       18.2 %
                                   
  Selling, general and
    administrative expenses             52,987        3,166         49,821        45,058      10.6 %            11.4 %       11.3 %
                                     -----------  -----------    ------------ -----------  ---------        ------------  -----------
         Income from operations         30,574        4,322         26,252        27,427      (4.3)%             6.0 %        6.9 %
  
  Interest expense                       7,117        1,900          5,217         4,671      11.7 %             1.2 %        1.2 %
                                                                                      
  Interest income                        (304)            0           (304)         (280)      8.6 %            (0.1)%       (0.1)%
                                                                                         
  Other expense (income), net            1,912          627          1,285         1,521     (15.5)%             0.3 %        0.4 %
                                                                                  
                                     -----------  -----------    ------------ -----------  ---------        ------------  -----------
         Income before income taxes     21,849        1,795         20,054        21,515       (6.8)%             4.6 %        5.4 %
     
  Income taxes                           6,336          638          5,698         7,745      (26.4)%            28.4 %       36.0 %
                                     -----------  -----------    ------------ -----------   ---------       ------------  -----------
         Net income               $     15,513        1,157         14,356        13,770        4.3 %             3.3 %        3.5 %
                                     ===========  ===========    ============ ===========   =========       ============  ===========
  
  Net income per share                   $1.22        $0.09          $1.13         $1.18       (4.2)%
  Net income per share (assuming                   
  dilution)                              $1.19        $0.09          $1.10         $1.15       (4.3)%