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) August 20, 1998
  
                                     CULP, INC.
  
              (Exact name of registrant as specified in its charter)
  
  
          North Carolina                  0-12781                56-1001967
  
   (State or other jurisdiction    (Commission File No.)       (IRS Employer
         of incorporation)                                  Identification No.)
  
  
  
                               101 South Main Street
                         High Point, North Carolina  27260
                     (Address of principal executive offices)
                                  (336) 889-5161
               (Registrant's telephone number, including area code)
  
  
  
  
                                                                                
           (Former name or former address, if changed since last report)
  
  
  
  
  
  --------------------------------------------------------------------------------
  
  
  
  
  <PAGE>
  
  
  Item 5. Other Events
  
  See  attached  Press  Release (2 pages) and  Financial  Information  Release (10
  pages),  both dated  August 20, 1998,  related to the fiscal 1999 first  quarter
  ended August 2, 1998.
  
  Forward  Looking  Information.  This Report  contains  statements  that could be
  deemed   "forward-looking   statements"   within  the  meaning  of  the  federal
  securities  laws,   which  statements  are  inherently   subject  to  risks  and
  uncertainties.   Forward-looking   statements   are   statements   that  include
  projections,   expectations  or  beliefs  about  future  events  or  results  or
  otherwise are not  statements  of historical  fact.  Such  statements  are often
  characterized  by  qualifying  words such as  "expect,"  "believe,"  "estimate,"
  "plan" and "project"  and their  derivatives.  Factors that could  influence the
  matters  discussed in such  statements  include the level of housing  starts and
  sales of existing homes,  consumer confidence,  trends in disposable income, and
  general  economic  conditions.  Decreases  in these  economic  indicators  could
  have a  negative  effect on the  Company's  business  and  prospects.  Likewise,
  increases in interest rates,  particularly  home mortgage  rates,  and increases
  in consumer  debt or the general  rate of  inflation,  could  affect the Company
  adversely.  In  addition,  the  value  of the U. S.  dollar  relative  to  other
  currencies  can  affect  the   competitiveness  of  the  Company's  products  in
  international    markets.    Economic   and   political   instability   in   the
  international area could also affect the demand for the Company's products.
   
  
  
                                    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:    Phillip W. Wilson                  
                                       Vice President and
                                       Chief Financial Officer
  
  
   
  
  
  
  Dated:   August 20, 1998
  
  
  <PAGE>
  CULP Reports First Quarter Results
  Aug. 20, 1998
  
  FOR IMMEDIATE RELEASE
  
                         CULP REPORTS FIRST QUARTER RESULTS
  
  HIGH POINT,  N. C. (Aug.  20,  1998) - Culp,  Inc.  (NYSE:  CFI) today  reported
  results for the first quarter of its 1999 fiscal year.
  
        For the three months ended August 2, 1998,  Culp  reported  that net sales
  were  $110.7  million  compared  with  $99.5  million  a year ago.  The  company
  reported  a net loss for the  quarter  of $2.6  million,  or  $0.20  per  share,
  compared with net income of $2.9  million,  or $0.22 per share  diluted,  in the
  year-earlier quarter.
  
        "We had  previously  indicated  our  expectation  for a net  loss  for the
  first  quarter,"  said  Robert G.  Culp,  III,  chief  executive  officer.  "The
  principal  development  that  affected  our  performance  was an  industry  wide
  pattern  of  weakness  in  international   sales  of  printed  flock  upholstery
  fabrics.  We also  experienced  some  pressure on margins on other product lines
  that  are  marketed  primarily  to  U.S.-based  manufacturers.  We  did  achieve
  higher sales for the quarter;  but that gain was due to the  contributions  from
  Phillips  Mills and Artee  Industries,  which were  acquired  subsequent  to the
  year-earlier period."
  
        "The first fiscal  quarter is  historically  not the strongest  period for
  our industry  due to vacations  and  seasonal  plant  closings.  The backdrop of
  consumer  spending in the U.S. on home  furnishings  remains  favorable,  and we
  are  encouraged  about  the  positive  response  by  manufacturers  to  our  new
  patterns and  textures  that will be  introduced  to  retailers  this fall.  Our
  immediate  focus  obviously  must be  restoring  Culp's  profitability.  We have
  begun taking  actions to reduce costs,  especially  in those product  categories
  that  typically have been marketed  internationally.  Although we are optimistic
  about the  potential  for longer term gains in our  business  outside the United
  States, we have moved to bring  manufacturing  capacity in line with the current
  level of demand."
  
       Culp added,  "During the first quarter, we significantly  strengthened our
  management  structure.  We unified  related  products  and  marketing  programs,
  thereby  reducing  the number of  business  units  from six to four.  We believe
  that  grouping   related   business   operations  will  promote  better  working
  communications  and  lead to  more  effective  customer  service  and  marketing
  programs.   The  initial   momentum  for  this  realignment  in  our  management
  structure was based on long range  planning,  but we believe the changes  should
  also help the near term recovery in our bottom line."
  
        Culp,   Inc.  is  the  world's  largest   manufacturer   and  marketer  of
  upholstery  fabrics for furniture and is a leading  producer of mattress ticking
  for bedding.  The Company's  fabrics are used  principally  in the production of
  residential and commercial furniture and bedding products.
  
                                     CULP, INC.
                           Condensed Financial Highlights
                                     (Unaudited)
                                                      Three Months Ended      
                                                  August 2,         August 3,
                                                    1998              1997    
                                                 (13 weeks)        (14 weeks)
  Net sales                                    $ 110,667,000     $  99,498,000
  Net income (loss)                            $  (2,640,000)    $   2,850,000
  Net income (loss) per share:
    Basic                                      $       (0.20)    $        0.23
    Diluted                                    $       (0.20)    $        0.22
  Average shares outstanding:
    Basic                                          13,000,000       12,631,000
    Diluted                                        13,203,000       12,929,000
  
  This  release  contains   statements  that  could  be  deemed   "forward-looking
  statements,"   within  the  meaning  of  the  federal   securities   laws.  Such
  statements are inherently  subject to risks and  uncertainties.  Forward-looking
  statements  are statements  that include  projections,  expectations  or beliefs
  about future  events or results or otherwise  are not  statements  of historical
  fact.  Such  statements  are often  characterized  by  qualifying  words such as
  "expect,"  "believe,"  "estimate,"  "plan" and "project" and their  derivatives.
  Factors that could influence the matters  discussed in such  statements  include
  the level of housing starts and sales of existing  homes,  consumer  confidence,
  trends in  disposable  income and  general  economic  conditions.  Decreases  in
  these  economic  indicators  could  have a  negative  effect  on  the  company's
  business and  prospects.  Likewise,  increases in interest  rates,  particularly
  home  mortgage  rates,  and  increases  in consumer  debt or the general rate of
  inflation,  could  affect  the  company  adversely.  Because  of the  increasing
  percentage  of  the  company's   sales  derived  by   international   shipments,
  strengthening  of the  U.S.  dollar  against  other  currencies  could  make the
  company's  products less  competitive  on the basis of price in markets  outside
  the United  States.  Additionally,  economic and  political  instability  in the
  international area could affect the demand for the company's products.
  
                                        -END-
  <PAGE>
  
  
                         CULP, INC. FINANCIAL INFORMATION RELEASE
                         CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                 FOR THREE MONTHS ENDED AUGUST 2, 1998 AND AUGUST 3, 1997
  
                     (Amounts in Thousands, Except for Per Share Data)
  <TABLE>
  <CAPTION>
  
                                                THREE MONTHS ENDED (UNAUDITED)
                                    --------------------------------------------------------
  
                                          Amounts                         Percent of Sales
                                    ---------------------                --------------------
                                   August 2,   August 3,   % Over
                                       1998       1997      (Under)        1999       1998
                                    ---------  ---------- ----------     ---------  ---------
  
  <S>                            <C>              <C>        <C>           <C>        <C>    
  Net sales                      $   110,667      99,498     11.2 %        100.0 %    100.0 %
  Cost of sales                       97,056      82,765     17.3 %         87.7 %     83.2 %
                                    ---------  ---------- ----------     ---------  ---------
      Gross profit                    13,611      16,733    (18.7) %        12.3 %     16.8 %
  
  Selling, general and
    administrative expenses           14,473      10,916     32.6  %        13.1 %     11.0 %
                                    ---------  ---------- ----------     ---------  ---------
      Income (loss) from operations     (862)      5,817   (114.8) %        (0.8) %     5.8 %
        
  
  Interest expense                     2,361       1,280     84.5  %         2.1 %      1.3 %
  Interest income                        (53)        (90)   (41.1) %        (0.0)%     (0.1)%
  Other expense (income), net            770         242    218.2  %         0.7 %      0.2 %
                                    ---------  ---------- ----------     ---------  ---------
        Income (loss) before        
           income taxes               (3,940)      4,385   (189.9) %        (3.6)%      4.4 % 
  
  Income taxes  *                     (1,300)      1,535   (184.7) %        33.0 %     35.0 %
                                    ---------  ---------- ----------     ---------  ---------
        Net income (loss)       $     (2,640)      2,850   (192.6) %        (2.4)%      2.9 %
                                    =========  ========== ==========     =========  =========
  
  Net income (loss) per share         ($0.20)      $0.23   (187.0) %
  Net income (loss) per share,            
    assuming dilution                 ($0.20)      $0.22   (190.9) %
  Dividends per share                $0.0350     $0.0350      0.0  %
  Average shares outstanding          13,000      12,631      2.9  %
  Average shares outstanding,       
    assuming dilution                 13,203      12,929      2.1  %
  
  </TABLE>
  
  
  * Percent of sales column is  calculated  as a % of income  (loss) before income
  taxes.
  <PAGE>
  
  
  
                           CULP, INC. FINANCIAL INFORMATION RELEASE
                                  CONSOLIDATED BALANCE SHEETS
                        AUGUST 2, 1998, AUGUST 3, 1997 AND MAY 3, 1998
                                           Unaudited
                                    (Amounts in Thousands)
  <TABLE>
  <CAPTION>
  
                                             Amounts                 Increase
                                    ---------------------------
                                     August 2,     August 3,        (Decrease)          *
                                                               ----------------------  May 3,
                                        1998         1997       Dollars     Percent     1998
                                    -------------  ----------  ----------   ---------  -------
  Current assets
  <S>                             <C>                  <C>        <C>       <C>         <C>  
       Cash and cash investments  $        1,520       1,843         (323)   (17.5) %    2,312
       Accounts receivable                63,833      54,086        9,747     18.0  %   73,773
       Inventories                        79,358      60,715       18,643     30.7  %   78,594
       Other current assets                7,511       6,126        1,385     22.6  %    7,808
                                    -------------  ----------  ----------   ---------  -------
           Total current assets          152,222     122,770       29,452     24.0  %  162,487
               
                                                                
  Restricted investments                   4,074       8,186      (4,112)    (50.2) %    4,021
  Property, plant & equipment, net       127,287      97,128      30,159      31.1  %  128,805
  Goodwill                                54,798      22,111      32,687     147.8  %   55,162
  Other assets                             4,317       3,124       1,193      38.2  %    4,340
                                    -------------  ----------  ----------   ---------  -------
                                                                             
           Total assets           $      342,698     253,319      89,379      35.3  %  354,815
                                    =============  ==========  ==========   =========  =======
  
                                                                             
                                                                             
  Current liabilities
       Current maturities of      
            long-term debt        $        3,250         100       3,150    3,150.0 %    3,325
       Accounts payable                   31,710      20,154      11,556       57.3 %   37,214
       Accrued expenses                   13,856      11,972       1,884       15.7 %   17,936
       Income taxes payable                    0       1,575      (1,575)    (100.0)%    1,282
                                    -------------  ----------  ----------   ---------  -------
           Total current liabilities      48,816      33,801      15,015      44.4  %   59,757
               
                                                                             
  Long-term debt                         154,383      96,016      58,367      60.8  %  152,312
  
                                                                             
  Deferred income taxes                   11,227       9,965       1,262      12.7  %   11,227
                                    -------------  ----------  ----------   ---------  -------
           Total liabilities             214,426     139,782      74,644      53.4  %  223,296
                                                                                          
  Shareholders' equity                   128,272     113,537      14,735      13.0  %  131,519
                                    -------------  ----------  ----------   ---------  -------
                                                                          
           Total liabilities and                                                       
              shareholders' equity $     342,698     253,319      89,379      35.3  %  354,815
                                    =============  ==========  ==========   =========  =======
                                                                             
  Shares outstanding                      12,995      12,650         345       2.7  %   13,007
                                    =============  ==========  ==========   =========  =======
  </TABLE>
  
  
  * Derived from audited financial statements.
  <PAGE>
  
                                     CULP, INC.
                            FINANCIAL INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE THREE MONTHS ENDED AUGUST 2, 1998 AND AUGUST 3, 1997
                                      Unaudited
                               (Amounts in Thousands)
  
  <TABLE>
  <CAPTION>
  
                                                             THREE MONTHS ENDED
                                                          ------------------------
  
                                                                     Amounts
                                                           ----------------------
                                                            August 2,   August 3,
                                                               1998       1997
                                                           ----------- ----------
  
  Cash flows from operating activities:                                    
  <S>                                                     <C>              <C>  
      Net income (loss)                                   $     (2,640)     2,850
      Adjustments to reconcile net income (loss) to net
        cash provided by (used in) operating activities:
           Depreciation                                          4,376      3,256
           Amortization of intangible assets                       398        181
           Changes in assets and liabilities:
             Accounts receivable                                 9,940      2,605
             Inventories                                          (764)    (7,252)
             Other current assets                                  297       (676)
             Other assets                                          (11)      (147)
             Accounts payable                                   (3,017)    (5,852)
             Accrued expenses                                   (4,080)    (2,923)
             Income taxes payable                               (1,282)        (5)
                                                              --------- ----------
          Net cash provided by (used in) operating activities    3,217     (7,963)
                                                              --------- ----------
  Cash flows from investing activities:                                    
      Capital expenditures                                      (2,858)    (9,153)
      Purchases of restricted investments                          (53)    (8,590)
      Sale of restricted investments                                 0     11,422
                                                            ----------- ----------
          Net cash used in investing activities                 (2,911)    (6,321)
                                                            ----------- ----------
  Cash flows from financing activities:                                    
      Proceeds from issuance of long-term debt                   2,071     19,500
      Principal payments on long-term debt                         (75)       (25)
      Change in accounts payable-capital expenditures           (2,487)    (3,897)
      Dividends paid                                              (455)      (443)
      Common stock issued (purchased)                             (152)       162
                                                            ----------- ----------
          Net cash provided by (used in)financing activities    (1,098)    15,297
                                                            ----------- ----------
                                                                           
  Increase (decrease) in cash and cash investments                (792)     1,013
                                                                           
  Cash and cash investments at beginning of period               2,312        830
                                                            ----------- ----------
                                                                           
  Cash and cash investments at end of period               $     1,520      1,843
                                                            =========== ==========
  </TABLE>
  
  <PAGE>
                          CULP, INC. FINANCIAL INFORMATION RELEASE
                                     FINANCIAL ANALYSIS
                                       AUGUST 2, 1998
  
  <TABLE>
  <CAPTION>
  
                                                     
                                          FISCAL 98                FISCAL 99
                                          --------  ---------------------------------------   ---------
                                            Q1         Q1        Q2        Q3        Q4         LTM
                                          --------  ---------------------------------------   ---------
  <S>                                     <C>         <C>                                     <C>
  INVENTORIES
        Inventory turns                      5.8         4.9
  
  RECEIVABLES
        Days sales in receivables            50          48
        Percent current & less than
           30 days past due                 95.0%       93.8%
        
  WORKING CAPITAL
        Current ratio                        3.6         3.1
        Working capital turnover (4)         5.1         4.5
        Operating working capital (4)    $94,647    $111,481
        
  PROPERTY, PLANT & EQUIPMENT
        Depreciation   rate                 7.1%        7.7%
        Percent property, plant &
           equipment are depreciated       46.8%       43.8%
        Capital  expenditures            $35,879 (1)  $2,858
       
  
  PROFITABILITY
        Return on average total capital     7.6%      (1.6%)                                     6.1%
        Return on average equity           10.2%      (8.1%)                                     8.2%
        Net income (loss) per share        $0.23     ($0.20)                                    $0.79
        Net income (loss) per share    
          (diluted)                        $0.22     ($0.20)                                    $0.77
  
  LEVERAGE (3)
        Total liabilities/equity          123.1%      167.2%
        Funded debt/equity                 77.4%      119.7%
        Funded debt/capital employed       43.6%       54.5%
        Funded debt                      $87,930    $153,559
        Funded debt/EBITDA (LTM) (6)        2.18        3.75
        EBITDA/Interest expense,                        
          net (LTM)                          9.1         4.9
  
  OTHER
        Book value per share               $8.98       $9.87
        Employees at quarter end           3,180       4,230
        Sales per employee (annualized) $125,000    $103,000
        Capital employed (3)            $201,467    $281,831
        Effective income tax rate          35.0%       33.0%
        EBITDA (2)                        $9,012      $3,142                                  $38,971
        EBITDA/net sales                    9.1%        2.8%                                     8.0%
  </TABLE>
       
  
    (1) Expenditures for entire year
    (2) Earnings before interest, income taxes, and depreciation & amortization.
    (3) Long-term debt, funded debt and capital employed are all net of restricted
        investments.
    (4) Working capital for this calculation is accounts receivable,inventories 
        and accounts payable.
    (5) LTM represents"Latest Twelve Months"
    (6) EBITDA includes capitalized interest and pro forma amounts for Wetumpka  
        and Artee acquisitions.
  
  <PAGE>
  
  
  
                    CULP, INC. FINANCIAL INFORMATION RELEASE
                     SALES BY PRODUCT CATEGORY/BUSINESS UNIT
            FOR THREE MONTHS ENDED AUGUST 2, 1998 AND AUGUST 3, 1997
  
  <TABLE>
  <CAPTION>
  
                             (Amounts in thousands)
   
                                         THREE MONTHS ENDED (UNAUDITED)
                               ---------------------------------------------------
  
                                    Amounts                     Percent of Total
                                                                    Sales
                               ------------------              -------------------
                              August 2, August 3,   % Over
                                1998      1997      (Under)    1999      1998
  Product Category/Business Unit
  -------------------------    --------  --------  ----------  --------  ---------
  
  <S>                         <C>          <C>      <C>        <C>        <C>   
  Upholstery Fabrics
      Culp Decorative Fabrics $  51,445    39,814    29.2 %     46.5 %     40.0 %
  
      Culp Velvets/Prints        29,994    38,397   (21.9)%     27.1 %     38.6 %
                               --------  --------  ----------  --------  ---------
                                 81,439    78,211     4.1 %     73.6 %     78.6 %
  
  Mattress Ticking
      Culp Home Fashions         22,632    21,287     6.3 %     20.5 %     21.4 %
  
  Yarn
     Culp Yarn                    6,596         0   100.0 %      6.0 %      0.0 %
                               --------  --------  ----------  --------  ---------
  
                            * $ 110,667    99,498    11.2 %     100.0%    100.0 %
                               ========  ========  ==========  ========  =========
  
  
  
  * U.S.  sales were  $84,310 and $74,407 for the three  months of fiscal 1999 and
  fiscal 1998,  respectively.  The percentage increase in U.S. sales was 13.3% for
  the three months.
  
  </TABLE>
  
  <PAGE>
  
  
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                       INTERNATIONAL SALES BY GEOGRAPHIC AREA
              FOR THREE MONTHS ENDED AUGUST 2, 1998 AND AUGUST 3, 1997
  
  <TABLE>
  <CAPTION>
  
                               (Amounts in thousands)
  
                                         THREE MONTHS ENDED (UNAUDITED)
                           -------------------------------------------------------
  
                                   Amounts                       Percent of Total
                                                                     Sales
                           ---------------------             ---------------------
                             August 2,   August      % Over
                                            3,
     Geographic Area           1998        1997     (Under)     1999       1998
  -----------------------  ----------  ---------  ---------  ---------   ---------
  <S>                    <C>              <C>     <C>         <C>        <C>   
  North America         
   (Excluding USA)       $     7,253      7,044     3.0 %       27.5 %     28.1 %
  Europe                       3,683      4,440   (17.0)%       14.0 %     17.7 %
  Middle East                  8,300      6,564    26.4 %       31.5 %     26.2 %
  Far East & Asia              4,868      5,464   (10.9)%       18.5 %     21.8 %
  South America                1,000        339   195.0 %        3.8 %      1.4 %
  All other areas              1,253      1,240     1.0 %        4.8 %      4.9 %
                           ----------  ---------  ---------  ---------   ---------
  
                         $    26,357     25,091    5.0 %      100.0 %    100.0 %
                           ==========  =========  =========  =========   =========
  
  </TABLE>
  
  
  International  sales,  and the  percentage of total sales,  for each of the last
  seven fiscal years  follows:  fiscal 1992-$  37,913 (20%);  fiscal 1993-$ 41,471
  (21%);  fiscal 1994-$ 44,038  (18%);  fiscal 1995-$ 57,971 (19%);  fiscal 1996-
  $77,397 (22%);  fiscal 1997-$  101,571  (25%);  and fiscal 1998-$ 137,223 (29%).
  International sales for the current quarter represented 23.8% and 25.2% for 1999
  and 1998, respectively.
  
  Certain amounts for fiscal year 1998 have been  reclassified to conform with the
  fiscal year 1999 presentation.
  
  
  <PAGE>
  
  
                                     Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1997 vs 1998 vs 1999
                                      Unaudited
                               (Amounts in thousands)
  <TABLE>
  <CAPTION>
  
                                              Fiscal 1997                                     Fiscal 1998                    
                             ----------------------------------------------  ----------------------------------------------  
  Product Category/Business Units  Q1       Q2        Q3       Q4     TOTAL        Q1       Q2       Q3       Q4      TOTAL  
   ---------------------------
  <S>                            <C>      <C>       <C>      <C>     <C>          <C>    <C>      <C>      <C>      <C>     
  Upholstery Fabrics
      Culp Decorative Fabrics    38,966    45,723   39,342   43,699  167,730      39,814  56,781   53,415   60,155   210,165 
      Culp Velvets/Prints        34,867    40,233   40,387   40,980  156,467      38,397  43,928   44,020   45,044   171,389 
                               ----------------------------------------------  ----------------------------------------------
                                 73,833    85,956   79,729   84,679  324,197      78,211 100,709   97,435  105,199   381,554 
  
  Mattress Ticking
      Culp Home Fashions         16,696    19,248   17,739   20,999   74,682      21,287  22,217   20,261   23,520    87,285 
  
  Yarn
      Culp Yarn                                                                                                              
                                      -         -        -        -        -           -       -      761    7,115     7,876 
                               ----------------------------------------------  ----------------------------------------------
  
                                 90,529   105,204   97,468  105,678  398,879      99,498 122,926  118,457  135,834   476,715 
                               ==============================================  ==============================================
  
                                     Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1997 vs 1998 vs 1999
                                      Unaudited
                               (Amounts in thousands)
  
                                                 Fiscal 1999
                             -----------------------------------------------
  Product Category/Business Units    Q1        Q2       Q3        Q4    TOTAL
   ---------------------------
  
  Upholstery Fabrics
      Culp Decorative Fabrics    51,445
      Culp Velvets/Prints        29,994
                            -----------------------------------------------
                                 81,439
  
  Mattress Ticking
      Culp Home Fashions         22,632
  
  Yarn
      Culp Yarn                    
                                  6,596
                            -----------------------------------------------
                                110,667
                            ===============================================
  </TABLE>
  <TABLE>
  <CAPTION>
  <PAGE>
  
                     Percent increase(decrease) from prior year:
   ----------------------------------------------------------------------------------------------------------------------------
                                               Fiscal 1997                                     Fiscal 1998                    
                               ----------------------------------------------  ---------------------------------------------- 
  Product Category/Business Units   Q1       Q2        Q3       Q4     TOTAL        Q1       Q2       Q3       Q4      TOTAL  
   ---------------------------
  <S>                              <C>       <C>      <C>     <C>        <C>         <C>    <C>     <C>      <C>       <C>  
  Upholstery Fabrics
      Culp Decorative Fabrics      18.3      12.4      0.2     (4.4)     5.8         2.2    24.2     35.8     37.7      25.3  
      Culp Velvets/Prints          48.2      25.4     26.9      7.1     24.5        10.1     9.2      9.0      9.9       9.5  
                               ----------------------------------------------  ---------------------------------------------- 
                                   30.8      18.1     12.2      0.8     14.0         5.9    17.2     22.2     24.2      17.7  
  
  Mattress Ticking
      Culp Home Fashions            5.1       7.4     15.3     15.5     10.8        27.5    15.4     14.2     12.0      16.9  
  
  Yarn
      Culp Yarn                                                                                                               
                                      -         -        -        -        -           -       -    100.0    100.0     100.0  
                               ----------------------------------------------  ---------------------------------------------- 
  
                                   25.1      16.0     12.7      3.4     13.4         9.9    16.8     21.5     28.5      19.5  
                               ==============================================  ============================================== 
  
    Overall Growth Rate
  
  Internal(without acquisitions)   25.1      16.0     12.7      3.4     13.4         9.9     6.6      9.2     11.6       9.3  
  
  External                            -         -        -        -        -           -    10.2     12.3     16.9      10.2  
                              ----------------------------------------------  ----------------------------------------------  
                                   25.1      16.0     12.7      3.4     13.4         9.9    16.8     21.5     28.5      19.5  
                              ==============================================  ==============================================  
  
                     Percent increase(decrease) from prior year:
  ----------------------------------------------------------------------------
                                                   Fiscal 1999
                               -----------------------------------------------
  Product Category/Business Units    Q1        Q2        Q3       Q4    TOTAL
   ---------------------------
  Upholstery Fabrics
      Culp Decorative Fabrics      29.2
      Culp Velvets/Prints         (21.9)
                                ----------------------------------------------
                                    4.1
  
  Mattress Ticking
      Culp Home Fashions            6.3
  
  Yarn
      Culp Yarn                
                                  100.0
                               ----------------------------------------------
  
                                   11.2
                               ==============================================
  
    Overall Growth Rate
  
  Internal(without acquisitions)  (4.6)
  
  External                         15.8
                              ===============================================
                                   11.2
                              ===============================================
  </TABLE>
                                                 
  
  
  
  <PAGE>
  
                     CULP, INC. FINANCIAL INFORMATION RELEASE
                               FINANCIAL NARRATIVE
       for the three month periods ended August 2, 1998 and August 3, 1997
  
  
  
  
  INCOME STATEMENT COMMENTS
  
        GENERAL  -  Net  sales  increased  11.2%  to  $110.7  million,  and  the
  company  reported a net loss of $2.6 million  compared with net income of $2.9
  million  for the first  quarter of last year.  The first  quarter  included 13
  weeks versus 14 weeks in the year-earlier period.
  
        The  company  has  compiled  a longer  term  record of  growth  based on
  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   53%  of  net  sales   during   the   first   quarter;
     additionally,  no one customer  accounted  for more than 7% of sales during
     the first quarter of fiscal 1999;
  
  Design  Innovation - investing  in the design of new  patterns  and  textures.
     The company has  significantly  increased  resources  (both  designers  and
     computer-aided  design (CAD) systems) in the design and product development
     areas in each  business  unit.  In January  1998,  the  company  opened its
     state-of-the-art design center in Burlington,  North Carolina. The facility
     has  consolidated  most of the company's  design  resources in one facility
     which offers advanced CAD systems for the design process;
  
  Vertical  Integration  - realizing  additional  manufacturing  integration  by
     producing various raw material  components that are used in the manufacture
     of its products; and
  
  Ability to Integrate  Acquisitions - investing in selective  acquisitions that
     strengthen existing marketing positions.
  
        NET SALES - Compared  with the first  quarter  of last year,  upholstery
  fabric  sales  increased  4.1%  to  $81.4  million;   mattress  ticking  sales
  increased 6.3% to $22.6 million;  and yarn sales  contributed $6.6 million for
  the  quarter  (See  Sales by  Business  Unit  schedule  on Page 5 and Sales by
  Business  Unit - Trend  Analysis on Page 7). The growth in  upholstery  fabric
  sales for the first quarter was due to the  contribution  of $9.1 million from
  Phillips  Mills which was acquired  after the close of the quarter a year ago.
  Excluding  that  incremental  volume,  upholstery  fabric sales were down 7.5%
  from a year  ago.  International  sales  were  up  5.0%  for  the  quarter.  A
  significant  decline  in sales to Europe  and the Far  East/Asia  (principally
  Russia) was offset by higher shipments to the Middle East.
  
  
  <PAGE>
                     CULP, INC. FINANCIAL INFORMATION RELEASE
                               FINANCIAL NARRATIVE
       for the three month periods ended August 2, 1998 and August 3, 1997
  
  
  
        The  decline in sales of  upholstery  fabrics was due  principally  to a
  pronounced  slowdown in international  sales of wet and heat-transfer  printed
  flock  fabrics.  This trend,  which the company  believes has  affected  other
  manufacturers  of  upholstery  fabrics,  became  apparent  after  the close of
  fiscal  1998  and  has  been  persistent  thus  far in  fiscal  1999.  A large
  percentage  of the  company's  sales of this product  line were being  shipped
  directly or  indirectly  to customers  in the  emerging  markets of Russia and
  other former Soviet  countries,  India and Eastern Europe.  All of these areas
  are generally  experiencing very weak economic conditions which, in turn, have
  affected  demand for  furniture  and other home  furnishings.  The company has
  significantly  curtailed  production  schedules  for  these  fabrics  and  has
  shifted its  marketing  focus for this product  category to  geographic  areas
  where  demand   remains   favorable.   The  company  is  seeking  to  build  a
  diversified  geographic  base of  customers  internationally  to minimize  the
  exposure to economic uncertainties in any single geographic area.
  
        Lower  international  sales also affected the  company's  sales of other
  upholstery  fabrics during the first  quarter.  The  year-to-year  comparisons
  were also  influenced  by the fact that  there was one less week in the period
  (13)  versus  a  year  ago  (14).  Because  of  industry  wide  vacations  and
  scheduled  plant  shutdowns,  the first  quarter  is  historically  the lowest
  period of the year for net sales.
   
        The  increased  sales by Culp Home  Fashions  during  the first  quarter
  marks a continuation  of the expansion that this business unit has experienced
  in recent years.  Sales are benefiting  from the  introduction  of new designs
  and  fabric  constructions  as well  as the  company's  vertical  integration.
  Culp's ability to manufacture the jacquard greige,  or unfinished,  goods that
  are then printed to produce  mattress ticking has aided the company in meeting
  faster delivery schedules and providing improved overall customer service.
  
        GROSS  PROFIT - Gross  profit  declined  18.7% for the quarter  versus a
  year  ago.  The  decline  was due  principally  to lower  margins  at the Culp
  Decorative  Fabrics and Culp  Velvets/Prints  units.  Culp Decorative  Fabrics
  experienced  considerable  unfavorable   manufacturing  variances  during  the
  quarter.   Factors   contributing  to  these  variances  included  lower  than
  expected  sales  and  competitive  pressure  on  pricing,  especially  in  the
  jacquard product category.  The lower gross profit at Culp  Velvets/Prints was
  due to the unexpectedly sharp decline in international  sales of printed flock
  fabrics.  The  lower  sales  led to excess  manufacturing  capacity  and lower
  absorption of fixed costs.
  
        The gross  margins  are  expected  to  remain  under  pressure,  but the
  company  has  instituted  a number of  actions  to  improve  profitability.  A
  reorganization  from six to four  business  units during the first quarter has
  grouped  related  operations  together  and has been  accompanied  by  several
  changes in managerial  positions.  Steps underway  related to this realignment
  include a  significant  reduction in the capacity  for  manufacturing  printed
  flock fabrics,  comprehensive  programs to reduce  inventories  and an intense
  effort to reduce operating expenses and raise productivity.
  
        S,G&A  EXPENSES  -  S,G&A  expenses  for  the  first  quarter  rose as a
  percentage  of sales to 13.1%  from 11.0 % for the same  period of last  year.
  The higher  proportion  of SG&A  expenses was also  affected by the lower than
  expected  sales.  The  increase in absolute  dollars  from a year ago resulted
  from the  Phillips  Mills and Artee  acquisitions,  investment  in  additional
  design  resources,  increased  costs in sampling  new product and higher costs
  for marketing programs.
  
  <PAGE>
  
                     CULP, INC. FINANCIAL INFORMATION RELEASE
                               FINANCIAL NARRATIVE
       for the three month periods ended August 2, 1998 and August 3, 1997
  
  
  
        INTEREST  EXPENSE - Interest  expense  increased  85% compared  with the
  year-earlier  period  due  to  higher  average  borrowings  outstanding.   The
  increased  borrowings  related  principally to the acquisitions  during fiscal
  1998 of Phillips Mills and Artee  Industries and the relatively  high level of
  capital expenditures in fiscal 1998.
  
        OTHER  EXPENSE  (INCOME),  NET - Other  expense  (income)  increased  to
  $770,000  from  $242,000  in  the   year-earlier   quarter.   A  major  factor
  contributing  to  the  increase  was  amortization  of  goodwill  due  to  the
  acquisitions  during  fiscal 1998.  Additionally,  a  non-recurring  charge of
  $311,000 was incurred to writeoff certain fixed assets.
  
        INCOME  TAXES - The  effective  tax  rate  for  the  quarter  was  33.0%
  compared with 35.0% for the prior year.
  
        EBITDA - EBITDA for the  quarter  decreased  to $3.1  million  from $9.0
  million  for last  year's  first  quarter  and  represented  2.8% of net sales
  compared with 9.1% of net sales for the same period of last year.
  
  
  BALANCE SHEET COMMENTS
  
        WORKING  CAPITAL - Accounts  receivable  increased 18.0 % from August 3,
  1997,  while  sales  increased  11.2  % for  the  first  quarter.  Days  sales
  outstanding  represented 48 days,  down from 50 days at August 3, 1997, and 49
  days at May 3,  1998.  Accounts  receivable  increased  at a faster  rate than
  sales  because  of the  increasing  mix of  international  sales and  mattress
  ticking sales,  which carry longer payment terms than U.S.  upholstery  fabric
  sales.  Additionally,  the aging of accounts receivable was 93.8 % current and
  less  than 30 days  past due  versus  95.0% at  August  3,  1997.  Inventories
  increased 30.7 % from August 3, 1997, and inventory  turns were 4.9 versus 5.8
  for last year's first  quarter.  The  inventory  increase is partly due to the
  prior year acquisitions and a build up of yarn in the Culp Decorative  Fabrics
  business unit.  Operating working capital  (comprised of accounts  receivable,
  inventory  and  accounts  payable)  increased  to $111.5  million at August 2,
  1998, for the reasons  mentioned above,  from $94.6 million at August 3, 1997.
  The balance at May 3, 1998 was $115.2 million.
  
        PROPERTY,  PLANT  AND  EQUIPMENT  - For  fiscal  1999,  the  company  is
  planning to significantly  reduce its capital spending to $10-$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 54.5% at August 2,  1998,  up from  43.6% at August 3,  1997,  and up from
  53.5% at May 3, 1998.  Funded  debt was $153.6  million at August 2, 1998,  up
  from  $87.9  million  at August 3, 1997 and up from  $151.6  million at May 3,
  1998. (Funded debt equals long-term debt,  including current maturities,  less
  restricted  investments,  which represent unspent IRB funds).  The increase in
  funded debt from May 3, 1998 resulted  primarily from capital  expenditures of
  $2.9  million  and  a  decrease  in  accounts   payable   related  to  capital
  expenditures  of $2.5 million,  which were partially  offset by operating cash
  flow of $3.2 million.
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text: --------------------------------------------------------------------------------
  
                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549
  
                                     ---------
  
                                     Form 8-K
  
                                  CURRENT REPORT
  
                 Pursuant to Section 13 or 15(d) of the Securities
                               Exchange Act of 1934
  
                                   -------------
  
          Date of Report (Date of earliest event reported) August 20, 1998
  
                                     CULP, INC.
  
              (Exact name of registrant as specified in its charter)
  
          North Carolina                  0-12781                56-1001967
  
   (State or other jurisdiction    (Commission File No.)       (IRS Employer
         of incorporation)                                  Identification No.)
  
                               101 South Main Street
                         High Point, North Carolina  27260
                     (Address of principal executive offices)
                                  (336) 889-5161
               (Registrant's telephone number, including area code)
  
                                                                                
           (Former name or former address, if changed since last report)
  
  --------------------------------------------------------------------------------
  Item 5. Other Events
  
  See  attached  Press  Release (2 pages) and  Financial  Information  Release (10
  pages),  both dated  August 20, 1998,  related to the fiscal 1999 first  quarter
  ended August 2, 1998.
  
  Forward  Looking  Information.  This Report  contains  statements  that could be
  deemed   "forward-looking   statements"   within  the  meaning  of  the  federal
  securities  laws,   which  statements  are  inherently   subject  to  risks  and
  uncertainties.   Forward-looking   statements   are   statements   that  include
  projections,   expectations  or  beliefs  about  future  events  or  results  or
  otherwise are not  statements  of historical  fact.  Such  statements  are often
  characterized  by  qualifying  words such as  "expect,"  "believe,"  "estimate,"
  "plan" and "project"  and their  derivatives.  Factors that could  influence the
  matters  discussed in such  statements  include the level of housing  starts and
  sales of existing homes,  consumer confidence,  trends in disposable income, and
  general  economic  conditions.  Decreases  in these  economic  indicators  could
  have a  negative  effect on the  Company's  business  and  prospects.  Likewise,
  increases in interest rates,  particularly  home mortgage  rates,  and increases
  in consumer  debt or the general  rate of  inflation,  could  affect the Company
  adversely.  In  addition,  the  value  of the U. S.  dollar  relative  to  other
  currencies  can  affect  the   competitiveness  of  the  Company's  products  in
  international    markets.    Economic   and   political   instability   in   the
  international area could also affect the demand for the Company's products.
   
  
                                    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:    Phillip W. Wilson                  
                                       Vice President and
                                       Chief Financial Officer
  
   
  
  Dated:   August 20, 1998
  CULP Reports First Quarter Results
  Aug. 20, 1998
  
  FOR IMMEDIATE RELEASE
  
                         CULP REPORTS FIRST QUARTER RESULTS
  
  HIGH POINT,  N. C. (Aug.  20,  1998) - Culp,  Inc.  (NYSE:  CFI) today  reported
  results for the first quarter of its 1999 fiscal year.
  
        For the three months ended August 2, 1998,  Culp  reported  that net sales
  were  $110.7  million  compared  with  $99.5  million  a year ago.  The  company
  reported  a net loss for the  quarter  of $2.6  million,  or  $0.20  per  share,
  compared with net income of $2.9  million,  or $0.22 per share  diluted,  in the
  year-earlier quarter.
  
        "We had  previously  indicated  our  expectation  for a net  loss  for the
  first  quarter,"  said  Robert G.  Culp,  III,  chief  executive  officer.  "The
  principal  development  that  affected  our  performance  was an  industry  wide
  pattern  of  weakness  in  international   sales  of  printed  flock  upholstery
  fabrics.  We also  experienced  some  pressure on margins on other product lines
  that  are  marketed  primarily  to  U.S.-based  manufacturers.  We  did  achieve
  higher sales for the quarter;  but that gain was due to the  contributions  from
  Phillips  Mills and Artee  Industries,  which were  acquired  subsequent  to the
  year-earlier period."
  
        "The first fiscal  quarter is  historically  not the strongest  period for
  our industry  due to vacations  and  seasonal  plant  closings.  The backdrop of
  consumer  spending in the U.S. on home  furnishings  remains  favorable,  and we
  are  encouraged  about  the  positive  response  by  manufacturers  to  our  new
  patterns and  textures  that will be  introduced  to  retailers  this fall.  Our
  immediate  focus  obviously  must be  restoring  Culp's  profitability.  We have
  begun taking  actions to reduce costs,  especially  in those product  categories
  that  typically have been marketed  internationally.  Although we are optimistic
  about the  potential  for longer term gains in our  business  outside the United
  States, we have moved to bring  manufacturing  capacity in line with the current
  level of demand."
  
       Culp added,  "During the first quarter, we significantly  strengthened our
  management  structure.  We unified  related  products  and  marketing  programs,
  thereby  reducing  the number of  business  units  from six to four.  We believe
  that  grouping   related   business   operations  will  promote  better  working
  communications  and  lead to  more  effective  customer  service  and  marketing
  programs.   The  initial   momentum  for  this  realignment  in  our  management
  structure was based on long range  planning,  but we believe the changes  should
  also help the near term recovery in our bottom line."
  
        Culp,   Inc.  is  the  world's  largest   manufacturer   and  marketer  of
  upholstery  fabrics for furniture and is a leading  producer of mattress ticking
  for bedding.  The Company's  fabrics are used  principally  in the production of
  residential and commercial furniture and bedding products.
  
                                     CULP, INC.
                           Condensed Financial Highlights
                                     (Unaudited)
                                                      Three Months Ended      
                                                  August 2,         August 3,
                                                    1998              1997    
                                                 (13 weeks)        (14 weeks)
  Net sales                                    $ 110,667,000     $  99,498,000
  Net income (loss)                            $  (2,640,000)    $   2,850,000
  Net income (loss) per share:
    Basic                                      $       (0.20)    $        0.23
    Diluted                                    $       (0.20)    $        0.22
  Average shares outstanding:
    Basic                                          13,000,000       12,631,000
    Diluted                                        13,203,000       12,929,000
  
  This  release  contains   statements  that  could  be  deemed   "forward-looking
  statements,"   within  the  meaning  of  the  federal   securities   laws.  Such
  statements are inherently  subject to risks and  uncertainties.  Forward-looking
  statements  are statements  that include  projections,  expectations  or beliefs
  about future  events or results or otherwise  are not  statements  of historical
  fact.  Such  statements  are often  characterized  by  qualifying  words such as
  "expect,"  "believe,"  "estimate,"  "plan" and "project" and their  derivatives.
  Factors that could influence the matters  discussed in such  statements  include
  the level of housing starts and sales of existing  homes,  consumer  confidence,
  trends in  disposable  income and  general  economic  conditions.  Decreases  in
  these  economic  indicators  could  have a  negative  effect  on  the  company's
  business and  prospects.  Likewise,  increases in interest  rates,  particularly
  home  mortgage  rates,  and  increases  in consumer  debt or the general rate of
  inflation,  could  affect  the  company  adversely.  Because  of the  increasing
  percentage  of  the  company's   sales  derived  by   international   shipments,
  strengthening  of the  U.S.  dollar  against  other  currencies  could  make the
  company's  products less  competitive  on the basis of price in markets  outside
  the United  States.  Additionally,  economic and  political  instability  in the
  international area could affect the demand for the company's products.
  
                                        -END-
  CULP, INC. FINANCIAL INFORMATION RELEASE
                         CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                 FOR THREE MONTHS ENDED AUGUST 2, 1998 AND AUGUST 3, 1997
  
                     (Amounts in Thousands, Except for Per Share Data)
  THREE MONTHS ENDED (UNAUDITED)
                                    --------------------------------------------------------
  
                                          Amounts                         Percent of Sales
                                    ---------------------                --------------------
                                   August 2,   August 3,   % Over
                                       1998       1997      (Under)        1999       1998
                                    ---------  ---------- ----------     ---------  ---------
  Net sales                      $   110,667      99,498     11.2 %        100.0 %    100.0 %
  Cost of sales                       97,056      82,765     17.3 %         87.7 %     83.2 %
                                    ---------  ---------- ----------     ---------  ---------
      Gross profit                    13,611      16,733    (18.7) %        12.3 %     16.8 %
  
  Selling, general and
    administrative expenses           14,473      10,916     32.6  %        13.1 %     11.0 %
                                    ---------  ---------- ----------     ---------  ---------
      Income (loss) from operations     (862)      5,817   (114.8) %        (0.8) %     5.8 %
        
  
  Interest expense                     2,361       1,280     84.5  %         2.1 %      1.3 %
  Interest income                        (53)        (90)   (41.1) %        (0.0)%     (0.1)%
  Other expense (income), net            770         242    218.2  %         0.7 %      0.2 %
                                    ---------  ---------- ----------     ---------  ---------
        Income (loss) before        
           income taxes               (3,940)      4,385   (189.9) %        (3.6)%      4.4 % 
  
  Income taxes  *                     (1,300)      1,535   (184.7) %        33.0 %     35.0 %
                                    ---------  ---------- ----------     ---------  ---------
        Net income (loss)       $     (2,640)      2,850   (192.6) %        (2.4)%      2.9 %
                                    =========  ========== ==========     =========  =========
  
  Net income (loss) per share         ($0.20)      $0.23   (187.0) %
  Net income (loss) per share,            
    assuming dilution                 ($0.20)      $0.22   (190.9) %
  Dividends per share                $0.0350     $0.0350      0.0  %
  Average shares outstanding          13,000      12,631      2.9  %
  Average shares outstanding,       
    assuming dilution                 13,203      12,929      2.1  %
  * Percent of sales column is  calculated  as a % of income  (loss) before income
  taxes.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                  CONSOLIDATED BALANCE SHEETS
                        AUGUST 2, 1998, AUGUST 3, 1997 AND MAY 3, 1998
                                           Unaudited
                                    (Amounts in Thousands)
  Amounts                 Increase
                                    ---------------------------
                                     August 2,     August 3,        (Decrease)          *
                                                               ----------------------  May 3,
                                        1998         1997       Dollars     Percent     1998
                                    -------------  ----------  ----------   ---------  -------
  Current assets
  Cash and cash investments  $        1,520       1,843         (323)   (17.5) %    2,312
       Accounts receivable                63,833      54,086        9,747     18.0  %   73,773
       Inventories                        79,358      60,715       18,643     30.7  %   78,594
       Other current assets                7,511       6,126        1,385     22.6  %    7,808
                                    -------------  ----------  ----------   ---------  -------
           Total current assets          152,222     122,770       29,452     24.0  %  162,487
               
                                                                
  Restricted investments                   4,074       8,186      (4,112)    (50.2) %    4,021
  Property, plant & equipment, net       127,287      97,128      30,159      31.1  %  128,805
  Goodwill                                54,798      22,111      32,687     147.8  %   55,162
  Other assets                             4,317       3,124       1,193      38.2  %    4,340
                                    -------------  ----------  ----------   ---------  -------
                                                                             
           Total assets           $      342,698     253,319      89,379      35.3  %  354,815
                                    =============  ==========  ==========   =========  =======
  
                                                                             
                                                                             
  Current liabilities
       Current maturities of      
            long-term debt        $        3,250         100       3,150    3,150.0 %    3,325
       Accounts payable                   31,710      20,154      11,556       57.3 %   37,214
       Accrued expenses                   13,856      11,972       1,884       15.7 %   17,936
       Income taxes payable                    0       1,575      (1,575)    (100.0)%    1,282
                                    -------------  ----------  ----------   ---------  -------
           Total current liabilities      48,816      33,801      15,015      44.4  %   59,757
               
                                                                             
  Long-term debt                         154,383      96,016      58,367      60.8  %  152,312
  
                                                                             
  Deferred income taxes                   11,227       9,965       1,262      12.7  %   11,227
                                    -------------  ----------  ----------   ---------  -------
           Total liabilities             214,426     139,782      74,644      53.4  %  223,296
                                                                                          
  Shareholders' equity                   128,272     113,537      14,735      13.0  %  131,519
                                    -------------  ----------  ----------   ---------  -------
                                                                          
           Total liabilities and                                                       
              shareholders' equity $     342,698     253,319      89,379      35.3  %  354,815
                                    =============  ==========  ==========   =========  =======
                                                                             
  Shares outstanding                      12,995      12,650         345       2.7  %   13,007
                                    =============  ==========  ==========   =========  =======
  * Derived from audited financial statements.
  CULP, INC.
                            FINANCIAL INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE THREE MONTHS ENDED AUGUST 2, 1998 AND AUGUST 3, 1997
                                      Unaudited
                               (Amounts in Thousands)
  THREE MONTHS ENDED
                                                          ------------------------
  
                                                                     Amounts
                                                           ----------------------
                                                            August 2,   August 3,
                                                               1998       1997
                                                           ----------- ----------
  
  Cash flows from operating activities:
  Net income (loss)                                   $     (2,640)     2,850
      Adjustments to reconcile net income (loss) to net
        cash provided by (used in) operating activities:
           Depreciation                                          4,376      3,256
           Amortization of intangible assets                       398        181
           Changes in assets and liabilities:
             Accounts receivable                                 9,940      2,605
             Inventories                                          (764)    (7,252)
             Other current assets                                  297       (676)
             Other assets                                          (11)      (147)
             Accounts payable                                   (3,017)    (5,852)
             Accrued expenses                                   (4,080)    (2,923)
             Income taxes payable                               (1,282)        (5)
                                                              --------- ----------
          Net cash provided by (used in) operating activities    3,217     (7,963)
                                                              --------- ----------
  Cash flows from investing activities:                                    
      Capital expenditures                                      (2,858)    (9,153)
      Purchases of restricted investments                          (53)    (8,590)
      Sale of restricted investments                                 0     11,422
                                                            ----------- ----------
          Net cash used in investing activities                 (2,911)    (6,321)
                                                            ----------- ----------
  Cash flows from financing activities:                                    
      Proceeds from issuance of long-term debt                   2,071     19,500
      Principal payments on long-term debt                         (75)       (25)
      Change in accounts payable-capital expenditures           (2,487)    (3,897)
      Dividends paid                                              (455)      (443)
      Common stock issued (purchased)                             (152)       162
                                                            ----------- ----------
          Net cash provided by (used in)financing activities    (1,098)    15,297
                                                            ----------- ----------
                                                                           
  Increase (decrease) in cash and cash investments                (792)     1,013
                                                                           
  Cash and cash investments at beginning of period               2,312        830
                                                            ----------- ----------
                                                                           
  Cash and cash investments at end of period               $     1,520      1,843
                                                            =========== ==========
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                     FINANCIAL ANALYSIS
                                       AUGUST 2, 1998
  FISCAL 98                FISCAL 99
                                          --------  ---------------------------------------   ---------
                                            Q1         Q1        Q2        Q3        Q4         LTM
                                          --------  ---------------------------------------   ---------
  INVENTORIES
        Inventory turns                      5.8         4.9
  
  RECEIVABLES
        Days sales in receivables            50          48
        Percent current & less than
           30 days past due                 95.0%       93.8%
        
  WORKING CAPITAL
        Current ratio                        3.6         3.1
        Working capital turnover (4)         5.1         4.5
        Operating working capital (4)    $94,647    $111,481
        
  PROPERTY, PLANT & EQUIPMENT
        Depreciation   rate                 7.1%        7.7%
        Percent property, plant &
           equipment are depreciated       46.8%       43.8%
        Capital  expenditures            $35,879 (1)  $2,858
       
  
  PROFITABILITY
        Return on average total capital     7.6%      (1.6%)                                     6.1%
        Return on average equity           10.2%      (8.1%)                                     8.2%
        Net income (loss) per share        $0.23     ($0.20)                                    $0.79
        Net income (loss) per share    
          (diluted)                        $0.22     ($0.20)                                    $0.77
  
  LEVERAGE (3)
        Total liabilities/equity          123.1%      167.2%
        Funded debt/equity                 77.4%      119.7%
        Funded debt/capital employed       43.6%       54.5%
        Funded debt                      $87,930    $153,559
        Funded debt/EBITDA (LTM) (6)        2.18        3.75
        EBITDA/Interest expense,                        
          net (LTM)                          9.1         4.9
  
  OTHER
        Book value per share               $8.98       $9.87
        Employees at quarter end           3,180       4,230
        Sales per employee (annualized) $125,000    $103,000
        Capital employed (3)            $201,467    $281,831
        Effective income tax rate          35.0%       33.0%
        EBITDA (2)                        $9,012      $3,142                                  $38,971
        EBITDA/net sales                    9.1%        2.8%                                     8.0%
  (1) Expenditures for entire year
    (2) Earnings before interest, income taxes, and depreciation & amortization.
    (3) Long-term debt, funded debt and capital employed are all net of restricted
        investments.
    (4) Working capital for this calculation is accounts receivable,inventories 
        and accounts payable.
    (5) LTM represents"Latest Twelve Months"
    (6) EBITDA includes capitalized interest and pro forma amounts for Wetumpka  
        and Artee acquisitions.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                     SALES BY PRODUCT CATEGORY/BUSINESS UNIT
            FOR THREE MONTHS ENDED AUGUST 2, 1998 AND AUGUST 3, 1997
  (Amounts in thousands)
   
                                         THREE MONTHS ENDED (UNAUDITED)
                               ---------------------------------------------------
  
                                    Amounts                     Percent of Total
                                                                    Sales
                               ------------------              -------------------
                              August 2, August 3,   % Over
                                1998      1997      (Under)    1999      1998
  Product Category/Business Unit
  -------------------------    --------  --------  ----------  --------  ---------
  Upholstery Fabrics
      Culp Decorative Fabrics $  51,445    39,814    29.2 %     46.5 %     40.0 %
  
      Culp Velvets/Prints        29,994    38,397   (21.9)%     27.1 %     38.6 %
                               --------  --------  ----------  --------  ---------
                                 81,439    78,211     4.1 %     73.6 %     78.6 %
  
  Mattress Ticking
      Culp Home Fashions         22,632    21,287     6.3 %     20.5 %     21.4 %
  
  Yarn
     Culp Yarn                    6,596         0   100.0 %      6.0 %      0.0 %
                               --------  --------  ----------  --------  ---------
  
                            * $ 110,667    99,498    11.2 %     100.0%    100.0 %
                               ========  ========  ==========  ========  =========
  
  * U.S.  sales were  $84,310 and $74,407 for the three  months of fiscal 1999 and
  fiscal 1998,  respectively.  The percentage increase in U.S. sales was 13.3% for
  the three months.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                       INTERNATIONAL SALES BY GEOGRAPHIC AREA
              FOR THREE MONTHS ENDED AUGUST 2, 1998 AND AUGUST 3, 1997
  (Amounts in thousands)
  
                                         THREE MONTHS ENDED (UNAUDITED)
                           -------------------------------------------------------
  
                                   Amounts                       Percent of Total
                                                                     Sales
                           ---------------------             ---------------------
                             August 2,   August      % Over
                                            3,
     Geographic Area           1998        1997     (Under)     1999       1998
  -----------------------  ----------  ---------  ---------  ---------   ---------
  North America         
   (Excluding USA)       $     7,253      7,044     3.0 %       27.5 %     28.1 %
  Europe                       3,683      4,440   (17.0)%       14.0 %     17.7 %
  Middle East                  8,300      6,564    26.4 %       31.5 %     26.2 %
  Far East & Asia              4,868      5,464   (10.9)%       18.5 %     21.8 %
  South America                1,000        339   195.0 %        3.8 %      1.4 %
  All other areas              1,253      1,240     1.0 %        4.8 %      4.9 %
                           ----------  ---------  ---------  ---------   ---------
  
                         $    26,357     25,091    5.0 %      100.0 %    100.0 %
                           ==========  =========  =========  =========   =========
  International  sales,  and the  percentage of total sales,  for each of the last
  seven fiscal years  follows:  fiscal 1992-$  37,913 (20%);  fiscal 1993-$ 41,471
  (21%);  fiscal 1994-$ 44,038  (18%);  fiscal 1995-$ 57,971 (19%);  fiscal 1996-
  $77,397 (22%);  fiscal 1997-$  101,571  (25%);  and fiscal 1998-$ 137,223 (29%).
  International sales for the current quarter represented 23.8% and 25.2% for 1999
  and 1998, respectively.
  
  Certain amounts for fiscal year 1998 have been  reclassified to conform with the
  fiscal year 1999 presentation.
  Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1997 vs 1998 vs 1999
                                      Unaudited
                               (Amounts in thousands)
  Fiscal 1997                                     Fiscal 1998                    
                             ----------------------------------------------  ----------------------------------------------  
  Product Category/Business Units  Q1       Q2        Q3       Q4     TOTAL        Q1       Q2       Q3       Q4      TOTAL  
   ---------------------------
  Upholstery Fabrics
      Culp Decorative Fabrics    38,966    45,723   39,342   43,699  167,730      39,814  56,781   53,415   60,155   210,165 
      Culp Velvets/Prints        34,867    40,233   40,387   40,980  156,467      38,397  43,928   44,020   45,044   171,389 
                               ----------------------------------------------  ----------------------------------------------
                                 73,833    85,956   79,729   84,679  324,197      78,211 100,709   97,435  105,199   381,554 
  
  Mattress Ticking
      Culp Home Fashions         16,696    19,248   17,739   20,999   74,682      21,287  22,217   20,261   23,520    87,285 
  
  Yarn
      Culp Yarn                                                                                                              
                                      -         -        -        -        -           -       -      761    7,115     7,876 
                               ----------------------------------------------  ----------------------------------------------
  
                                 90,529   105,204   97,468  105,678  398,879      99,498 122,926  118,457  135,834   476,715 
                               ==============================================  ==============================================
  
                                     Culp, Inc.
                       SALES BY BUSINESS UNIT - TREND ANALYSIS
                                1997 vs 1998 vs 1999
                                      Unaudited
                               (Amounts in thousands)
  
                                                 Fiscal 1999
                             -----------------------------------------------
  Product Category/Business Units    Q1        Q2       Q3        Q4    TOTAL
   ---------------------------
  
  Upholstery Fabrics
      Culp Decorative Fabrics    51,445
      Culp Velvets/Prints        29,994
                            -----------------------------------------------
                                 81,439
  
  Mattress Ticking
      Culp Home Fashions         22,632
  
  Yarn
      Culp Yarn                    
                                  6,596
                            -----------------------------------------------
                                110,667
                            ===============================================
  Percent increase(decrease) from prior year:
   ----------------------------------------------------------------------------------------------------------------------------
                                               Fiscal 1997                                     Fiscal 1998                    
                               ----------------------------------------------  ---------------------------------------------- 
  Product Category/Business Units   Q1       Q2        Q3       Q4     TOTAL        Q1       Q2       Q3       Q4      TOTAL  
   ---------------------------
  Upholstery Fabrics
      Culp Decorative Fabrics      18.3      12.4      0.2     (4.4)     5.8         2.2    24.2     35.8     37.7      25.3  
      Culp Velvets/Prints          48.2      25.4     26.9      7.1     24.5        10.1     9.2      9.0      9.9       9.5  
                               ----------------------------------------------  ---------------------------------------------- 
                                   30.8      18.1     12.2      0.8     14.0         5.9    17.2     22.2     24.2      17.7  
  
  Mattress Ticking
      Culp Home Fashions            5.1       7.4     15.3     15.5     10.8        27.5    15.4     14.2     12.0      16.9  
  
  Yarn
      Culp Yarn                                                                                                               
                                      -         -        -        -        -           -       -    100.0    100.0     100.0  
                               ----------------------------------------------  ---------------------------------------------- 
  
                                   25.1      16.0     12.7      3.4     13.4         9.9    16.8     21.5     28.5      19.5  
                               ==============================================  ============================================== 
  
    Overall Growth Rate
  
  Internal(without acquisitions)   25.1      16.0     12.7      3.4     13.4         9.9     6.6      9.2     11.6       9.3  
  
  External                            -         -        -        -        -           -    10.2     12.3     16.9      10.2  
                              ----------------------------------------------  ----------------------------------------------  
                                   25.1      16.0     12.7      3.4     13.4         9.9    16.8     21.5     28.5      19.5  
                              ==============================================  ==============================================  
  
                     Percent increase(decrease) from prior year:
  ----------------------------------------------------------------------------
                                                   Fiscal 1999
                               -----------------------------------------------
  Product Category/Business Units    Q1        Q2        Q3       Q4    TOTAL
   ---------------------------
  Upholstery Fabrics
      Culp Decorative Fabrics      29.2
      Culp Velvets/Prints         (21.9)
                                ----------------------------------------------
                                    4.1
  
  Mattress Ticking
      Culp Home Fashions            6.3
  
  Yarn
      Culp Yarn                
                                  100.0
                               ----------------------------------------------
  
                                   11.2
                               ==============================================
  
    Overall Growth Rate
  
  Internal(without acquisitions)  (4.6)
  
  External                         15.8
                              ===============================================
                                   11.2
                              ===============================================
  CULP, INC. FINANCIAL INFORMATION RELEASE
                               FINANCIAL NARRATIVE
       for the three month periods ended August 2, 1998 and August 3, 1997
  
  INCOME STATEMENT COMMENTS
  
        GENERAL  -  Net  sales  increased  11.2%  to  $110.7  million,  and  the
  company  reported a net loss of $2.6 million  compared with net income of $2.9
  million  for the first  quarter of last year.  The first  quarter  included 13
  weeks versus 14 weeks in the year-earlier period.
  
        The  company  has  compiled  a longer  term  record of  growth  based on
  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   53%  of  net  sales   during   the   first   quarter;
     additionally,  no one customer  accounted  for more than 7% of sales during
     the first quarter of fiscal 1999;
  
  Design  Innovation - investing  in the design of new  patterns  and  textures.
     The company has  significantly  increased  resources  (both  designers  and
     computer-aided  design (CAD) systems) in the design and product development
     areas in each  business  unit.  In January  1998,  the  company  opened its
     state-of-the-art design center in Burlington,  North Carolina. The facility
     has  consolidated  most of the company's  design  resources in one facility
     which offers advanced CAD systems for the design process;
  
  Vertical  Integration  - realizing  additional  manufacturing  integration  by
     producing various raw material  components that are used in the manufacture
     of its products; and
  
  Ability to Integrate  Acquisitions - investing in selective  acquisitions that
     strengthen existing marketing positions.
  
        NET SALES - Compared  with the first  quarter  of last year,  upholstery
  fabric  sales  increased  4.1%  to  $81.4  million;   mattress  ticking  sales
  increased 6.3% to $22.6 million;  and yarn sales  contributed $6.6 million for
  the  quarter  (See  Sales by  Business  Unit  schedule  on Page 5 and Sales by
  Business  Unit - Trend  Analysis on Page 7). The growth in  upholstery  fabric
  sales for the first quarter was due to the  contribution  of $9.1 million from
  Phillips  Mills which was acquired  after the close of the quarter a year ago.
  Excluding  that  incremental  volume,  upholstery  fabric sales were down 7.5%
  from a year  ago.  International  sales  were  up  5.0%  for  the  quarter.  A
  significant  decline  in sales to Europe  and the Far  East/Asia  (principally
  Russia) was offset by higher shipments to the Middle East.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                               FINANCIAL NARRATIVE
       for the three month periods ended August 2, 1998 and August 3, 1997
  
        The  decline in sales of  upholstery  fabrics was due  principally  to a
  pronounced  slowdown in international  sales of wet and heat-transfer  printed
  flock  fabrics.  This trend,  which the company  believes has  affected  other
  manufacturers  of  upholstery  fabrics,  became  apparent  after  the close of
  fiscal  1998  and  has  been  persistent  thus  far in  fiscal  1999.  A large
  percentage  of the  company's  sales of this product  line were being  shipped
  directly or  indirectly  to customers  in the  emerging  markets of Russia and
  other former Soviet  countries,  India and Eastern Europe.  All of these areas
  are generally  experiencing very weak economic conditions which, in turn, have
  affected  demand for  furniture  and other home  furnishings.  The company has
  significantly  curtailed  production  schedules  for  these  fabrics  and  has
  shifted its  marketing  focus for this product  category to  geographic  areas
  where  demand   remains   favorable.   The  company  is  seeking  to  build  a
  diversified  geographic  base of  customers  internationally  to minimize  the
  exposure to economic uncertainties in any single geographic area.
  
        Lower  international  sales also affected the  company's  sales of other
  upholstery  fabrics during the first  quarter.  The  year-to-year  comparisons
  were also  influenced  by the fact that  there was one less week in the period
  (13)  versus  a  year  ago  (14).  Because  of  industry  wide  vacations  and
  scheduled  plant  shutdowns,  the first  quarter  is  historically  the lowest
  period of the year for net sales.
   
        The  increased  sales by Culp Home  Fashions  during  the first  quarter
  marks a continuation  of the expansion that this business unit has experienced
  in recent years.  Sales are benefiting  from the  introduction  of new designs
  and  fabric  constructions  as well  as the  company's  vertical  integration.
  Culp's ability to manufacture the jacquard greige,  or unfinished,  goods that
  are then printed to produce  mattress ticking has aided the company in meeting
  faster delivery schedules and providing improved overall customer service.
  
        GROSS  PROFIT - Gross  profit  declined  18.7% for the quarter  versus a
  year  ago.  The  decline  was due  principally  to lower  margins  at the Culp
  Decorative  Fabrics and Culp  Velvets/Prints  units.  Culp Decorative  Fabrics
  experienced  considerable  unfavorable   manufacturing  variances  during  the
  quarter.   Factors   contributing  to  these  variances  included  lower  than
  expected  sales  and  competitive  pressure  on  pricing,  especially  in  the
  jacquard product category.  The lower gross profit at Culp  Velvets/Prints was
  due to the unexpectedly sharp decline in international  sales of printed flock
  fabrics.  The  lower  sales  led to excess  manufacturing  capacity  and lower
  absorption of fixed costs.
  
        The gross  margins  are  expected  to  remain  under  pressure,  but the
  company  has  instituted  a number of  actions  to  improve  profitability.  A
  reorganization  from six to four  business  units during the first quarter has
  grouped  related  operations  together  and has been  accompanied  by  several
  changes in managerial  positions.  Steps underway  related to this realignment
  include a  significant  reduction in the capacity  for  manufacturing  printed
  flock fabrics,  comprehensive  programs to reduce  inventories  and an intense
  effort to reduce operating expenses and raise productivity.
  
        S,G&A  EXPENSES  -  S,G&A  expenses  for  the  first  quarter  rose as a
  percentage  of sales to 13.1%  from 11.0 % for the same  period of last  year.
  The higher  proportion  of SG&A  expenses was also  affected by the lower than
  expected  sales.  The  increase in absolute  dollars  from a year ago resulted
  from the  Phillips  Mills and Artee  acquisitions,  investment  in  additional
  design  resources,  increased  costs in sampling  new product and higher costs
  for marketing programs.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                               FINANCIAL NARRATIVE
       for the three month periods ended August 2, 1998 and August 3, 1997
  
        INTEREST  EXPENSE - Interest  expense  increased  85% compared  with the
  year-earlier  period  due  to  higher  average  borrowings  outstanding.   The
  increased  borrowings  related  principally to the acquisitions  during fiscal
  1998 of Phillips Mills and Artee  Industries and the relatively  high level of
  capital expenditures in fiscal 1998.
  
        OTHER  EXPENSE  (INCOME),  NET - Other  expense  (income)  increased  to
  $770,000  from  $242,000  in  the   year-earlier   quarter.   A  major  factor
  contributing  to  the  increase  was  amortization  of  goodwill  due  to  the
  acquisitions  during  fiscal 1998.  Additionally,  a  non-recurring  charge of
  $311,000 was incurred to writeoff certain fixed assets.
  
        INCOME  TAXES - The  effective  tax  rate  for  the  quarter  was  33.0%
  compared with 35.0% for the prior year.
  
        EBITDA - EBITDA for the  quarter  decreased  to $3.1  million  from $9.0
  million  for last  year's  first  quarter  and  represented  2.8% of net sales
  compared with 9.1% of net sales for the same period of last year.
  
  BALANCE SHEET COMMENTS
  
        WORKING  CAPITAL - Accounts  receivable  increased 18.0 % from August 3,
  1997,  while  sales  increased  11.2  % for  the  first  quarter.  Days  sales
  outstanding  represented 48 days,  down from 50 days at August 3, 1997, and 49
  days at May 3,  1998.  Accounts  receivable  increased  at a faster  rate than
  sales  because  of the  increasing  mix of  international  sales and  mattress
  ticking sales,  which carry longer payment terms than U.S.  upholstery  fabric
  sales.  Additionally,  the aging of accounts receivable was 93.8 % current and
  less  than 30 days  past due  versus  95.0% at  August  3,  1997.  Inventories
  increased 30.7 % from August 3, 1997, and inventory  turns were 4.9 versus 5.8
  for last year's first  quarter.  The  inventory  increase is partly due to the
  prior year acquisitions and a build up of yarn in the Culp Decorative  Fabrics
  business unit.  Operating working capital  (comprised of accounts  receivable,
  inventory  and  accounts  payable)  increased  to $111.5  million at August 2,
  1998, for the reasons  mentioned above,  from $94.6 million at August 3, 1997.
  The balance at May 3, 1998 was $115.2 million.
  
        PROPERTY,  PLANT  AND  EQUIPMENT  - For  fiscal  1999,  the  company  is
  planning to significantly  reduce its capital spending to $10-$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 54.5% at August 2,  1998,  up from  43.6% at August 3,  1997,  and up from
  53.5% at May 3, 1998.  Funded  debt was $153.6  million at August 2, 1998,  up
  from  $87.9  million  at August 3, 1997 and up from  $151.6  million at May 3,
  1998. (Funded debt equals long-term debt,  including current maturities,  less
  restricted  investments,  which represent unspent IRB funds).  The increase in
  funded debt from May 3, 1998 resulted  primarily from capital  expenditures of
  $2.9  million  and  a  decrease  in  accounts   payable   related  to  capital
  expenditures  of $2.5 million,  which were partially  offset by operating cash
  flow of $3.2 million.