content: --------------------------------------------------------------------------------
  
  
                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549
  
                                     ---------
  
                                     Form 8-K
  
                                  CURRENT REPORT
  
                 Pursuant to Section 13 or 15(d) of the Securities
                               Exchange Act of 1934
  
                                   -------------
  
           Date of Report (Date of earliest event reported) June 3, 2002
  
                                     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 (x pages) and  Financial  Information  Release (13
  pages),  both dated June 3, 2002,  related to the fiscal 2002 fourth quarter and
  year ended April 28, 2002.
  
  Forward  Looking  Information.  This  Report  contains  statements  that  may be
  deemed   "forward-looking   statements"   within  the  meaning  of  the  federal
  securities  laws,  including  the Private  Securities  Litigation  Reform Act of
  1995.  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  significant  percentage  of the  company's  sales  derived  from
  international  shipments,  strengthening  of  the U.  S.  dollar  against  other
  currencies  could make the company's  products less  competitive on the basis of
  price  in  markets  outside  the  United  States.  Additionally,   economic  and
  political  instability  in  international  areas could affect the demand for the
  company's products.
  
  
  
                                     SIGNATURE
  
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
  
                                      CULP, INC.
                                      (Registrant)
  
  
                                By:    Franklin  N. Saxon
                                       -------------------
                                       Executive Vice President and
                                       Chief Financial Officer
  
  
  
  <PAGE>
  
  FOR IMMEDIATE RELEASE
  
  
               CULP REPORTS FOURTH QUARTER EARNINGS OF $0.36 PER SHARE
                      BEFORE RESTRUCTURING AND RELATED CHARGES
                               ----------------------
            EXPECTS YEAR-TO-YEAR IMPROVEMENT TO CONTINUE IN FISCAL 2003
  
  HIGH  POINT,  N. C.  (June 3, 2002) -- Culp,  Inc.  (NYSE:  CFI) today  reported
  financial  results for its fourth fiscal  quarter and year ended April 28, 2002,
  including net income  before  restructuring  and related  changes for the fourth
  quarter that was up sharply from the year earlier period.
  
        For the three  months  ended April 28,  2002,  Culp  reported net sales of
  $108.4  million,  up 7.2%  compared  with $101.1  million a year ago.  Excluding
  restructuring  and  related  charges in each  period,  net income for the fourth
  quarter  of fiscal  2002  totaled  $4.2  million,  or $0.36  per share  diluted,
  versus $1.4 million,  or $0.13 per share diluted,  in the  year-earlier  period.
  Including  restructuring  and related  charges in each period,  Culp  reported a
  net loss for the fourth  quarter of fiscal  2002 of $1.6  million,  or $0.14 per
  share  diluted,  compared  with a net loss of $1.4  million,  or $0.13 per share
  diluted, in the year-earlier quarter.
  
        Net  sales  for  fiscal  2002  totaled  $381.9   million,   compared  with
  $409.8 million in the year-earlier period.  Excluding  restructuring and related
  charges  in  each  year,  Culp  reported  net  income  for  fiscal  2002 of $4.0
  million,  or $0.35 per share diluted,  compared with a net loss of $3.3 million,
  or  $0.30  per   share   diluted,   in  the   year-earlier   period.   Including
  restructuring  and  related  charges,  the  Company  reported a net loss of $3.4
  million,  or $0.31 per share  diluted,  for  fiscal  2002 and a net loss of $8.3
  million, or $0.74 per share diluted, for the year-earlier period.
  
        Culp  indicated  that bad debt  expense  for the fourth  quarter of fiscal
  2002 totaled $1.2 million  ($0.07 per share after taxes) versus  $121,000 in the
  year-earlier  period.  Bad debt  expense for fiscal 2002  totaled  $4.2  million
  ($0.25 per share after taxes) compared with $309,000 in fiscal 2001.
  
        The  restructuring  and  related  charges  during  the  fourth  quarter of
  fiscal 2002  relate to the  previously  announced  plan to exit and sell the wet
  printed  flock  business  and  related  assets.  The action  involves  closing a
  printing facility and flocking operations and reducing related selling and
  
  administrative  expenses.  The total charge from exiting this  business was $9.7
  million,  approximately  $8.2 million of which represented  non-cash items. Culp
  estimates the annual  after-tax  carrying costs to maintain the facilities until
  the  assets  are sold  will be  approximately  $200,000,  or $0.02  per  diluted
  share.  During  fiscal  2002,  sales of wet printed  flock  fabrics  contributed
  $17.1  million,  or 4.5% of total  sales,  and the  Company  estimates  that the
  business  resulted  in an  after-tax  net loss of $1.3  million,  or  $0.12  per
  diluted share.
  
        "Our earnings for the fourth quarter  extended the positive  momentum that
  we  established  in the third  quarter,"  remarked  Robert G. Culp,  III,  chief
  executive  officer.  "We benefited  from an  especially  strong  performance  in
  April.  One of the changes that makes  short-term  forecasts  more difficult for
  us is how much lead times in our  industry  have become  shortened.  Our ability
  to provide  manufacturers  with one of the broadest choices of fabrics available
  and to offer  flexible,  prompt  shipping  schedules are two of the  fundamental
  competitive  strengths  playing  to Culp's  advantage.  We  believe  our gain in
  sales  for the  quarter  can be  attributed  in  large  part to our  success  in
  gaining  market  share.  Although the overall 7.2%  increase from a year ago was
  modest,  our increased sales to U.S.-based  manufacturers was somewhat offset by
  a   continuing   decline   in   international   sales.   Sales   to   U.S.-based
  manufacturers  for the quarter rose 10.0% for  upholstery  fabrics and 14.6% for
  mattress  ticking,  gains that we believe  send a strong  signal  affirming  the
  success of our design  programs  and  overall  competitive  position.  Providing
  value to  furniture  and  bedding  manufacturers  demands  not only  competitive
  pricing but also textures and patterns that consumers find appealing.
  
        "We are  starting to realize  more of the  benefit of the various  actions
  we have  taken to  rationalize  our  capacity,  streamline  our  operations  and
  solidify Culp's  leadership in the continued  long-term growth projected for the
  home  furnishings  industry.  The gross profit  margin  percentage  of 21.2% for
  the fourth  quarter in fact marked a new quarterly  record for Culp,  reflecting
  the benefits of our  restructuring  actions,  a more  profitable mix of sales in
  each division and increased  operating  efficiency due to the higher sales.  The
  53%  increase in gross profit in the fourth  quarter,  on a much smaller gain in
  sales,  highlights  the positive  leverage  inherent in our business.  We expect
  results in fiscal  2003 to reflect  more of the savings  from our  restructuring
  moves,  including  the  decision  in the fourth  quarter to exit the wet printed
  flock business."
  
        Culp added,  "Our  objective  for fiscal  2003 is to achieve  year-to-year
  improvement   in  net  income  each   quarter,   excluding  the  impact  of  the
  restructuring  and related  charges  incurred  during  fiscal  2002.  We believe
  that the  fundamentals  of our business  model  provide the potential for Culp's
  profit margin  percentages to return to their historical  highs.  Although we do
  not  expect  to  achieve  those  levels  for  fiscal  2003  as a  whole,  we are
  optimistic  that the trend  during  the year will be  positive,  establishing  a
  strong  platform  for  future  improvement.  We also  expect to  strengthen  our
  balance sheet
  
  further  in the  coming  year.  Our cash  position  at the close of fiscal  2002
  improved to $32.0 million, up
  from $1.2 million at the close of fiscal  2001.  Cash flow from  operations  for
  fiscal 2002 totaled a record $42.2  million,  exceeding  the previous  record in
  fiscal  2001 of $36.1  million.  The new high in cash flow  enabled us to reduce
  debt by $7.2  million and fund  capital  expenditures  of $4.7  million.  We are
  continuing  to manage our  working  capital  closely  and are  pleased  with the
  rebound  in EBITDA to $33.0  million,  up from  $26.4  million  in fiscal  2001,
  excluding restructuring and related charges."
  
  Cumulative Effect of Accounting Change
  
        Culp will adopt SFAS No.  142,  "Goodwill  and Other  Intangible  Assets,"
  effective  as of the  beginning  of  Culp's  2003  fiscal  year.  SFAS  No.  142
  represents a substantial  change in accounting  for goodwill.  Starting in 2003,
  goodwill  will  no  longer  be  amortized  but  instead  will be  evaluated  for
  impairment  annually,  beginning  with the  initial  date of  adopting  SFAS No.
  142.  Culp has  completed a  preliminary  review of its  goodwill and expects to
  record in the first  quarter of fiscal 2003 a non-cash  charge of  approximately
  $23 million to $27 million  after taxes.  The charge,  which will be recorded as
  a  "cumulative  effect of change in accounting  principle,"  will have no effect
  on  operating  income or cash  flow  from  operations  and will not  affect  the
  Company's  compliance with the terms of its lending agreements.  The elimination
  of goodwill  amortization  is expected to result in an annual expense  reduction
  of  approximately  $1.4  million,  or $0.07  per  share,  starting  in the first
  quarter of fiscal 2003.
  
        Culp, Inc. is one of the world's largest  marketers of upholstery  fabrics
  for furniture  and is a leading  marketer of mattress  ticking for bedding.  The
  Company's  fabrics are used  principally in the  production of  residential  and
  commercial furniture and bedding products.
  
        This  release  contains  statements  that may be  deemed  "forward-looking
  statements"  within the meaning of the federal  securities  laws,  including the
  Private   Securities   Litigation  Reform  Act  of  1995.  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  significant
  percentage  of  the  Company's  sales  derived  from  international   shipments,
  strengthening  of the  U.S.  dollar  against  other  currencies  could  make the
  Company's  products less  competitive  on the basis of price in markets  outside
  the  United  States.   Additionally,   economic  and  political  instability  in
  international areas could affect the demand for the Company's products.
  
                                     CULP, INC.
                           Condensed Financial Highlights
  
  
                                                        Three Months Ended
                                                 -------------------------------
                                                   April 28,          April 29,
                                                      2002              2001
                                                 ---------------   --------------
  Net sales                                      $  108,397,000    $ 101,071,000
  Net loss                                       $   (1,585,000)   $  (1,427,000)
  Net loss per share:
    Basic                                        $       (0.14)    $       (0.13)
    Diluted                                      $       (0.14)    $       (0.13)
  Net income per diluted share, excluding
     restructuring and related charges*          $        0.36     $        0.13
  Average shares outstanding:
    Basic                                            11,255,000       11,212,000
    Diluted                                          11,564,000       11,276,000
  
  
                                                         Fiscal Year Ended
                                                 --------------------------------
                                                     April 28,         April 29,
                                                       2002              2001
                                                 ---------------   --------------
  Net sales                                      $  381,878,000    $ 409,810,000
  Net loss                                       $   (3,440,000)   $  (8,311,000)
  Net loss per share:
     Basic                                       $        (0.31)   $       (0.74)
     Diluted                                     $        (0.31)   $       (0.74)
  Net income (loss) per diluted share, excluding
     restructuring and related charges*          $         0.35    $       (0.30)
  Average shares outstanding:
     Basic                                           11,230,000       11,210,000
     Diluted                                         11,457,000       11,210,000
  
  * Excludes  restructuring  and related  charges of $9.7 million ($5.8 million or
    $0.51 per share  diluted,  after  taxes) and $12.2  million  ($7.4  million or
    $0.66 per share  diluted,  after taxes) for the fiscal 2002 fourth quarter and
    full year results,  respectively.  Excludes  restructuring and related charges
    of $4.2 million  ($2.8  million or $0.26 per share  diluted,  after taxes) and
    $7.4 million  ($5.0 million or $0.44 per share  diluted,  after taxes) for the
    fiscal 2001 fourth quarter and full year results, respectively.
  
  
                                        - END -
  
  
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                      CONSOLIDATED STATEMENTS OF INCOME (LOSS)
   FOR THE THREE MONTHS AND TWELVE MONTHS ENDED APRIL 28, 2002 AND APRIL 29, 2001
                  (Amounts in Thousands, Except for Per Share Data)
  
  <TABLE>
  <CAPTION>
                                                            THREE MONTHS ENDED (UNAUDITED)
                                         ----------------------------------------------------------------------
                                                  Amounts                                   Percent of Sales
                                         --------------------------                     -------------------------
                                          April 28,     April 29,      % Over
                                            2002          2001         (Under)            2002         2001
                                         ------------  ------------  ------------       -----------  ------------
  <S>                                 <C>                <C>            <C>             <C>           <C>
  Net sales                           $      108,397       101,071         7.2 %           100.0 %       100.0 %
  Cost of sales                               85,379        85,978        (0.7)%            78.8 %        85.1 %
                                         ------------  ------------  ------------       -----------  ------------
          Gross profit                        23,018        15,093        52.5 %            21.2 %        14.9 %
  
  Selling, general and
    administrative expenses   (1)             14,236        10,617        34.1 %            13.1 %        10.5 %
  Restructuring expense                        9,065         3,121       190.5 %             8.4 %         3.1 %
                                         ------------  ------------  ------------       -----------  ------------
          Income (loss) from  operations        (283)        1,355      (120.9)%            (0.3)%         1.3 %
  
  Interest expense                             2,056         2,284       (10.0)%             1.9 %         2.3 %
  Interest income                                (77)           (6)    1,183.3 %            (0.1)%        (0.0)%
  Other expense (income), net                  1,067         1,209       (11.7)%             1.0 %         1.2 %
                                         ------------  ------------  ------------       -----------  ------------
          Loss before income taxes            (3,329)       (2,132)      (56.1)%            (3.1)%        (2.1)%
  
  Income taxes  (2)                           (1,744)         (705)     (147.4)%            52.4 %        33.1 %
                                         ------------  ------------  ------------       -----------  ------------
  
          Net loss                    $       (1,585)       (1,427)      (11.1)%            (1.5)%        (1.4)%
                                         ============  ============  ============       ===========  ============
  
  Net loss per share                          ($0.14)       ($0.13)       (7.7)%
  Net loss per share, assuming dilution       ($0.14)       ($0.13)       (7.7)%
  Net income per share, excluding
     restructuring and related charges,
     assuming dilution (3)                     $0.36         $0.13       176.9 %
  Average shares outstanding                  11,255        11,212         0.4 %
  Average shares outstanding, assuming
     dilution                                 11,255        11,212         0.4 %
  
  </TABLE>
  <PAGE>
  
  <TABLE>
  <CAPTION>
  
                                                                  TWELVE MONTHS ENDED
                                         ----------------------------------------------------------------------
                                                  Amounts                                   Percent of Sales
                                         --------------------------                     -------------------------
                                          April 28,     April 29,      % Over
                                            2002          2001         (Under)              2002         2001
                                         ------------  ------------  ------------       -----------  ------------
  <S>                                 <C>                <C>            <C>              <C>           <C>
  Net sales                           $      381,878       409,810        (6.8)%           100.0 %       100.0 %
  Cost of sales                              319,021       353,823        (9.8)%            83.5 %        86.3 %
                                         ------------  ------------  ------------       -----------  ------------
                                              62,857        55,987        12.3 %            16.5 %        13.7 %
  
  Selling, general and
    administrative expenses (1)               48,059        50,366        (4.6)%            12.6 %        12.3 %
  Restructuring expense                       10,368         5,625        84.3 %             2.7 %         1.4 %
                                         ------------  ------------  ------------       -----------  ------------
          Income (loss) from operations        4,430            (4)           *              1.2 %        (0.0)%
  
  Interest expense                             7,907         9,114       (13.2)%             2.1 %         2.2 %
  Interest income                               (176)          (46)      282.6 %            (0.0)%        (0.0)%
  Other expense (income), net                  2,839         3,336       (14.9)%             0.7 %         0.8 %
                                         ------------  ------------  ------------       -----------  ------------
          Loss before income taxes            (6,140)      (12,408)       50.5 %            (1.6)%        (3.0)%
  
  Income taxes  (2)                           (2,700)       (4,097)       34.1 %            44.0 %        33.0 %
                                         ------------  ------------  ------------       -----------  ------------
  
          Net loss                    $       (3,440)       (8,311)       58.6 %            (0.9)%        (2.0)%
                                         ============  ============  ============       ===========  ============
  </TABLE>
  
  Net loss per share                          ($0.31)       ($0.74)       58.1 %
  Net loss per share, assuming dilution       ($0.31)       ($0.74)       58.1 %
  Net income (loss) per share, excluding
     restructuring and related charges,
     assuming dilution (3)                     $0.35        ($0.30)      216.7 %
  Average shares outstanding                  11,230        11,210         0.2 %
  Average shares outstanding, assuming
     dilution                                 11,230        11,210         0.2 %
  
  *   Calculated % not meaningful
  
  (1)  Includes  bad debt  expense of $1.2  million  ($792,000  or $0.07 per share
  diluted,  after taxes) and  $121,000  for the fourth  quarter of fiscal 2002 and
  2001, respectively; and $4,172,000 ($2,753,000 or $0.25 per share diluted, after
  taxes) and $309,000 ($207,000 or $.02 per share diluted, after taxes) for fiscal
  2002 and 2001, respectively.
  
  (2) Percent of sales column is  calculated as a % of income (loss) before income
  taxes.
  
  (3) Excludes  restructuring and related charges of $9.7 million ($5.8 million or
  $.51 per share diluted,  after taxes) and $4.2 million ($2.8 million or $.26 per
  share  diluted,  after taxes ) for the fourth  quarter of fiscal 2002 and fiscal
  2001,  respectively;  and $12.2 million ($7.4 million or $.66 per share diluted,
  after taxes) and $7.4 million  ($5.0  million or $.44 per share  diluted,  after
  taxes) for fiscal 2002 and 2001, respectively.
  
  
  
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                             CONSOLIDATED BALANCE SHEETS
                          APRIL 28, 2002 and APRIL 29, 2001
  
                               (Amounts in Thousands)
  <TABLE>
  <CAPTION>
                                                          Amounts                Increase
                                               ---------------------------      (Decrease)
                                                   April 28,     April 29,  ----------------------
                                                     2002         2001       Dollars      Percent
                                               -------------  ----------    ----------   ---------
  <S>                                         <C>               <C>         <C>         <C>
  Current assets
       Cash and cash investments              $       31,993       1,207      30,786     2,550.6 %
       Accounts receivable                            43,366      57,849     (14,483)      (25.0)%
       Inventories                                    57,899      59,997      (2,098)       (3.5)%
       Other current assets                           13,413       7,856       5,557        70.7 %
                                                -------------  ----------   ----------   ---------
               Total current assets                  146,671     126,909      19,762        15.6 %
  
  
  Property, plant & equipment, net                    89,772     112,322     (22,550)      (20.1)%
  Goodwill                                            47,083      48,478      (1,395)       (2.9)%
  Other assets                                         4,187       1,871       2,316       123.8 %
                                                -------------  ----------   ----------   ---------
  
               Total assets                   $      287,713     289,580      (1,867)       (0.6)%
                                                =============  ==========   ==========   =========
  
  
  
  Current liabilities
       Current maturities of long-term debt   $        1,483       2,488      (1,005)      (40.4)%
       Accounts payable                               24,327      27,371      (3,044)      (11.1)%
       Accrued expenses                               18,905      17,153       1,752        10.2 %
       Income taxes payable                                0       1,268      (1,268)        0.0 %
                                                -------------  ----------   ----------   ---------
               Total current liabilities              44,715      48,280      (3,565)       (7.4)%
  
  
  Long-term debt                                     107,001     109,168      (2,167)       (2.0)%
  
  
  Deferred income taxes                               16,932      10,330       6,602        63.9 %
                                                -------------  ----------   ----------   ---------
               Total liabilities                     168,648     167,778         870         0.5 %
  
  
  Shareholders' equity                               119,065     121,802      (2,737)       (2.2)%
                                                -------------  ----------   ----------   ---------
  
               Total liabilities and
               shareholders' equity           $      287,713     289,580      (1,867)       (0.6)%
                                                =============  ==========   ==========   =========
  
  Shares outstanding                                  11,320      11,221          99         0.9 %
                                                =============  ==========   ==========   =========
  
  </TABLE>
  <PAGE>
  
  
                                     CULP, INC.
                            FINANCIAL INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE TWELVE MONTHS ENDED APRIL 28, 2002 AND APRIL 29, 2001
  
                               (Amounts in Thousands)
  <TABLE>
  <CAPTION>
                                                                             TWELVE MONTHS ENDED
                                                                          --------------------------
                                                                                   Amounts
                                                                          --------------------------
                                                                           April 28,     April 29,
                                                                             2002          2001
                                                                          ------------  ------------
  <S>                                                                 <C>              <C>
  Cash flows from operating activities:
      Net loss                                                         $       (3,440)       (8,311)
      Adjustments to reconcile net loss to net cash
         provided by operating activities:
              Depreciation                                                     17,274        19,391
              Amortization of intangible and other assets                       1,575         1,591
              Amortization of deferred compensation                               144           360
              Provision for deferred income taxes                              (1,452)       (5,394)
              Restructuring expense                                            10,368         5,625
              Changes in assets and liabilities:
                  Accounts receivable                                          14,483        17,374
                  Inventories                                                   2,098        14,474
                  Other current assets                                          2,504           827
                  Other assets                                                   (311)          171
                  Accounts payable                                                998        (4,530)
                  Accrued expenses                                               (796)       (6,767)
                  Income taxes payable                                         (1,268)        1,268
                                                                          ------------  ------------
                        Net cash provided by operating activities              42,177        36,079
                                                                          ------------  ------------
  Cash flows from investing activities:
      Capital expenditures                                                     (4,729)       (8,050)
      Sales of investments related to deferred compensation plan                    0         4,547
                                                                          ------------  ------------
                        Net cash used in investing activities                  (4,729)       (3,503)
                                                                          ------------  ------------
  Cash flows from financing activities:
      Proceeds from issuance of long-term debt                                      0           564
      Principal payments on long-term debt                                     (3,172)      (26,394)
      Change in accounts payable-capital expenditures                          (4,042)       (5,386)
      Dividends paid                                                                0        (1,177)
      Proceeds from common stock issued                                           552            17
                                                                          --------------------------
                        Net cash used in financing activities                  (6,662)      (32,376)
                                                                          ------------  ------------
  
  Increase in cash and cash investments                                        30,786           200
  
  Cash and cash investments at beginning of period                              1,207         1,007
                                                                          ------------  ------------
  
  Cash and cash investments at end of period                          $        31,993         1,207
                                                                          ============  ============
  
  </TABLE>
  <PAGE>
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL ANALYSIS
                                   APRIL 28, 2002
  
  <TABLE>
  <CAPTION>
  
                                             FISCAL 01                           FISCAL 02
                                           -------------   ------------------------------------------------------   --------------
                                                Q4              Q1           Q2            Q3            Q4            LTM (3)
                                           -------------   ------------------------------------------------------   --------------
  <S>                                         <C>            <C>            <C>           <C>           <C>          <C>
  
  INVENTORIES
         Inventory turns                            5.4             5.1           5.4           5.1          5.8
  
  RECEIVABLES
         Days sales in receivables                   52              51            47            43           36
         Percent current & less than 30
           days past due                          95.5%           91.9%         92.7%         96.0%        98.7%
  
  WORKING CAPITAL
         Current ratio                              2.6             2.8           2.8           3.2          3.3
         Working capital turnover (2)               4.0             4.1           4.1           4.2          4.5
         Operating working capital (2)          $90,475         $86,586       $84,346       $84,233      $76,938
  
  PROPERTY, PLANT & EQUIPMENT
         Depreciation rate                         7.4%            7.2%          7.1%          7.1%         7.3%
         Percent property, plant &
           equipment are depreciated              54.9%           56.2%         58.1%         59.0%        59.8%
         Capital expenditures                    $8,050 (1)      $1,602          $686        $1,105       $1,336
  
  PROFITABILITY
         Return on average total capital (6)       4.8%          (0.1%)          3.9%          2.4%         9.5%             3.8%
         Return on average equity (6)              4.7%          (4.5%)          3.2%          0.7%        14.0%             3.3%
         Net income (loss) per share            ($0.13)         ($0.26)         $0.08         $0.02      ($0.14)          ($0.31)
         Net income (loss) per share  (diluted) ($0.13)         ($0.26)         $0.08         $0.02      ($0.14)          ($0.31)
         Net income (loss) per share, excluding
           restructuring and related charges,
           (diluted) (5)                         $0.13          ($0.12)         $0.09         $0.02        $0.36            $0.35
  
  LEVERAGE
         Total liabilities/equity               137.7%          136.6%         136.8%        129.6%       141.6%
         Funded debt/equity                      91.7%           93.1%          92.3%         91.7%        91.1%
         Funded debt/capital employed            47.8%           48.2%          48.0%         47.8%        47.7%
         Funded debt                          $111,656        $110,652       $110,583      $110,087     $108,484
         Funded debt/EBITDA (LTM) (4)             4.23            4.26           4.26          3.64         3.29
  
  OTHER
         Book value per share                   $10.85          $10.59         $10.68        $10.62       $10.52
         Employees at quarter end                3,127           3,018          3,018         3,015        3,010
         Sales per employee (annualized)      $122,000        $113,000       $128,000      $120,523     $143,930
         Capital employed                     $233,458        $229,461       $230,421      $230,999     $227,549
         Effective income tax rate               33.1%           34.0%          34.0%         34.0%        52.4%
         EBITDA (4)                            $10,363          $4,731         $8,315        $6,862      $13,068          $32,976
         EBITDA/net sales (4)                    10.3%            5.5%           8.6%          7.6%        12.1%             8.6%
  
  (1) Expenditures for entire year
  (2) Working capital for this calculation is accounts receivable, inventories and
      accounts payable.
  (3) LTM represents "Latest Twelve Months"
  (4) EBITDA  includes  earnings  before  interest,  income  taxes,  depreciation,
      amortization, all restructuring and related  charges  and  certain  non-cash
      charges, as defined by the company's credit agreement.
  (5) Excludes restructuring and related charges of $12.2 million ($7.4 million or
      $.66 per share diluted, after taxes) for the last twelve months.
  (6) Excludes restructuring and related charges
  
  </TABLE>
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                               SALES BY PRODUCT GROUP
   FOR THE THREE MONTHS AND TWELVE MONTHS ENDED APRIL 28, 2002 AND APRIL 29, 2001
                               (Amounts in thousands)
  
  <TABLE>
  <CAPTION>
                                                       THREE MONTHS ENDED
                                   ------------------------------------------------------------
                                         Amounts                        Percent of Total Sales
                                   --------------------                 -----------------------
                                   April 28,   April 29,    % Over
   Product Group                      2002       2001        (Under)      2002        2001
  ------------------------------   ---------  ---------   ------------  ----------   ----------
  <S>                           <C>            <C>          <C>         <C>          <C>
  Upholstery Fabrics
      Culp Decorative Fabrics   $    42,973     41,046        4.7 %       39.6 %       40.6 %
      Culp Velvets/Prints            34,594     31,327       10.4 %       31.9 %       31.0 %
      Culp Yarn                       1,494      2,417      (38.2)%        1.4 %        2.4 %
                                   ---------  ---------   ------------  ----------   ----------
                                     79,061     74,790        5.7 %       72.9 %       74.0 %
  
  Mattress Ticking
      Culp Home Fashions             29,336     26,281       11.6 %       27.1 %       26.0 %
                                   ---------  ---------   ------------  ----------   ----------
  
                              * $   108,397    101,071        7.2 %      100.0 %      100.0 %
                                   =========  =========   ============  ==========   ==========
  
  
  
  
                                                       TWELVE MONTHS ENDED
                                   ------------------------------------------------------------
                                         Amounts                        Percent of Total Sales
                                   --------------------                 -----------------------
                                   April 28,   April 29,    % Over
  Product Group                      2002       2001        (Under)        2002        2001
  ------------------------------   ---------  ---------   ------------  ----------   ----------
  Upholstery Fabrics
      Culp Decorative Fabrics   $   152,505    170,326      (10.5)%        39.9 %      41.6 %
      Culp Velvets/Prints           119,119    122,105       (2.4)%        31.1 %      29.8 %
      Culp Yarn                       5,306     12,581      (57.8)%         1.4 %       3.1 %
                                   ---------  ---------   ------------  ----------   ----------
                                    276,930    305,012       (9.2)%        72.5 %      74.4 %
  
  Mattress Ticking
      Culp Home Fashions            104,948    104,798        0.1 %        27.5 %      25.6 %
                                   ---------  ---------   ------------  ----------   ----------
  
                              * $   381,878    409,810       (6.8)%       100.0 %     100.0 %
                                   =========  =========   ============  ==========   ==========
  </TABLE>
  
  
  * U.S.  sales were $94,760 and $85,314 for the fourth quarter of fiscal 2002 and
  fiscal 2001,  respectively;  and $ 328,377 and $331,986 for the twelve months of
  fiscal 2002 and 2001,  respectively.  The percentage  increase in U.S. sales was
  11.1% for the fourth quarter and a decrease of 1.1% for the twelve months.
  
  <PAGE>
  
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                       INTERNATIONAL SALES BY GEOGRAPHIC AREA
   FOR THE THREE MONTHS AND TWELVE MONTHS ENDED APRIL 28, 2002 AND APRIL 29, 2001
                               (Amounts in thousands)
  
  <TABLE>
  <CAPTION>
                                                         THREE MONTHS ENDED
                                  -----------------------------------------------------------------
                                          Amounts                          Percent of Total Sales
                                  -------------------------                ------------------------
                                   April 28,    April 29,      % Over
       Geographic Area               2002          2001       (Under)          2002         2001
  ---------------------------     ------------  -----------  -----------   ----------    ----------
  <S>                            <C>              <C>        <C>            <C>          <C>
  North America (Excluding USA)  $      9,010        7,872     14.5 %         66.1 %       50.0 %
  Europe                                  176        1,334    (86.8)%          1.3 %        8.5 %
  Middle East                           1,422        3,375    (57.9)%         10.4 %       21.4 %
  Far East & Asia                       2,289        2,394     (4.4)%         16.8 %       15.2 %
  South America                           411          296     38.9 %          3.0 %        1.9 %
  All other areas                         329          486    (32.3)%          2.4 %        3.1 %
                                  ------------  -----------  -----------   ----------    ----------
  
                                 $     13,637       15,757    (13.5)%        100.0 %      100.0 %
                                  ============  ===========  ===========   ==========    ==========
  
  
  
  
                                                        TWELVE MONTHS ENDED
                                  -----------------------------------------------------------------
                                          Amounts                          Percent of Total Sales
                                  -------------------------                ------------------------
                                   April 28,    April 29,      % Over
       Geographic Area               2002          2001       (Under)          2002         2001
  ---------------------------     ------------  -----------  -----------   ----------    ----------
  North America (Excluding USA)  $     32,033       34,049     (5.9) %        60.0 %       43.8 %
  Europe                                2,291        6,262    (63.4) %         4.3 %        8.0 %
  Middle East                           6,226       17,831    (65.1) %        11.6 %       22.9 %
  Far East & Asia                      10,703       15,497    (30.9) %        20.0 %       19.9 %
  South America                           902        1,028    (12.3) %         1.7 %        1.3 %
  All other areas                       1,346        3,157    (57.4) %         2.5 %        4.1 %
                                  ------------  -----------  -----------   ----------    ----------
  
                                 $     53,501       77,824    (31.3) %       100.0 %      100.0 %
                                  ============  ===========  ===========   ==========    ==========
  
  </TABLE>
  
  International  sales,  and the  percentage of total sales,  for each of the last
  three fiscal years follows:  fiscal  2000-$111,104  (23%);  fiscal  2001-$77,824
  (19%);fiscal  2002 $53,501  (14%).  International  sales for the fourth  quarter
  represented 13% and 16% for fiscal 2002 and 2001, respectively.
  <PAGE>
  
  
  
                                     CULP, INC.
                  PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
            FOR THE THREE MONTHS ENDED APRIL 28, 2002 AND APRIL 29, 2001
                  (Amounts in Thousands, Except for Per Share Data)
  
  <TABLE>
  <CAPTION>
                                                         THREE MONTHS ENDED (UNAUDITED)
                                 -------------------------------------------------------------------------------
                                                                           April 28,                  April 29,
                              As Reported                                    2002                       2001
                               April 28,    % of     Reclassification    Proforma Net    % of        Proforma Net     % of     % Over
                                 2002     Net Sales  & Adjustments    of Restructuring  Net Sales  of Restructuring  Net Sales (Under)
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
  <S>                           <C>        <C>        <c>                <C>            <C>         <C>             <C>         <C>
  Net sales                     $ 108,397  100.0%                          108,397        100.0%      101,071         100.0%      7.2%
  Cost of sales                    85,379   78.8%           (619) (2)       84,760         78.2%       84,853          84.0% (6) -0.1%
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
        Gross profit               23,018   21.2%           (619)           23,637         21.8%       16,218          16.0%     45.7%
  
  Selling, general and
    administrative expenses        14,236   13.1%         (1,244)           12,992         12.0%       10,496          10.4%     23.8%
  Bad debt expense                                         1,244             1,244          1.5%          121           0.1%    928.1%
  Restructuring expense             9,065    8.4%         (9,065) (3)            0          0.0%            0           0.0% (6)  0.0%
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
        Income  (loss) from
           operations                (283)  -0.3%         (9,684)            9,401          8.7%        5,601           5.5%     67.8%
  
  Interest expense                  2,056    1.9%              0             2,056          1.9%        2,284           2.3%    -10.0%
  Interest income                     (77)  -0.1%              0               (77)        -0.1%           (6)          0.0%   1183.3%
  Other expense (income), net       1,067    1.0%              0             1,067          1.0%        1,209           1.2%    -11.7%
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
        Income (loss) before
           income taxes            (3,329)  -3.1%         (9,684)            6,355          5.9%        2,114           2.1%    200.6%
  
  Income taxes  (1)                (1,744)  52.4%         (3,905)            2,161         34.0% (4)      700          33.1%    208.8%
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
  
        Net income (loss)       $  (1,585)  -1.5%         (5,779)            4,194          3.9%        1,414           1.4%    196.6%
                                 =================   ================ ===========================  ================  ========= =======
  
  Net income (loss) per share      ($0.14)                ($0.51)            $0.37                      $0.13
  Net income (loss) per share,
     assuming dilution             ($0.14)                ($0.51)            $0.36                      $0.13
  Average shares outstanding       11,255                 11,255            11,255                     11,212
  Average shares outstanding,
     assuming dilution             11,255                 11,255            11,564 (5)                 11,276 (5)
  </TABLE>
  
  Notes:
  (1) Percent of sales column is  calculated as a % of income (loss) before income
      taxes.
  (2) The $619,000 represents  inventory  write-downs  incurred due to the exit of
      the wet printed flock upholstery fabric business.
  (3) The $9.1 million represents restructuring charges related to the exit of the
      wet printed flock upholstery  fabric business  as follows:  $1.4 million in
      plant  closing  costs,  and $7.6  million  in non-cash  write-downs  to  net
      realizable value of property, plant and equipment.
  (4) Pre-restructuring income tax rate is 34%
  (5) Incremental  shares of 309,000  for fiscal  2002 and 64,000 for fiscal 2001
      included in fully diluted calculation
  (6) $1.1  million  of  Culp  Decorative  Fabrics  (CDF)  and  Culp  Yarn  (CYN)
      restructuring  related  charges are excluded from the cost of sales total;
      and, $3.1  million  in CDF and  CYN restructuring  charges  are  excluded to
      arrive at the proforma amounts.
  
  <PAGE>
  
  
  
  
  
                                     CULP, INC.
                  PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                        FOR THE TWELVE MONTHS ENDED APRIL 28,
                               2002 AND APRIL 29, 2001
                    (Amounts in Thousands, Except Per Share Data)
  
  <TABLE>
  <CAPTION>
  
                                                              TWELVE MONTHS ENDED
                                 -------------------------------------------------------------------------------
                                                                           April 28,                   April 29,
                              As Reported                                    2002                        2001
                               April 28,    % of     Reclassification    Proforma Net    % of        Proforma Net     % of     % Over
                                 2002     Net Sales  & Adjustments    of Restructuring  Net Sales  of Restructuring  Net Sales (Under)
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
  <S>                           <C>         <C>        <c>                <C>          <C>           <C>           <C>          <C>
  Net sales                     $  381,878  100.0%                           381,878     100.0%        409,810       100.0%      -6.8%
  Cost of sales                    319,021   83.5%        (1,825) (2)        317,196      83.1%        352,018        85.9% (6)  -9.9%
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
        Gross profit                62,857   16.5%        (1,825)             64,682      16.9%         57,792        14.1%      11.9%
  
  Selling, general and
    administrative expenses         48,059   12.6%        (4,172)             43,887      11.5%         50,057        12.2%     -12.3%
  Bad debt expense                                         4,172               4,172       1.3%            309         0.1%    1250.2%
  Restructuring expense             10,368    2.7%       (10,368) (3)              0       0.0%              0         0.0% (6)   0.0%
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
        Income  (loss) from
           operations                4,430    1.2%       (12,193)             16,623       4.4%          7,426         1.8%     123.8%
  
  Interest expense                   7,907    2.1%             0               7,907       2.1%          9,114         2.2%     -13.2%
  Interest income                     (176)   0.0%             0                (176)      0.0%            (46)        0.0%     282.6%
  Other expense (income), net        2,839    0.7%             0               2,839       0.7%          3,336         0.8%     -14.9%
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
        Income (loss) before
           income taxes             (6,140)  -1.6%       (12,193)              6,053       1.6%         (4,978)       -1.2%    -221.6%
  
  Income taxes  (1)                 (2,700)  44.0%        (4,758)              2,058      34.0% (4)     (1,643)       33.0%    -225.3%
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
  
        Net income (loss)       $   (3,440)  -0.9%        (7,435)              3,995       1.0%         (3,335)       -0.8%    -219.8%
                                 =================   ================ ===========================  ================  ========= =======
  
  Net income (loss) per share       ($0.31)               ($0.66)              $0.36                    ($0.30)
  Net income (loss) per share,
     assuming dilution              ($0.31)               ($0.66)              $0.35                    ($0.30)
  Average shares outstanding        11,230                11,230              11,230                    11,210
  Average shares outstanding,
     assuming dilution              11,230                11,230              11,457 (5)                11,210
  
  </TABLE>
  
  Notes:
  (1) Percent of sales column is  calculated as a % of income (loss) before income
      taxes.
  (2) The $1.8  million in  restructuring  related  charges are as  follows:  $1.2
      million in CDF and CYN charges; and $619,000 in wet printed flock charges.
  (3) The $10.4  million in  restructuring  charges are as follows:  $1.3 million,
      relating  to CDF and CYN; and  $9.1  million relating  to wet printed  flock
      business.
  (4) Pre-restructuring income tax rate is 34%
  (5) Incremental shares of 227,000 included in fully diluted calculation
  (6) $1.8 million of CDF and CYN restructuring  related charges are excluded from
      the cost of sales total; and $5.6 million in CDF and CYN  restructuring
      charges are excluded to arrive at the proforma amounts.
  
  
  <PAGE>
  
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
   for the three and twelve month periods ended April 28, 2002 and April 29, 2001
  
  
  INCOME STATEMENT COMMENTS
  
       GENERAL  - For the  fourth  quarter,  net  sales  increased  7.2% to  108.4
  million;  and the company  reported  net  income,  excluding  restructuring  and
  related charges, of $4.2 million, or $0.36 per share diluted,  versus net income
  of $1.4 million,  or $0.13 per share  diluted,  in the fourth  quarter of fiscal
  2001, also excluding  restructuring  and related  charges.  For fiscal 2002, net
  sales decreased 6.8% to $381.9 million;  and the company  reported net income of
  $4.0 million,  or $0.35 per share diluted,  excluding  restructuring and related
  charges,  versus a net loss of $3.3 million,  or $0.30 per share diluted, a year
  ago, also excluding  restructuring  and related  charges.  As described below in
  "SG&A  EXPENSES," a  significant  factor  affecting  the fourth  quarter and the
  entire 2002 fiscal year was bad debt expense of $1.2  million and $4.2  million,
  respectively ($0.07 and $0.25 per share,  respectively,  on an after-tax basis).
  This  compares  with bad debt  expense of $121,000  and  $309,000 for the fourth
  quarter and fiscal year of 2001,  respectively.  After restructuring and related
  charges,  the company reported a net loss for the fourth quarter of 2002 of $1.6
  million, or $0.14 per share diluted, versus a net loss of $1.4 million, or $0.13
  per share  diluted,  for the fourth  quarter of 2001.  After  restructuring  and
  related charges,  the company reported a net loss of $3.4 million,  or $0.31 per
  share  diluted,  for 2002,  and a net loss of $8.3  million,  or $0.74 per share
  diluted, for 2001.
  
       PROFORMA  CONSOLIDATED  STATEMENTS  OF  INCOME  (LOSS) -- The  company  has
  included,  within this financial information release, proforma income statements
  for the fourth  quarter and fiscal  year of 2002 which  reconcile  the  reported
  income  statements for those periods with proforma results excluding the effects
  of the  restructuring  and related charges incurred by the company during fiscal
  2002. Additionally, the proforma results for 2002 are compared with the proforma
  results of the fourth quarter and fiscal year 2001, excluding  restructuring and
  related charges. (See PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS) on pages
  7 and 8 of this financial information release.)
  
       The company's  long-term,  strategic plan encompasses  several  competitive
  initiatives:
  
       Broad Product  Offering - continuing to market one of the broadest  product
       lines in  upholstery  fabrics and mattress  ticking.  Through its extensive
       manufacturing  capabilities,  the company competes in most major categories
       except leather;
  
       Diverse  Customer Base - maintaining a diverse  customer  base. The company
       has long-standing  relationships  with the major residential  furniture and
       bedding  manufacturers.  Ownership  of  resources  in the home  furnishings
       industry  is  becoming  increasingly  concentrated,  and  the  company  has
       successfully  been able to  capitalize  on its size and product  breadth to
       supply more of the needs of existing customers.
  
       Design  Innovation  -  supplying  fabrics  that are  fashionable  and match
       current consumer preferences.  The company's principal design resources are
       consolidated  in a  single  facility  that has  advanced  computer-assisted
       design  systems and promotes  sharing of innovative  designs across product
       lines.  Culp encourages  active  customer  involvement in the entire design
       process; and
  
       Vertical  Integration - operating as a vertically  integrated  manufacturer
       and  taking  advantage  of  economies,  quality,  supply  availability  and
       efficiencies  that can be gained by producing  the raw material  components
       that are used in the manufacture of its products.
  
       EXIT OF WET PRINTED FLOCK PRODUCT LINE - The company  previously  announced
  during the fourth quarter that it was evaluating strategic  alternatives for the
  capital  invested in  manufacturing  and marketing wet printed flock  upholstery
  fabrics. Management took this action because of the significant decline in sales
  and  profitability  of wet printed  flocks in recent  years,  a decline  related
  principally to the strength of the U.S. dollar relative to foreign currencies as
  well as a shift in consumer  preferences to other styles of upholstery  fabrics.
  In  April  2002  management  approved  a plan to  exit  the  wet  printed  flock
  upholstery fabric business and is actively seeking to sell the assets related to
  this  product  line.  The exit plan  involved  closing a printing  facility  and
  flocking operations within the Culp  Velvets/Prints  division and a reduction in
  related selling and administrative expenses. The company also recognized certain
  inventory  write-downs  related to this product line.  The total charge from the
  exit plan and inventory write-down was $9.7 million,  approximately $8.2 million
  of which  represented  non-cash items.  The company recorded the total charge in
  the fourth  quarter of fiscal 2002. Of this total,  $9.1 million was recorded in
  the line item  "Restructuring  expense"  and $600,000  related to the  inventory
  write-downs  was recorded in "Cost of sales." The company  estimates  the annual
  after-tax  carrying costs to maintain the  facilities  until the assets are sold
  will be approximately $200,000, or $0.02 per share. During the fiscal year ended
  April 28, 2002, sales of wet printed flocks contributed $17.1 million,  or 4.5%,
  of the company's  total sales and resulted in an operating loss of $2.1 million.
  The  company  estimates  that  the  net  loss on an  after-tax  basis  would  be
  approximately $0.12 per share.
  
  
       OTHER RESTRUCTURING ACTIONS - During fiscal 2001 and continuing into fiscal
  2002, the company  undertook a  restructuring  plan intended to lower  operating
  expenses,  increase manufacturing  utilization,  raise productivity and position
  the  company  to  operate  profitably  on a 20% lower  level of sales.  The plan
  involved the consolidation of certain fabric  manufacturing  capacity within the
  Culp Decorative  Fabrics (CDF) division,  closing one of the company's four yarn
  manufacturing  plants  within  Culp Yarn,  an  extensive  reduction  in selling,
  general and administrative expenses and a comprehensive SKU reduction initiative
  related to  finished  goods and raw  materials  in CDF.  Additionally,  the plan
  included consolidation of the CDF design effort into the company's Design Center
  and the  implementation of a common set of raw material  components for CDF. The
  company also  recognized  certain  inventory  write-downs  related to the closed
  facilities  as  part of this  initiative.  While  the  physical  relocation  and
  movement of machinery and equipment  involved in the restructuring was completed
  by the end of the  second  quarter  and the  related  fixed  manufacturing  cost
  savings  achieved,  the  company  still  has much  improvement  to make to reach
  targeted productivity and variance levels in the CDF division.  The total charge
  from the restructuring,  cost reduction and inventory write-down initiatives was
  $9.9  million,  about $3.6  million of which  represented  non-cash  items.  The
  company  recognized  $7.4 million of  restructuring  and related  charges during
  fiscal  2001,  and $2.5  million  in the  first  nine  months  of  fiscal  2002.
  Restructuring  and related charges for fiscal 2002 were recorded as $1.3 million
  in the line item  "Restructuring  expense"  and $1.2 million in "Cost of sales."
  The costs reflected in "Cost of sales" are principally related to the relocation
  of manufacturing  equipment.  Due to the restructuring plan, the company has now
  realized  annualized  reductions of at least $14 million in fixed  manufacturing
  costs  and  SG&A  expenses.  Management  believes  the  company  now has a sound
  footprint  of  efficient,   world-class  facilities  utilizing  state-of-the-art
  equipment  that  position  Culp well to meet the  demands by  manufacturers  for
  shorter lead times, reliable delivery schedules and appealing designs.
  
       NET SALES - Compared with the year-earlier  period, the company's net sales
  increased  7.2% for the fourth  quarter of fiscal 2002.  This sales  performance
  represents  the first  quarterly  sales gain in over two years,  since the third
  quarter of fiscal 2000. For fiscal 2002 as a whole,  sales were $381.9  compared
  to $409.8 in fiscal 2001.
  
  Compared  with fiscal 2001,  upholstery  fabric sales for the fourth  quarter of
  fiscal  2002  increased  5.7% to $79.1  million,  and  decreased  9.2% to $276.9
  million for fiscal 2002 (See Sales by  Segment/Division on Page 5). Reflecting a
  reversal of the trends in the first three quarters,  domestic  upholstery fabric
  sales  increased by 10% to $69.0  million in the fourth  quarter of fiscal 2002.
  For fiscal year 2002,  domestic  upholstery  fabric  sales  decreased by 3.3% to
  $236.6 million.  The decrease related to a decline in sales to the external yarn
  market ($7.3  million),  where the company exited certain  businesses,  and to a
  decline in sales to the commercial furniture market ($4.5 million).  The company
  believes that it is improving its market share in the U.S. residential furniture
  market because of well-received fabric placements in the Culp Decorative Fabrics
  and Culp Velvets/Prints divisions.  International sales of upholstery fabric for
  the fourth  quarter of fiscal  2002 were  $10.1  million,  down 15.8% from $12.0
  million in the same quarter of the prior year. International sales of upholstery
  fabric for  fiscal  2002 were $40.3  million,  down 33.2% from $60.4  million in
  fiscal 2001.
  
  Compared  with fiscal 2001,  mattress  ticking  sales for the fourth  quarter of
  fiscal  2002  increased  11.6% to $29.3  million,  and  increased  .1% to $104.9
  million for fiscal 2002. Sales to U.S. bedding manufacturers  increased 14.6% to
  $25.8 million in the fourth  quarter of fiscal 2002, and increased 5.0% to $91.7
  million for fiscal 2002. The company believes that it is gaining market share in
  the U.S.  bedding  market as well.  International  ticking  sales for the fourth
  quarter of fiscal  2002 were $3.6  million,  down 6.1% from $3.8  million in the
  same  quarter of last year.  International  ticking  sales for fiscal  2002 were
  $13.2 million, down 24.5% from $17.5 million in fiscal 2001.
  
       GROSS PROFIT - Excluding the restructuring related charges recorded in cost
  of sales  during  2001 and 2002,  gross  profit  increased  45.7% for the fourth
  quarter of fiscal 2002 compared with the year earlier  period and increased as a
  percentage  of net  sales to 21.8%  from  16.0%.  This  significant  improvement
  reflects  solid  progress  in gross  profit  dollars  and margins in each of the
  company's  four  divisions.  The key factors behind these gains were: (1) a more
  profitable  sales  mix  across  the  divisions;  (2)  the  benefit  of the  2001
  restructuring  actions taken in Culp Decorative Fabrics (CDF) and Culp Yarn; and
  (3) better  sales volume and the related  higher  capacity  utilization  in each
  division.  For fiscal 2002 as a whole,  gross  profit,  excluding  restructuring
  related  charges,  increased 11.9% compared with fiscal 2001, and increased as a
  percentage of net sales to 16.9% from 14.1%.  This improvement  reflected strong
  gross  profit  dollar  and  margin  growth  in  the  Culp  Home  Fashions,  Culp
  Velvets/Prints  and Culp Yarn divisions.  Offsetting  these gains somewhat was a
  decrease in gross profit dollars and margin in Culp  Decorative  Fabrics,  which
  occurred in the first half of fiscal 2002.  The fourth quarter  represented  the
  first  year-over-year  positive  comparison in sales and gross profit for CDF in
  nine quarters. The company is optimistic that gross profit margins in CDF can be
  improved  significantly over the next one to two years. In order to achieve this
  margin improvement, management expects the key drivers will be (1) improving the
  profitability of the current sales mix; (2) improving manufacturing performance,
  in terms of  productivity  and  inventory  obsolescence;  and (3)  modest  sales
  growth.
  
       SG&A EXPENSES - SG&A expenses were $14.2 million for the fourth quarter and
  increased $3.6 million,  or 34.1%,  over the year earlier period.  This increase
  resulted  primarily  from  bad  debt  expense  of $1.2  million  and  management
  incentive  compensation expense of $1.8 million during the quarter.  Through the
  first nine months of fiscal 2002, the company had reported a net loss, after and
  before  restructuring  charges;  therefore  no incentive  compensation  had been
  earned or recorded.  Without  considering  bad debt and  incentive  compensation
  expense, SG&A expenses were $11.2, or 10.3% of net sales, for the fourth quarter
  of fiscal 2002, compared with $10.5 million, or 10.4% of net sales, for the same
  quarter of fiscal 2001.  SG&A  expenses  were $48.1 million for fiscal 2002 as a
  whole and decreased $2.3 million,  or 4.6%,  from fiscal 2001.  The  significant
  factors  affecting  the year to year  comparisons  were bad debt expense of $4.2
  million in fiscal 2002 versus $309,000 in fiscal 2001 and incentive compensation
  expense of $1.8  million in fiscal  2002  versus  $0.0 in fiscal  2001.  Without
  considering  these factors in both years,  SG&A expenses were $42.1 million,  or
  11.1% of net sales,  for fiscal 2002,  compared with $50.0 million,  or 12.2% of
  net sales,  for  fiscal  2001.  This  reflects a 15.8%  decrease  and  primarily
  resulted from the company's  decision to reduce SG&A expenses  significantly  as
  part of the 2001 restructuring plan.
  
       INTEREST  EXPENSE - Interest  expense for the fourth quarter declined 10.0%
  from $2.3  million to $2.1  million and for the fiscal year from $9.1 million to
  $7.9 million due to lower  borrowings  outstanding  and lower  average  interest
  rates over the course of the fiscal year.  Interest income  increased due to the
  significant build up in Cash and Cash Investments during the year.
  
       OTHER EXPENSE (INCOME), NET - Other expense (income) for the fourth quarter
  of fiscal 2002  totaled  $1.1  million  compared  with $1.2 million in the prior
  year. Goodwill  amortization of $1.4 million, or $0.07 per share, is included in
  Other Expense in fiscal 2002 and fiscal 2001.  With the adoption of SFAS No. 142
  in the first quarter of fiscal 2003, the company will no longer record  goodwill
  amortization.
  
       INCOME TAXES - The  effective  tax rate for fiscal 2002 was 44.0%  compared
  with 33.0% for the year-earlier  period.  The higher rate resulted from the 2002
  increased tax benefits related to the company's US loss, including restructuring
  and related  charges,  and to a lower  proportion of earnings from the company's
  Canadian  subsidiaries,  as  well  as the  recognition  in  2001  of  gain  from
  terminated  life  insurance  contracts.  The income tax rate for fiscal  2002 on
  income  before the  restructuring  and related  charges  was 34.0%.  The company
  expects the effective tax rate for fiscal 2003 to be approximately 37.0%.
  
       EBITDA - EBITDA for the fourth  quarter of fiscal 2002  increased  26.0% to
  $13.1 million  compared with $10.4 million for the fourth  quarter of last year,
  and increased 25.0% to $33.0 million for fiscal 2002 compared with $26.4 million
  in  fiscal  2001.  EBITDA  includes  earnings  before  interest,  income  taxes,
  depreciation,  amortization,  all  restructuring and related charges and certain
  non-cash charges, as defined by the company's credit agreement.
  
  
  BALANCE SHEET COMMENTS
  
       CASH AND CASH  INVESTMENTS - Cash and cash investments as of April 28, 2002
  increased to $32.0 million from $1.2 million at fiscal year end, reflecting cash
  flow from  operations of $42.2 million for fiscal 2002,  which exceeded  capital
  expenditures of $4.7 million,  debt repayment of $3.2 million,  and reduction of
  accounts  payable  for  capital  expenditures  of $4.0  million.  Cash  and Cash
  Investments  increased  $21.6  million  during  the  fourth  quarter  due to the
  significant  increase in earnings,  a $4.0 million  income tax refund due to the
  five-year net operating  loss  carrybacks  allowable  under the Job Creation and
  Worker  Assistance  Act passed in March  2002,  continued  reduction  in working
  capital  requirements,  and only $1.3 million in capital  expenditures  and $1.6
  million in debt repayments.
  
       WORKING CAPITAL - Accounts  receivable as of April 28, 2002 decreased 25.0%
  from the  year-earlier  level,  due principally to the decline in  international
  sales with their related  longer credit terms,  and an increase in the number of
  customers  taking  the cash  discount  for  shorter  payment  terms.  Days sales
  outstanding  totaled 36 days at April 28, 2002  compared with 52 a year ago. The
  aging of accounts  receivable  was 98.7%  current and less than 30 days past due
  versus  95.5%  a year  ago.  Inventories  at the  close  of the  fourth  quarter
  decreased 3.5% from a year ago.  Inventory turns for the fourth quarter were 5.8
  versus 5.4 for the year-earlier period.  Operating working capital (comprised of
  accounts receivable,  inventory and accounts payable) was $76.9 million at April
  28, 2002, down from $90.5 million a year ago.
  
       OTHER  CURRENT  ASSETS  - Other  current  assets  increased  70.7% to $13.4
  million, primarily as a result of an increase in refundable income taxes of $1.7
  million and the reclassification,  totaling $4.2 million, of deferred tax assets
  related to net operating loss carryforwards from non-current to current based on
  expected fiscal 2003 utilization.
  
       PROPERTY,  PLANT AND EQUIPMENT - Capital  spending for fiscal 2002 was $4.7
  million, compared with $8.1 million in the year-earlier period. Depreciation for
  fiscal  2002  totaled  $17.3   million.   The  company  is  estimating   capital
  expenditures of $8.0 million for fiscal 2003 and depreciation  expense of $14 to
  $15 million for the year.
  
       GOODWILL - Goodwill at April 28, 2002 was $47.1  million.  The company will
  adopt SFAS No.142 during its first fiscal quarter of fiscal 2003. As a result of
  this adoption,  the company is expecting to record a special,  non-cash goodwill
  impairment  charge in the range of $23 million to $27  million (on an  after-tax
  basis)  related to the  goodwill  associated  with its Culp  Decorative  Fabrics
  division,  which  amounts  to  $42.2  million.  This  charge  will be  reflected
  separately from income from continuing  operations as a cumulative  effect of an
  accounting change and will be presented net of related income tax expense. There
  will be no impact on the  company's  compliance  with the  covenants in its loan
  agreement as a result of this change.
  
       OTHER  ASSETS - Other assets  increased  by $2.3 million  during the fiscal
  year to $4.2 million at April 28, 2002. This increase is principally  related to
  the recording of Assets Held For Sale in conjunction with the exiting of the wet
  printed flock upholstery fabric business.
  
       LONG-TERM  DEBT - The company has  reduced  funded debt by $3.2  million or
  2.9% from the end of the last fiscal  year.  Funded debt equals  long-term  debt
  plus  current  maturities.  Funded  debt was $108.5  million at April 28,  2002,
  compared with $111.7  million at the end of fiscal 2001.  The  company's  funded
  debt-to-capital  ratio was 47.7% at April 28, 2002,  its lowest level since July
  1997.  During fiscal 2001,  the company  amended its credit  facility to include
  terms that restrict the payment of cash dividends and share  repurchases at this
  time,  limit capital  expenditures,  increase the interest rate on its revolving
  credit facility and increase the letter of credit fees on its industrial revenue
  bonds (IRBs). This amended credit facility provides for a loan commitment of $10
  million,  and  expires  on August  22,  2002.  The  company  had no  outstanding
  borrowings  under the  facility  at the end of fiscal  2002.  The company was in
  compliance with all convenants  contained in its loan agreements as of April 28,
  2002.
  
  During  February  2002,  the company  amended its $75 million term loan with its
  lenders to revise  certain  financial  covenants  so that a goodwill  impairment
  charge, if any, would not inadvertently cause a loan covenant violation due only
  to changes in financial  accounting  standards.  In exchange for these  covenant
  changes,  the company agreed to increase the interest rate paid on the term loan
  by 100 basis points.  Therefore,  the  significant  goodwill  impairment  charge
  expected to be  recorded in the first  quarter of fiscal 2003 will not cause any
  violation of its loan covenants with its lenders.
  
  In addition,  reflecting the company's  improved financial results and financial
  position,  the company has received a loan  commitment  from its principal  bank
  lender that  provides,  among other things,  for (1) a two year credit  facility
  starting at $47 million  and  reducing to $27 million as certain IRB  repayments
  are made,  (2)  release  of the  collateral  securing  the  facility,  (3) lower
  interest  rates  based  upon  a  pricing  matrix,  and  (4)  improved  financial
  covenants.  In exchange for these  provisions,  the company  would agree,  among
  other  things,  to repay  approximately  $20  million of its IRB debt by October
  2002,  and pay a credit  facility  fee.  The  company  expects to close this new
  credit facility during the first quarter.
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metadata_filer: {"company-data": {"conformed-name": "CULP INC", "cik": "0000723603", "assigned-sic": "2211", "irs-number": "561001967", "state-of-incorporation": "NC", "fiscal-year-end": "0430"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-12597", "film-number": "02669052"}, "business-address": {"street1": "101 S MAIN ST", "city": "HIGH POINT", "state": "NC", "zip": "27260", "phone": "3368895161"}, "mail-address": {"street1": "P O BOX 2686", "street2": "101 S MAIN ST", "city": "HIGH POINT", "state": "NC", "zip": "27261"}}
text: --------------------------------------------------------------------------------
  
                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549
  
                                     ---------
  
                                     Form 8-K
  
                                  CURRENT REPORT
  
                 Pursuant to Section 13 or 15(d) of the Securities
                               Exchange Act of 1934
  
                                   -------------
  
           Date of Report (Date of earliest event reported) June 3, 2002
  
                                     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 (x pages) and  Financial  Information  Release (13
  pages),  both dated June 3, 2002,  related to the fiscal 2002 fourth quarter and
  year ended April 28, 2002.
  
  Forward  Looking  Information.  This  Report  contains  statements  that  may be
  deemed   "forward-looking   statements"   within  the  meaning  of  the  federal
  securities  laws,  including  the Private  Securities  Litigation  Reform Act of
  1995.  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  significant  percentage  of the  company's  sales  derived  from
  international  shipments,  strengthening  of  the U.  S.  dollar  against  other
  currencies  could make the company's  products less  competitive on the basis of
  price  in  markets  outside  the  United  States.  Additionally,   economic  and
  political  instability  in  international  areas could affect the demand for the
  company's products.
  
                                     SIGNATURE
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
                                      CULP, INC.
                                      (Registrant)
  
                                By:    Franklin  N. Saxon
                                       -------------------
                                       Executive Vice President and
                                       Chief Financial Officer
  FOR IMMEDIATE RELEASE
  
               CULP REPORTS FOURTH QUARTER EARNINGS OF $0.36 PER SHARE
                      BEFORE RESTRUCTURING AND RELATED CHARGES
                               ----------------------
            EXPECTS YEAR-TO-YEAR IMPROVEMENT TO CONTINUE IN FISCAL 2003
  
  HIGH  POINT,  N. C.  (June 3, 2002) -- Culp,  Inc.  (NYSE:  CFI) today  reported
  financial  results for its fourth fiscal  quarter and year ended April 28, 2002,
  including net income  before  restructuring  and related  changes for the fourth
  quarter that was up sharply from the year earlier period.
  
        For the three  months  ended April 28,  2002,  Culp  reported net sales of
  $108.4  million,  up 7.2%  compared  with $101.1  million a year ago.  Excluding
  restructuring  and  related  charges in each  period,  net income for the fourth
  quarter  of fiscal  2002  totaled  $4.2  million,  or $0.36  per share  diluted,
  versus $1.4 million,  or $0.13 per share diluted,  in the  year-earlier  period.
  Including  restructuring  and related  charges in each period,  Culp  reported a
  net loss for the fourth  quarter of fiscal  2002 of $1.6  million,  or $0.14 per
  share  diluted,  compared  with a net loss of $1.4  million,  or $0.13 per share
  diluted, in the year-earlier quarter.
  
        Net  sales  for  fiscal  2002  totaled  $381.9   million,   compared  with
  $409.8 million in the year-earlier period.  Excluding  restructuring and related
  charges  in  each  year,  Culp  reported  net  income  for  fiscal  2002 of $4.0
  million,  or $0.35 per share diluted,  compared with a net loss of $3.3 million,
  or  $0.30  per   share   diluted,   in  the   year-earlier   period.   Including
  restructuring  and  related  charges,  the  Company  reported a net loss of $3.4
  million,  or $0.31 per share  diluted,  for  fiscal  2002 and a net loss of $8.3
  million, or $0.74 per share diluted, for the year-earlier period.
  
        Culp  indicated  that bad debt  expense  for the fourth  quarter of fiscal
  2002 totaled $1.2 million  ($0.07 per share after taxes) versus  $121,000 in the
  year-earlier  period.  Bad debt  expense for fiscal 2002  totaled  $4.2  million
  ($0.25 per share after taxes) compared with $309,000 in fiscal 2001.
  
        The  restructuring  and  related  charges  during  the  fourth  quarter of
  fiscal 2002  relate to the  previously  announced  plan to exit and sell the wet
  printed  flock  business  and  related  assets.  The action  involves  closing a
  printing facility and flocking operations and reducing related selling and
  
  administrative  expenses.  The total charge from exiting this  business was $9.7
  million,  approximately  $8.2 million of which represented  non-cash items. Culp
  estimates the annual  after-tax  carrying costs to maintain the facilities until
  the  assets  are sold  will be  approximately  $200,000,  or $0.02  per  diluted
  share.  During  fiscal  2002,  sales of wet printed  flock  fabrics  contributed
  $17.1  million,  or 4.5% of total  sales,  and the  Company  estimates  that the
  business  resulted  in an  after-tax  net loss of $1.3  million,  or  $0.12  per
  diluted share.
  
        "Our earnings for the fourth quarter  extended the positive  momentum that
  we  established  in the third  quarter,"  remarked  Robert G. Culp,  III,  chief
  executive  officer.  "We benefited  from an  especially  strong  performance  in
  April.  One of the changes that makes  short-term  forecasts  more difficult for
  us is how much lead times in our  industry  have become  shortened.  Our ability
  to provide  manufacturers  with one of the broadest choices of fabrics available
  and to offer  flexible,  prompt  shipping  schedules are two of the  fundamental
  competitive  strengths  playing  to Culp's  advantage.  We  believe  our gain in
  sales  for the  quarter  can be  attributed  in  large  part to our  success  in
  gaining  market  share.  Although the overall 7.2%  increase from a year ago was
  modest,  our increased sales to U.S.-based  manufacturers was somewhat offset by
  a   continuing   decline   in   international   sales.   Sales   to   U.S.-based
  manufacturers  for the quarter rose 10.0% for  upholstery  fabrics and 14.6% for
  mattress  ticking,  gains that we believe  send a strong  signal  affirming  the
  success of our design  programs  and  overall  competitive  position.  Providing
  value to  furniture  and  bedding  manufacturers  demands  not only  competitive
  pricing but also textures and patterns that consumers find appealing.
  
        "We are  starting to realize  more of the  benefit of the various  actions
  we have  taken to  rationalize  our  capacity,  streamline  our  operations  and
  solidify Culp's  leadership in the continued  long-term growth projected for the
  home  furnishings  industry.  The gross profit  margin  percentage  of 21.2% for
  the fourth  quarter in fact marked a new quarterly  record for Culp,  reflecting
  the benefits of our  restructuring  actions,  a more  profitable mix of sales in
  each division and increased  operating  efficiency due to the higher sales.  The
  53%  increase in gross profit in the fourth  quarter,  on a much smaller gain in
  sales,  highlights  the positive  leverage  inherent in our business.  We expect
  results in fiscal  2003 to reflect  more of the savings  from our  restructuring
  moves,  including  the  decision  in the fourth  quarter to exit the wet printed
  flock business."
  
        Culp added,  "Our  objective  for fiscal  2003 is to achieve  year-to-year
  improvement   in  net  income  each   quarter,   excluding  the  impact  of  the
  restructuring  and related  charges  incurred  during  fiscal  2002.  We believe
  that the  fundamentals  of our business  model  provide the potential for Culp's
  profit margin  percentages to return to their historical  highs.  Although we do
  not  expect  to  achieve  those  levels  for  fiscal  2003  as a  whole,  we are
  optimistic  that the trend  during  the year will be  positive,  establishing  a
  strong  platform  for  future  improvement.  We also  expect to  strengthen  our
  balance sheet
  
  further  in the  coming  year.  Our cash  position  at the close of fiscal  2002
  improved to $32.0 million, up
  from $1.2 million at the close of fiscal  2001.  Cash flow from  operations  for
  fiscal 2002 totaled a record $42.2  million,  exceeding  the previous  record in
  fiscal  2001 of $36.1  million.  The new high in cash flow  enabled us to reduce
  debt by $7.2  million and fund  capital  expenditures  of $4.7  million.  We are
  continuing  to manage our  working  capital  closely  and are  pleased  with the
  rebound  in EBITDA to $33.0  million,  up from  $26.4  million  in fiscal  2001,
  excluding restructuring and related charges."
  
  Cumulative Effect of Accounting Change
  
        Culp will adopt SFAS No.  142,  "Goodwill  and Other  Intangible  Assets,"
  effective  as of the  beginning  of  Culp's  2003  fiscal  year.  SFAS  No.  142
  represents a substantial  change in accounting  for goodwill.  Starting in 2003,
  goodwill  will  no  longer  be  amortized  but  instead  will be  evaluated  for
  impairment  annually,  beginning  with the  initial  date of  adopting  SFAS No.
  142.  Culp has  completed a  preliminary  review of its  goodwill and expects to
  record in the first  quarter of fiscal 2003 a non-cash  charge of  approximately
  $23 million to $27 million  after taxes.  The charge,  which will be recorded as
  a  "cumulative  effect of change in accounting  principle,"  will have no effect
  on  operating  income or cash  flow  from  operations  and will not  affect  the
  Company's  compliance with the terms of its lending agreements.  The elimination
  of goodwill  amortization  is expected to result in an annual expense  reduction
  of  approximately  $1.4  million,  or $0.07  per  share,  starting  in the first
  quarter of fiscal 2003.
  
        Culp, Inc. is one of the world's largest  marketers of upholstery  fabrics
  for furniture  and is a leading  marketer of mattress  ticking for bedding.  The
  Company's  fabrics are used  principally in the  production of  residential  and
  commercial furniture and bedding products.
  
        This  release  contains  statements  that may be  deemed  "forward-looking
  statements"  within the meaning of the federal  securities  laws,  including the
  Private   Securities   Litigation  Reform  Act  of  1995.  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  significant
  percentage  of  the  Company's  sales  derived  from  international   shipments,
  strengthening  of the  U.S.  dollar  against  other  currencies  could  make the
  Company's  products less  competitive  on the basis of price in markets  outside
  the  United  States.   Additionally,   economic  and  political  instability  in
  international areas could affect the demand for the Company's products.
  
                                     CULP, INC.
                           Condensed Financial Highlights
  
                                                        Three Months Ended
                                                 -------------------------------
                                                   April 28,          April 29,
                                                      2002              2001
                                                 ---------------   --------------
  Net sales                                      $  108,397,000    $ 101,071,000
  Net loss                                       $   (1,585,000)   $  (1,427,000)
  Net loss per share:
    Basic                                        $       (0.14)    $       (0.13)
    Diluted                                      $       (0.14)    $       (0.13)
  Net income per diluted share, excluding
     restructuring and related charges*          $        0.36     $        0.13
  Average shares outstanding:
    Basic                                            11,255,000       11,212,000
    Diluted                                          11,564,000       11,276,000
  
                                                         Fiscal Year Ended
                                                 --------------------------------
                                                     April 28,         April 29,
                                                       2002              2001
                                                 ---------------   --------------
  Net sales                                      $  381,878,000    $ 409,810,000
  Net loss                                       $   (3,440,000)   $  (8,311,000)
  Net loss per share:
     Basic                                       $        (0.31)   $       (0.74)
     Diluted                                     $        (0.31)   $       (0.74)
  Net income (loss) per diluted share, excluding
     restructuring and related charges*          $         0.35    $       (0.30)
  Average shares outstanding:
     Basic                                           11,230,000       11,210,000
     Diluted                                         11,457,000       11,210,000
  
  * Excludes  restructuring  and related  charges of $9.7 million ($5.8 million or
    $0.51 per share  diluted,  after  taxes) and $12.2  million  ($7.4  million or
    $0.66 per share  diluted,  after taxes) for the fiscal 2002 fourth quarter and
    full year results,  respectively.  Excludes  restructuring and related charges
    of $4.2 million  ($2.8  million or $0.26 per share  diluted,  after taxes) and
    $7.4 million  ($5.0 million or $0.44 per share  diluted,  after taxes) for the
    fiscal 2001 fourth quarter and full year results, respectively.
  
                                        - END -
  CULP, INC. FINANCIAL INFORMATION RELEASE
                      CONSOLIDATED STATEMENTS OF INCOME (LOSS)
   FOR THE THREE MONTHS AND TWELVE MONTHS ENDED APRIL 28, 2002 AND APRIL 29, 2001
                  (Amounts in Thousands, Except for Per Share Data)
  THREE MONTHS ENDED (UNAUDITED)
                                         ----------------------------------------------------------------------
                                                  Amounts                                   Percent of Sales
                                         --------------------------                     -------------------------
                                          April 28,     April 29,      % Over
                                            2002          2001         (Under)            2002         2001
                                         ------------  ------------  ------------       -----------  ------------
  Net sales                           $      108,397       101,071         7.2 %           100.0 %       100.0 %
  Cost of sales                               85,379        85,978        (0.7)%            78.8 %        85.1 %
                                         ------------  ------------  ------------       -----------  ------------
          Gross profit                        23,018        15,093        52.5 %            21.2 %        14.9 %
  
  Selling, general and
    administrative expenses   (1)             14,236        10,617        34.1 %            13.1 %        10.5 %
  Restructuring expense                        9,065         3,121       190.5 %             8.4 %         3.1 %
                                         ------------  ------------  ------------       -----------  ------------
          Income (loss) from  operations        (283)        1,355      (120.9)%            (0.3)%         1.3 %
  
  Interest expense                             2,056         2,284       (10.0)%             1.9 %         2.3 %
  Interest income                                (77)           (6)    1,183.3 %            (0.1)%        (0.0)%
  Other expense (income), net                  1,067         1,209       (11.7)%             1.0 %         1.2 %
                                         ------------  ------------  ------------       -----------  ------------
          Loss before income taxes            (3,329)       (2,132)      (56.1)%            (3.1)%        (2.1)%
  
  Income taxes  (2)                           (1,744)         (705)     (147.4)%            52.4 %        33.1 %
                                         ------------  ------------  ------------       -----------  ------------
  
          Net loss                    $       (1,585)       (1,427)      (11.1)%            (1.5)%        (1.4)%
                                         ============  ============  ============       ===========  ============
  
  Net loss per share                          ($0.14)       ($0.13)       (7.7)%
  Net loss per share, assuming dilution       ($0.14)       ($0.13)       (7.7)%
  Net income per share, excluding
     restructuring and related charges,
     assuming dilution (3)                     $0.36         $0.13       176.9 %
  Average shares outstanding                  11,255        11,212         0.4 %
  Average shares outstanding, assuming
     dilution                                 11,255        11,212         0.4 %
  TWELVE MONTHS ENDED
                                         ----------------------------------------------------------------------
                                                  Amounts                                   Percent of Sales
                                         --------------------------                     -------------------------
                                          April 28,     April 29,      % Over
                                            2002          2001         (Under)              2002         2001
                                         ------------  ------------  ------------       -----------  ------------
  Net sales                           $      381,878       409,810        (6.8)%           100.0 %       100.0 %
  Cost of sales                              319,021       353,823        (9.8)%            83.5 %        86.3 %
                                         ------------  ------------  ------------       -----------  ------------
                                              62,857        55,987        12.3 %            16.5 %        13.7 %
  
  Selling, general and
    administrative expenses (1)               48,059        50,366        (4.6)%            12.6 %        12.3 %
  Restructuring expense                       10,368         5,625        84.3 %             2.7 %         1.4 %
                                         ------------  ------------  ------------       -----------  ------------
          Income (loss) from operations        4,430            (4)           *              1.2 %        (0.0)%
  
  Interest expense                             7,907         9,114       (13.2)%             2.1 %         2.2 %
  Interest income                               (176)          (46)      282.6 %            (0.0)%        (0.0)%
  Other expense (income), net                  2,839         3,336       (14.9)%             0.7 %         0.8 %
                                         ------------  ------------  ------------       -----------  ------------
          Loss before income taxes            (6,140)      (12,408)       50.5 %            (1.6)%        (3.0)%
  
  Income taxes  (2)                           (2,700)       (4,097)       34.1 %            44.0 %        33.0 %
                                         ------------  ------------  ------------       -----------  ------------
  
          Net loss                    $       (3,440)       (8,311)       58.6 %            (0.9)%        (2.0)%
                                         ============  ============  ============       ===========  ============
  Net loss per share                          ($0.31)       ($0.74)       58.1 %
  Net loss per share, assuming dilution       ($0.31)       ($0.74)       58.1 %
  Net income (loss) per share, excluding
     restructuring and related charges,
     assuming dilution (3)                     $0.35        ($0.30)      216.7 %
  Average shares outstanding                  11,230        11,210         0.2 %
  Average shares outstanding, assuming
     dilution                                 11,230        11,210         0.2 %
  
  *   Calculated % not meaningful
  
  (1)  Includes  bad debt  expense of $1.2  million  ($792,000  or $0.07 per share
  diluted,  after taxes) and  $121,000  for the fourth  quarter of fiscal 2002 and
  2001, respectively; and $4,172,000 ($2,753,000 or $0.25 per share diluted, after
  taxes) and $309,000 ($207,000 or $.02 per share diluted, after taxes) for fiscal
  2002 and 2001, respectively.
  
  (2) Percent of sales column is  calculated as a % of income (loss) before income
  taxes.
  
  (3) Excludes  restructuring and related charges of $9.7 million ($5.8 million or
  $.51 per share diluted,  after taxes) and $4.2 million ($2.8 million or $.26 per
  share  diluted,  after taxes ) for the fourth  quarter of fiscal 2002 and fiscal
  2001,  respectively;  and $12.2 million ($7.4 million or $.66 per share diluted,
  after taxes) and $7.4 million  ($5.0  million or $.44 per share  diluted,  after
  taxes) for fiscal 2002 and 2001, respectively.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                             CONSOLIDATED BALANCE SHEETS
                          APRIL 28, 2002 and APRIL 29, 2001
  
                               (Amounts in Thousands)
  Amounts                Increase
                                               ---------------------------      (Decrease)
                                                   April 28,     April 29,  ----------------------
                                                     2002         2001       Dollars      Percent
                                               -------------  ----------    ----------   ---------
  Current assets
       Cash and cash investments              $       31,993       1,207      30,786     2,550.6 %
       Accounts receivable                            43,366      57,849     (14,483)      (25.0)%
       Inventories                                    57,899      59,997      (2,098)       (3.5)%
       Other current assets                           13,413       7,856       5,557        70.7 %
                                                -------------  ----------   ----------   ---------
               Total current assets                  146,671     126,909      19,762        15.6 %
  
  Property, plant & equipment, net                    89,772     112,322     (22,550)      (20.1)%
  Goodwill                                            47,083      48,478      (1,395)       (2.9)%
  Other assets                                         4,187       1,871       2,316       123.8 %
                                                -------------  ----------   ----------   ---------
  
               Total assets                   $      287,713     289,580      (1,867)       (0.6)%
                                                =============  ==========   ==========   =========
  
  Current liabilities
       Current maturities of long-term debt   $        1,483       2,488      (1,005)      (40.4)%
       Accounts payable                               24,327      27,371      (3,044)      (11.1)%
       Accrued expenses                               18,905      17,153       1,752        10.2 %
       Income taxes payable                                0       1,268      (1,268)        0.0 %
                                                -------------  ----------   ----------   ---------
               Total current liabilities              44,715      48,280      (3,565)       (7.4)%
  
  Long-term debt                                     107,001     109,168      (2,167)       (2.0)%
  
  Deferred income taxes                               16,932      10,330       6,602        63.9 %
                                                -------------  ----------   ----------   ---------
               Total liabilities                     168,648     167,778         870         0.5 %
  
  Shareholders' equity                               119,065     121,802      (2,737)       (2.2)%
                                                -------------  ----------   ----------   ---------
  
               Total liabilities and
               shareholders' equity           $      287,713     289,580      (1,867)       (0.6)%
                                                =============  ==========   ==========   =========
  
  Shares outstanding                                  11,320      11,221          99         0.9 %
                                                =============  ==========   ==========   =========
  CULP, INC.
                            FINANCIAL INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
            FOR THE TWELVE MONTHS ENDED APRIL 28, 2002 AND APRIL 29, 2001
  
                               (Amounts in Thousands)
  TWELVE MONTHS ENDED
                                                                          --------------------------
                                                                                   Amounts
                                                                          --------------------------
                                                                           April 28,     April 29,
                                                                             2002          2001
                                                                          ------------  ------------
  Cash flows from operating activities:
      Net loss                                                         $       (3,440)       (8,311)
      Adjustments to reconcile net loss to net cash
         provided by operating activities:
              Depreciation                                                     17,274        19,391
              Amortization of intangible and other assets                       1,575         1,591
              Amortization of deferred compensation                               144           360
              Provision for deferred income taxes                              (1,452)       (5,394)
              Restructuring expense                                            10,368         5,625
              Changes in assets and liabilities:
                  Accounts receivable                                          14,483        17,374
                  Inventories                                                   2,098        14,474
                  Other current assets                                          2,504           827
                  Other assets                                                   (311)          171
                  Accounts payable                                                998        (4,530)
                  Accrued expenses                                               (796)       (6,767)
                  Income taxes payable                                         (1,268)        1,268
                                                                          ------------  ------------
                        Net cash provided by operating activities              42,177        36,079
                                                                          ------------  ------------
  Cash flows from investing activities:
      Capital expenditures                                                     (4,729)       (8,050)
      Sales of investments related to deferred compensation plan                    0         4,547
                                                                          ------------  ------------
                        Net cash used in investing activities                  (4,729)       (3,503)
                                                                          ------------  ------------
  Cash flows from financing activities:
      Proceeds from issuance of long-term debt                                      0           564
      Principal payments on long-term debt                                     (3,172)      (26,394)
      Change in accounts payable-capital expenditures                          (4,042)       (5,386)
      Dividends paid                                                                0        (1,177)
      Proceeds from common stock issued                                           552            17
                                                                          --------------------------
                        Net cash used in financing activities                  (6,662)      (32,376)
                                                                          ------------  ------------
  
  Increase in cash and cash investments                                        30,786           200
  
  Cash and cash investments at beginning of period                              1,207         1,007
                                                                          ------------  ------------
  
  Cash and cash investments at end of period                          $        31,993         1,207
                                                                          ============  ============
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL ANALYSIS
                                   APRIL 28, 2002
  FISCAL 01                           FISCAL 02
                                           -------------   ------------------------------------------------------   --------------
                                                Q4              Q1           Q2            Q3            Q4            LTM (3)
                                           -------------   ------------------------------------------------------   --------------
  INVENTORIES
         Inventory turns                            5.4             5.1           5.4           5.1          5.8
  
  RECEIVABLES
         Days sales in receivables                   52              51            47            43           36
         Percent current & less than 30
           days past due                          95.5%           91.9%         92.7%         96.0%        98.7%
  
  WORKING CAPITAL
         Current ratio                              2.6             2.8           2.8           3.2          3.3
         Working capital turnover (2)               4.0             4.1           4.1           4.2          4.5
         Operating working capital (2)          $90,475         $86,586       $84,346       $84,233      $76,938
  
  PROPERTY, PLANT & EQUIPMENT
         Depreciation rate                         7.4%            7.2%          7.1%          7.1%         7.3%
         Percent property, plant &
           equipment are depreciated              54.9%           56.2%         58.1%         59.0%        59.8%
         Capital expenditures                    $8,050 (1)      $1,602          $686        $1,105       $1,336
  
  PROFITABILITY
         Return on average total capital (6)       4.8%          (0.1%)          3.9%          2.4%         9.5%             3.8%
         Return on average equity (6)              4.7%          (4.5%)          3.2%          0.7%        14.0%             3.3%
         Net income (loss) per share            ($0.13)         ($0.26)         $0.08         $0.02      ($0.14)          ($0.31)
         Net income (loss) per share  (diluted) ($0.13)         ($0.26)         $0.08         $0.02      ($0.14)          ($0.31)
         Net income (loss) per share, excluding
           restructuring and related charges,
           (diluted) (5)                         $0.13          ($0.12)         $0.09         $0.02        $0.36            $0.35
  
  LEVERAGE
         Total liabilities/equity               137.7%          136.6%         136.8%        129.6%       141.6%
         Funded debt/equity                      91.7%           93.1%          92.3%         91.7%        91.1%
         Funded debt/capital employed            47.8%           48.2%          48.0%         47.8%        47.7%
         Funded debt                          $111,656        $110,652       $110,583      $110,087     $108,484
         Funded debt/EBITDA (LTM) (4)             4.23            4.26           4.26          3.64         3.29
  
  OTHER
         Book value per share                   $10.85          $10.59         $10.68        $10.62       $10.52
         Employees at quarter end                3,127           3,018          3,018         3,015        3,010
         Sales per employee (annualized)      $122,000        $113,000       $128,000      $120,523     $143,930
         Capital employed                     $233,458        $229,461       $230,421      $230,999     $227,549
         Effective income tax rate               33.1%           34.0%          34.0%         34.0%        52.4%
         EBITDA (4)                            $10,363          $4,731         $8,315        $6,862      $13,068          $32,976
         EBITDA/net sales (4)                    10.3%            5.5%           8.6%          7.6%        12.1%             8.6%
  
  (1) Expenditures for entire year
  (2) Working capital for this calculation is accounts receivable, inventories and
      accounts payable.
  (3) LTM represents "Latest Twelve Months"
  (4) EBITDA  includes  earnings  before  interest,  income  taxes,  depreciation,
      amortization, all restructuring and related  charges  and  certain  non-cash
      charges, as defined by the company's credit agreement.
  (5) Excludes restructuring and related charges of $12.2 million ($7.4 million or
      $.66 per share diluted, after taxes) for the last twelve months.
  (6) Excludes restructuring and related charges
  CULP, INC. FINANCIAL INFORMATION RELEASE
                               SALES BY PRODUCT GROUP
   FOR THE THREE MONTHS AND TWELVE MONTHS ENDED APRIL 28, 2002 AND APRIL 29, 2001
                               (Amounts in thousands)
  THREE MONTHS ENDED
                                   ------------------------------------------------------------
                                         Amounts                        Percent of Total Sales
                                   --------------------                 -----------------------
                                   April 28,   April 29,    % Over
   Product Group                      2002       2001        (Under)      2002        2001
  ------------------------------   ---------  ---------   ------------  ----------   ----------
  Upholstery Fabrics
      Culp Decorative Fabrics   $    42,973     41,046        4.7 %       39.6 %       40.6 %
      Culp Velvets/Prints            34,594     31,327       10.4 %       31.9 %       31.0 %
      Culp Yarn                       1,494      2,417      (38.2)%        1.4 %        2.4 %
                                   ---------  ---------   ------------  ----------   ----------
                                     79,061     74,790        5.7 %       72.9 %       74.0 %
  
  Mattress Ticking
      Culp Home Fashions             29,336     26,281       11.6 %       27.1 %       26.0 %
                                   ---------  ---------   ------------  ----------   ----------
  
                              * $   108,397    101,071        7.2 %      100.0 %      100.0 %
                                   =========  =========   ============  ==========   ==========
  
                                                       TWELVE MONTHS ENDED
                                   ------------------------------------------------------------
                                         Amounts                        Percent of Total Sales
                                   --------------------                 -----------------------
                                   April 28,   April 29,    % Over
  Product Group                      2002       2001        (Under)        2002        2001
  ------------------------------   ---------  ---------   ------------  ----------   ----------
  Upholstery Fabrics
      Culp Decorative Fabrics   $   152,505    170,326      (10.5)%        39.9 %      41.6 %
      Culp Velvets/Prints           119,119    122,105       (2.4)%        31.1 %      29.8 %
      Culp Yarn                       5,306     12,581      (57.8)%         1.4 %       3.1 %
                                   ---------  ---------   ------------  ----------   ----------
                                    276,930    305,012       (9.2)%        72.5 %      74.4 %
  
  Mattress Ticking
      Culp Home Fashions            104,948    104,798        0.1 %        27.5 %      25.6 %
                                   ---------  ---------   ------------  ----------   ----------
  
                              * $   381,878    409,810       (6.8)%       100.0 %     100.0 %
                                   =========  =========   ============  ==========   ==========
  * U.S.  sales were $94,760 and $85,314 for the fourth quarter of fiscal 2002 and
  fiscal 2001,  respectively;  and $ 328,377 and $331,986 for the twelve months of
  fiscal 2002 and 2001,  respectively.  The percentage  increase in U.S. sales was
  11.1% for the fourth quarter and a decrease of 1.1% for the twelve months.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                       INTERNATIONAL SALES BY GEOGRAPHIC AREA
   FOR THE THREE MONTHS AND TWELVE MONTHS ENDED APRIL 28, 2002 AND APRIL 29, 2001
                               (Amounts in thousands)
  THREE MONTHS ENDED
                                  -----------------------------------------------------------------
                                          Amounts                          Percent of Total Sales
                                  -------------------------                ------------------------
                                   April 28,    April 29,      % Over
       Geographic Area               2002          2001       (Under)          2002         2001
  ---------------------------     ------------  -----------  -----------   ----------    ----------
  North America (Excluding USA)  $      9,010        7,872     14.5 %         66.1 %       50.0 %
  Europe                                  176        1,334    (86.8)%          1.3 %        8.5 %
  Middle East                           1,422        3,375    (57.9)%         10.4 %       21.4 %
  Far East & Asia                       2,289        2,394     (4.4)%         16.8 %       15.2 %
  South America                           411          296     38.9 %          3.0 %        1.9 %
  All other areas                         329          486    (32.3)%          2.4 %        3.1 %
                                  ------------  -----------  -----------   ----------    ----------
  
                                 $     13,637       15,757    (13.5)%        100.0 %      100.0 %
                                  ============  ===========  ===========   ==========    ==========
  
                                                        TWELVE MONTHS ENDED
                                  -----------------------------------------------------------------
                                          Amounts                          Percent of Total Sales
                                  -------------------------                ------------------------
                                   April 28,    April 29,      % Over
       Geographic Area               2002          2001       (Under)          2002         2001
  ---------------------------     ------------  -----------  -----------   ----------    ----------
  North America (Excluding USA)  $     32,033       34,049     (5.9) %        60.0 %       43.8 %
  Europe                                2,291        6,262    (63.4) %         4.3 %        8.0 %
  Middle East                           6,226       17,831    (65.1) %        11.6 %       22.9 %
  Far East & Asia                      10,703       15,497    (30.9) %        20.0 %       19.9 %
  South America                           902        1,028    (12.3) %         1.7 %        1.3 %
  All other areas                       1,346        3,157    (57.4) %         2.5 %        4.1 %
                                  ------------  -----------  -----------   ----------    ----------
  
                                 $     53,501       77,824    (31.3) %       100.0 %      100.0 %
                                  ============  ===========  ===========   ==========    ==========
  International  sales,  and the  percentage of total sales,  for each of the last
  three fiscal years follows:  fiscal  2000-$111,104  (23%);  fiscal  2001-$77,824
  (19%);fiscal  2002 $53,501  (14%).  International  sales for the fourth  quarter
  represented 13% and 16% for fiscal 2002 and 2001, respectively.
  CULP, INC.
                  PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
            FOR THE THREE MONTHS ENDED APRIL 28, 2002 AND APRIL 29, 2001
                  (Amounts in Thousands, Except for Per Share Data)
  THREE MONTHS ENDED (UNAUDITED)
                                 -------------------------------------------------------------------------------
                                                                           April 28,                  April 29,
                              As Reported                                    2002                       2001
                               April 28,    % of     Reclassification    Proforma Net    % of        Proforma Net     % of     % Over
                                 2002     Net Sales  & Adjustments    of Restructuring  Net Sales  of Restructuring  Net Sales (Under)
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
  Net sales                     $ 108,397  100.0%                          108,397        100.0%      101,071         100.0%      7.2%
  Cost of sales                    85,379   78.8%           (619) (2)       84,760         78.2%       84,853          84.0% (6) -0.1%
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
        Gross profit               23,018   21.2%           (619)           23,637         21.8%       16,218          16.0%     45.7%
  
  Selling, general and
    administrative expenses        14,236   13.1%         (1,244)           12,992         12.0%       10,496          10.4%     23.8%
  Bad debt expense                                         1,244             1,244          1.5%          121           0.1%    928.1%
  Restructuring expense             9,065    8.4%         (9,065) (3)            0          0.0%            0           0.0% (6)  0.0%
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
        Income  (loss) from
           operations                (283)  -0.3%         (9,684)            9,401          8.7%        5,601           5.5%     67.8%
  
  Interest expense                  2,056    1.9%              0             2,056          1.9%        2,284           2.3%    -10.0%
  Interest income                     (77)  -0.1%              0               (77)        -0.1%           (6)          0.0%   1183.3%
  Other expense (income), net       1,067    1.0%              0             1,067          1.0%        1,209           1.2%    -11.7%
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
        Income (loss) before
           income taxes            (3,329)  -3.1%         (9,684)            6,355          5.9%        2,114           2.1%    200.6%
  
  Income taxes  (1)                (1,744)  52.4%         (3,905)            2,161         34.0% (4)      700          33.1%    208.8%
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
  
        Net income (loss)       $  (1,585)  -1.5%         (5,779)            4,194          3.9%        1,414           1.4%    196.6%
                                 =================   ================ ===========================  ================  ========= =======
  
  Net income (loss) per share      ($0.14)                ($0.51)            $0.37                      $0.13
  Net income (loss) per share,
     assuming dilution             ($0.14)                ($0.51)            $0.36                      $0.13
  Average shares outstanding       11,255                 11,255            11,255                     11,212
  Average shares outstanding,
     assuming dilution             11,255                 11,255            11,564 (5)                 11,276 (5)
  Notes:
  (1) Percent of sales column is  calculated as a % of income (loss) before income
      taxes.
  (2) The $619,000 represents  inventory  write-downs  incurred due to the exit of
      the wet printed flock upholstery fabric business.
  (3) The $9.1 million represents restructuring charges related to the exit of the
      wet printed flock upholstery  fabric business  as follows:  $1.4 million in
      plant  closing  costs,  and $7.6  million  in non-cash  write-downs  to  net
      realizable value of property, plant and equipment.
  (4) Pre-restructuring income tax rate is 34%
  (5) Incremental  shares of 309,000  for fiscal  2002 and 64,000 for fiscal 2001
      included in fully diluted calculation
  (6) $1.1  million  of  Culp  Decorative  Fabrics  (CDF)  and  Culp  Yarn  (CYN)
      restructuring  related  charges are excluded from the cost of sales total;
      and, $3.1  million  in CDF and  CYN restructuring  charges  are  excluded to
      arrive at the proforma amounts.
  CULP, INC.
                  PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                        FOR THE TWELVE MONTHS ENDED APRIL 28,
                               2002 AND APRIL 29, 2001
                    (Amounts in Thousands, Except Per Share Data)
  TWELVE MONTHS ENDED
                                 -------------------------------------------------------------------------------
                                                                           April 28,                   April 29,
                              As Reported                                    2002                        2001
                               April 28,    % of     Reclassification    Proforma Net    % of        Proforma Net     % of     % Over
                                 2002     Net Sales  & Adjustments    of Restructuring  Net Sales  of Restructuring  Net Sales (Under)
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
  Net sales                     $  381,878  100.0%                           381,878     100.0%        409,810       100.0%      -6.8%
  Cost of sales                    319,021   83.5%        (1,825) (2)        317,196      83.1%        352,018        85.9% (6)  -9.9%
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
        Gross profit                62,857   16.5%        (1,825)             64,682      16.9%         57,792        14.1%      11.9%
  
  Selling, general and
    administrative expenses         48,059   12.6%        (4,172)             43,887      11.5%         50,057        12.2%     -12.3%
  Bad debt expense                                         4,172               4,172       1.3%            309         0.1%    1250.2%
  Restructuring expense             10,368    2.7%       (10,368) (3)              0       0.0%              0         0.0% (6)   0.0%
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
        Income  (loss) from
           operations                4,430    1.2%       (12,193)             16,623       4.4%          7,426         1.8%     123.8%
  
  Interest expense                   7,907    2.1%             0               7,907       2.1%          9,114         2.2%     -13.2%
  Interest income                     (176)   0.0%             0                (176)      0.0%            (46)        0.0%     282.6%
  Other expense (income), net        2,839    0.7%             0               2,839       0.7%          3,336         0.8%     -14.9%
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
        Income (loss) before
           income taxes             (6,140)  -1.6%       (12,193)              6,053       1.6%         (4,978)       -1.2%    -221.6%
  
  Income taxes  (1)                 (2,700)  44.0%        (4,758)              2,058      34.0% (4)     (1,643)       33.0%    -225.3%
                                 -----------------   ---------------- ---------------------------  ----------------  --------- -------
  
        Net income (loss)       $   (3,440)  -0.9%        (7,435)              3,995       1.0%         (3,335)       -0.8%    -219.8%
                                 =================   ================ ===========================  ================  ========= =======
  
  Net income (loss) per share       ($0.31)               ($0.66)              $0.36                    ($0.30)
  Net income (loss) per share,
     assuming dilution              ($0.31)               ($0.66)              $0.35                    ($0.30)
  Average shares outstanding        11,230                11,230              11,230                    11,210
  Average shares outstanding,
     assuming dilution              11,230                11,230              11,457 (5)                11,210
  Notes:
  (1) Percent of sales column is  calculated as a % of income (loss) before income
      taxes.
  (2) The $1.8  million in  restructuring  related  charges are as  follows:  $1.2
      million in CDF and CYN charges; and $619,000 in wet printed flock charges.
  (3) The $10.4  million in  restructuring  charges are as follows:  $1.3 million,
      relating  to CDF and CYN; and  $9.1  million relating  to wet printed  flock
      business.
  (4) Pre-restructuring income tax rate is 34%
  (5) Incremental shares of 227,000 included in fully diluted calculation
  (6) $1.8 million of CDF and CYN restructuring  related charges are excluded from
      the cost of sales total; and $5.6 million in CDF and CYN  restructuring
      charges are excluded to arrive at the proforma amounts.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
   for the three and twelve month periods ended April 28, 2002 and April 29, 2001
  
  INCOME STATEMENT COMMENTS
  
       GENERAL  - For the  fourth  quarter,  net  sales  increased  7.2% to  108.4
  million;  and the company  reported  net  income,  excluding  restructuring  and
  related charges, of $4.2 million, or $0.36 per share diluted,  versus net income
  of $1.4 million,  or $0.13 per share  diluted,  in the fourth  quarter of fiscal
  2001, also excluding  restructuring  and related  charges.  For fiscal 2002, net
  sales decreased 6.8% to $381.9 million;  and the company  reported net income of
  $4.0 million,  or $0.35 per share diluted,  excluding  restructuring and related
  charges,  versus a net loss of $3.3 million,  or $0.30 per share diluted, a year
  ago, also excluding  restructuring  and related  charges.  As described below in
  "SG&A  EXPENSES," a  significant  factor  affecting  the fourth  quarter and the
  entire 2002 fiscal year was bad debt expense of $1.2  million and $4.2  million,
  respectively ($0.07 and $0.25 per share,  respectively,  on an after-tax basis).
  This  compares  with bad debt  expense of $121,000  and  $309,000 for the fourth
  quarter and fiscal year of 2001,  respectively.  After restructuring and related
  charges,  the company reported a net loss for the fourth quarter of 2002 of $1.6
  million, or $0.14 per share diluted, versus a net loss of $1.4 million, or $0.13
  per share  diluted,  for the fourth  quarter of 2001.  After  restructuring  and
  related charges,  the company reported a net loss of $3.4 million,  or $0.31 per
  share  diluted,  for 2002,  and a net loss of $8.3  million,  or $0.74 per share
  diluted, for 2001.
  
       PROFORMA  CONSOLIDATED  STATEMENTS  OF  INCOME  (LOSS) -- The  company  has
  included,  within this financial information release, proforma income statements
  for the fourth  quarter and fiscal  year of 2002 which  reconcile  the  reported
  income  statements for those periods with proforma results excluding the effects
  of the  restructuring  and related charges incurred by the company during fiscal
  2002. Additionally, the proforma results for 2002 are compared with the proforma
  results of the fourth quarter and fiscal year 2001, excluding  restructuring and
  related charges. (See PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS) on pages
  7 and 8 of this financial information release.)
  
       The company's  long-term,  strategic plan encompasses  several  competitive
  initiatives:
  
       Broad Product  Offering - continuing to market one of the broadest  product
       lines in  upholstery  fabrics and mattress  ticking.  Through its extensive
       manufacturing  capabilities,  the company competes in most major categories
       except leather;
  
       Diverse  Customer Base - maintaining a diverse  customer  base. The company
       has long-standing  relationships  with the major residential  furniture and
       bedding  manufacturers.  Ownership  of  resources  in the home  furnishings
       industry  is  becoming  increasingly  concentrated,  and  the  company  has
       successfully  been able to  capitalize  on its size and product  breadth to
       supply more of the needs of existing customers.
  
       Design  Innovation  -  supplying  fabrics  that are  fashionable  and match
       current consumer preferences.  The company's principal design resources are
       consolidated  in a  single  facility  that has  advanced  computer-assisted
       design  systems and promotes  sharing of innovative  designs across product
       lines.  Culp encourages  active  customer  involvement in the entire design
       process; and
  
       Vertical  Integration - operating as a vertically  integrated  manufacturer
       and  taking  advantage  of  economies,  quality,  supply  availability  and
       efficiencies  that can be gained by producing  the raw material  components
       that are used in the manufacture of its products.
  
       EXIT OF WET PRINTED FLOCK PRODUCT LINE - The company  previously  announced
  during the fourth quarter that it was evaluating strategic  alternatives for the
  capital  invested in  manufacturing  and marketing wet printed flock  upholstery
  fabrics. Management took this action because of the significant decline in sales
  and  profitability  of wet printed  flocks in recent  years,  a decline  related
  principally to the strength of the U.S. dollar relative to foreign currencies as
  well as a shift in consumer  preferences to other styles of upholstery  fabrics.
  In  April  2002  management  approved  a plan to  exit  the  wet  printed  flock
  upholstery fabric business and is actively seeking to sell the assets related to
  this  product  line.  The exit plan  involved  closing a printing  facility  and
  flocking operations within the Culp  Velvets/Prints  division and a reduction in
  related selling and administrative expenses. The company also recognized certain
  inventory  write-downs  related to this product line.  The total charge from the
  exit plan and inventory write-down was $9.7 million,  approximately $8.2 million
  of which  represented  non-cash items.  The company recorded the total charge in
  the fourth  quarter of fiscal 2002. Of this total,  $9.1 million was recorded in
  the line item  "Restructuring  expense"  and $600,000  related to the  inventory
  write-downs  was recorded in "Cost of sales." The company  estimates  the annual
  after-tax  carrying costs to maintain the  facilities  until the assets are sold
  will be approximately $200,000, or $0.02 per share. During the fiscal year ended
  April 28, 2002, sales of wet printed flocks contributed $17.1 million,  or 4.5%,
  of the company's  total sales and resulted in an operating loss of $2.1 million.
  The  company  estimates  that  the  net  loss on an  after-tax  basis  would  be
  approximately $0.12 per share.
  
       OTHER RESTRUCTURING ACTIONS - During fiscal 2001 and continuing into fiscal
  2002, the company  undertook a  restructuring  plan intended to lower  operating
  expenses,  increase manufacturing  utilization,  raise productivity and position
  the  company  to  operate  profitably  on a 20% lower  level of sales.  The plan
  involved the consolidation of certain fabric  manufacturing  capacity within the
  Culp Decorative  Fabrics (CDF) division,  closing one of the company's four yarn
  manufacturing  plants  within  Culp Yarn,  an  extensive  reduction  in selling,
  general and administrative expenses and a comprehensive SKU reduction initiative
  related to  finished  goods and raw  materials  in CDF.  Additionally,  the plan
  included consolidation of the CDF design effort into the company's Design Center
  and the  implementation of a common set of raw material  components for CDF. The
  company also  recognized  certain  inventory  write-downs  related to the closed
  facilities  as  part of this  initiative.  While  the  physical  relocation  and
  movement of machinery and equipment  involved in the restructuring was completed
  by the end of the  second  quarter  and the  related  fixed  manufacturing  cost
  savings  achieved,  the  company  still  has much  improvement  to make to reach
  targeted productivity and variance levels in the CDF division.  The total charge
  from the restructuring,  cost reduction and inventory write-down initiatives was
  $9.9  million,  about $3.6  million of which  represented  non-cash  items.  The
  company  recognized  $7.4 million of  restructuring  and related  charges during
  fiscal  2001,  and $2.5  million  in the  first  nine  months  of  fiscal  2002.
  Restructuring  and related charges for fiscal 2002 were recorded as $1.3 million
  in the line item  "Restructuring  expense"  and $1.2 million in "Cost of sales."
  The costs reflected in "Cost of sales" are principally related to the relocation
  of manufacturing  equipment.  Due to the restructuring plan, the company has now
  realized  annualized  reductions of at least $14 million in fixed  manufacturing
  costs  and  SG&A  expenses.  Management  believes  the  company  now has a sound
  footprint  of  efficient,   world-class  facilities  utilizing  state-of-the-art
  equipment  that  position  Culp well to meet the  demands by  manufacturers  for
  shorter lead times, reliable delivery schedules and appealing designs.
  
       NET SALES - Compared with the year-earlier  period, the company's net sales
  increased  7.2% for the fourth  quarter of fiscal 2002.  This sales  performance
  represents  the first  quarterly  sales gain in over two years,  since the third
  quarter of fiscal 2000. For fiscal 2002 as a whole,  sales were $381.9  compared
  to $409.8 in fiscal 2001.
  
  Compared  with fiscal 2001,  upholstery  fabric sales for the fourth  quarter of
  fiscal  2002  increased  5.7% to $79.1  million,  and  decreased  9.2% to $276.9
  million for fiscal 2002 (See Sales by  Segment/Division on Page 5). Reflecting a
  reversal of the trends in the first three quarters,  domestic  upholstery fabric
  sales  increased by 10% to $69.0  million in the fourth  quarter of fiscal 2002.
  For fiscal year 2002,  domestic  upholstery  fabric  sales  decreased by 3.3% to
  $236.6 million.  The decrease related to a decline in sales to the external yarn
  market ($7.3  million),  where the company exited certain  businesses,  and to a
  decline in sales to the commercial furniture market ($4.5 million).  The company
  believes that it is improving its market share in the U.S. residential furniture
  market because of well-received fabric placements in the Culp Decorative Fabrics
  and Culp Velvets/Prints divisions.  International sales of upholstery fabric for
  the fourth  quarter of fiscal  2002 were  $10.1  million,  down 15.8% from $12.0
  million in the same quarter of the prior year. International sales of upholstery
  fabric for  fiscal  2002 were $40.3  million,  down 33.2% from $60.4  million in
  fiscal 2001.
  
  Compared  with fiscal 2001,  mattress  ticking  sales for the fourth  quarter of
  fiscal  2002  increased  11.6% to $29.3  million,  and  increased  .1% to $104.9
  million for fiscal 2002. Sales to U.S. bedding manufacturers  increased 14.6% to
  $25.8 million in the fourth  quarter of fiscal 2002, and increased 5.0% to $91.7
  million for fiscal 2002. The company believes that it is gaining market share in
  the U.S.  bedding  market as well.  International  ticking  sales for the fourth
  quarter of fiscal  2002 were $3.6  million,  down 6.1% from $3.8  million in the
  same  quarter of last year.  International  ticking  sales for fiscal  2002 were
  $13.2 million, down 24.5% from $17.5 million in fiscal 2001.
  
       GROSS PROFIT - Excluding the restructuring related charges recorded in cost
  of sales  during  2001 and 2002,  gross  profit  increased  45.7% for the fourth
  quarter of fiscal 2002 compared with the year earlier  period and increased as a
  percentage  of net  sales to 21.8%  from  16.0%.  This  significant  improvement
  reflects  solid  progress  in gross  profit  dollars  and margins in each of the
  company's  four  divisions.  The key factors behind these gains were: (1) a more
  profitable  sales  mix  across  the  divisions;  (2)  the  benefit  of the  2001
  restructuring  actions taken in Culp Decorative Fabrics (CDF) and Culp Yarn; and
  (3) better  sales volume and the related  higher  capacity  utilization  in each
  division.  For fiscal 2002 as a whole,  gross  profit,  excluding  restructuring
  related  charges,  increased 11.9% compared with fiscal 2001, and increased as a
  percentage of net sales to 16.9% from 14.1%.  This improvement  reflected strong
  gross  profit  dollar  and  margin  growth  in  the  Culp  Home  Fashions,  Culp
  Velvets/Prints  and Culp Yarn divisions.  Offsetting  these gains somewhat was a
  decrease in gross profit dollars and margin in Culp  Decorative  Fabrics,  which
  occurred in the first half of fiscal 2002.  The fourth quarter  represented  the
  first  year-over-year  positive  comparison in sales and gross profit for CDF in
  nine quarters. The company is optimistic that gross profit margins in CDF can be
  improved  significantly over the next one to two years. In order to achieve this
  margin improvement, management expects the key drivers will be (1) improving the
  profitability of the current sales mix; (2) improving manufacturing performance,
  in terms of  productivity  and  inventory  obsolescence;  and (3)  modest  sales
  growth.
  
       SG&A EXPENSES - SG&A expenses were $14.2 million for the fourth quarter and
  increased $3.6 million,  or 34.1%,  over the year earlier period.  This increase
  resulted  primarily  from  bad  debt  expense  of $1.2  million  and  management
  incentive  compensation expense of $1.8 million during the quarter.  Through the
  first nine months of fiscal 2002, the company had reported a net loss, after and
  before  restructuring  charges;  therefore  no incentive  compensation  had been
  earned or recorded.  Without  considering  bad debt and  incentive  compensation
  expense, SG&A expenses were $11.2, or 10.3% of net sales, for the fourth quarter
  of fiscal 2002, compared with $10.5 million, or 10.4% of net sales, for the same
  quarter of fiscal 2001.  SG&A  expenses  were $48.1 million for fiscal 2002 as a
  whole and decreased $2.3 million,  or 4.6%,  from fiscal 2001.  The  significant
  factors  affecting  the year to year  comparisons  were bad debt expense of $4.2
  million in fiscal 2002 versus $309,000 in fiscal 2001 and incentive compensation
  expense of $1.8  million in fiscal  2002  versus  $0.0 in fiscal  2001.  Without
  considering  these factors in both years,  SG&A expenses were $42.1 million,  or
  11.1% of net sales,  for fiscal 2002,  compared with $50.0 million,  or 12.2% of
  net sales,  for  fiscal  2001.  This  reflects a 15.8%  decrease  and  primarily
  resulted from the company's  decision to reduce SG&A expenses  significantly  as
  part of the 2001 restructuring plan.
  
       INTEREST  EXPENSE - Interest  expense for the fourth quarter declined 10.0%
  from $2.3  million to $2.1  million and for the fiscal year from $9.1 million to
  $7.9 million due to lower  borrowings  outstanding  and lower  average  interest
  rates over the course of the fiscal year.  Interest income  increased due to the
  significant build up in Cash and Cash Investments during the year.
  
       OTHER EXPENSE (INCOME), NET - Other expense (income) for the fourth quarter
  of fiscal 2002  totaled  $1.1  million  compared  with $1.2 million in the prior
  year. Goodwill  amortization of $1.4 million, or $0.07 per share, is included in
  Other Expense in fiscal 2002 and fiscal 2001.  With the adoption of SFAS No. 142
  in the first quarter of fiscal 2003, the company will no longer record  goodwill
  amortization.
  
       INCOME TAXES - The  effective  tax rate for fiscal 2002 was 44.0%  compared
  with 33.0% for the year-earlier  period.  The higher rate resulted from the 2002
  increased tax benefits related to the company's US loss, including restructuring
  and related  charges,  and to a lower  proportion of earnings from the company's
  Canadian  subsidiaries,  as  well  as the  recognition  in  2001  of  gain  from
  terminated  life  insurance  contracts.  The income tax rate for fiscal  2002 on
  income  before the  restructuring  and related  charges  was 34.0%.  The company
  expects the effective tax rate for fiscal 2003 to be approximately 37.0%.
  
       EBITDA - EBITDA for the fourth  quarter of fiscal 2002  increased  26.0% to
  $13.1 million  compared with $10.4 million for the fourth  quarter of last year,
  and increased 25.0% to $33.0 million for fiscal 2002 compared with $26.4 million
  in  fiscal  2001.  EBITDA  includes  earnings  before  interest,  income  taxes,
  depreciation,  amortization,  all  restructuring and related charges and certain
  non-cash charges, as defined by the company's credit agreement.
  
  BALANCE SHEET COMMENTS
  
       CASH AND CASH  INVESTMENTS - Cash and cash investments as of April 28, 2002
  increased to $32.0 million from $1.2 million at fiscal year end, reflecting cash
  flow from  operations of $42.2 million for fiscal 2002,  which exceeded  capital
  expenditures of $4.7 million,  debt repayment of $3.2 million,  and reduction of
  accounts  payable  for  capital  expenditures  of $4.0  million.  Cash  and Cash
  Investments  increased  $21.6  million  during  the  fourth  quarter  due to the
  significant  increase in earnings,  a $4.0 million  income tax refund due to the
  five-year net operating  loss  carrybacks  allowable  under the Job Creation and
  Worker  Assistance  Act passed in March  2002,  continued  reduction  in working
  capital  requirements,  and only $1.3 million in capital  expenditures  and $1.6
  million in debt repayments.
  
       WORKING CAPITAL - Accounts  receivable as of April 28, 2002 decreased 25.0%
  from the  year-earlier  level,  due principally to the decline in  international
  sales with their related  longer credit terms,  and an increase in the number of
  customers  taking  the cash  discount  for  shorter  payment  terms.  Days sales
  outstanding  totaled 36 days at April 28, 2002  compared with 52 a year ago. The
  aging of accounts  receivable  was 98.7%  current and less than 30 days past due
  versus  95.5%  a year  ago.  Inventories  at the  close  of the  fourth  quarter
  decreased 3.5% from a year ago.  Inventory turns for the fourth quarter were 5.8
  versus 5.4 for the year-earlier period.  Operating working capital (comprised of
  accounts receivable,  inventory and accounts payable) was $76.9 million at April
  28, 2002, down from $90.5 million a year ago.
  
       OTHER  CURRENT  ASSETS  - Other  current  assets  increased  70.7% to $13.4
  million, primarily as a result of an increase in refundable income taxes of $1.7
  million and the reclassification,  totaling $4.2 million, of deferred tax assets
  related to net operating loss carryforwards from non-current to current based on
  expected fiscal 2003 utilization.
  
       PROPERTY,  PLANT AND EQUIPMENT - Capital  spending for fiscal 2002 was $4.7
  million, compared with $8.1 million in the year-earlier period. Depreciation for
  fiscal  2002  totaled  $17.3   million.   The  company  is  estimating   capital
  expenditures of $8.0 million for fiscal 2003 and depreciation  expense of $14 to
  $15 million for the year.
  
       GOODWILL - Goodwill at April 28, 2002 was $47.1  million.  The company will
  adopt SFAS No.142 during its first fiscal quarter of fiscal 2003. As a result of
  this adoption,  the company is expecting to record a special,  non-cash goodwill
  impairment  charge in the range of $23 million to $27  million (on an  after-tax
  basis)  related to the  goodwill  associated  with its Culp  Decorative  Fabrics
  division,  which  amounts  to  $42.2  million.  This  charge  will be  reflected
  separately from income from continuing  operations as a cumulative  effect of an
  accounting change and will be presented net of related income tax expense. There
  will be no impact on the  company's  compliance  with the  covenants in its loan
  agreement as a result of this change.
  
       OTHER  ASSETS - Other assets  increased  by $2.3 million  during the fiscal
  year to $4.2 million at April 28, 2002. This increase is principally  related to
  the recording of Assets Held For Sale in conjunction with the exiting of the wet
  printed flock upholstery fabric business.
  
       LONG-TERM  DEBT - The company has  reduced  funded debt by $3.2  million or
  2.9% from the end of the last fiscal  year.  Funded debt equals  long-term  debt
  plus  current  maturities.  Funded  debt was $108.5  million at April 28,  2002,
  compared with $111.7  million at the end of fiscal 2001.  The  company's  funded
  debt-to-capital  ratio was 47.7% at April 28, 2002,  its lowest level since July
  1997.  During fiscal 2001,  the company  amended its credit  facility to include
  terms that restrict the payment of cash dividends and share  repurchases at this
  time,  limit capital  expenditures,  increase the interest rate on its revolving
  credit facility and increase the letter of credit fees on its industrial revenue
  bonds (IRBs). This amended credit facility provides for a loan commitment of $10
  million,  and  expires  on August  22,  2002.  The  company  had no  outstanding
  borrowings  under the  facility  at the end of fiscal  2002.  The company was in
  compliance with all convenants  contained in its loan agreements as of April 28,
  2002.
  
  During  February  2002,  the company  amended its $75 million term loan with its
  lenders to revise  certain  financial  covenants  so that a goodwill  impairment
  charge, if any, would not inadvertently cause a loan covenant violation due only
  to changes in financial  accounting  standards.  In exchange for these  covenant
  changes,  the company agreed to increase the interest rate paid on the term loan
  by 100 basis points.  Therefore,  the  significant  goodwill  impairment  charge
  expected to be  recorded in the first  quarter of fiscal 2003 will not cause any
  violation of its loan covenants with its lenders.
  
  In addition,  reflecting the company's  improved financial results and financial
  position,  the company has received a loan  commitment  from its principal  bank
  lender that  provides,  among other things,  for (1) a two year credit  facility
  starting at $47 million  and  reducing to $27 million as certain IRB  repayments
  are made,  (2)  release  of the  collateral  securing  the  facility,  (3) lower
  interest  rates  based  upon  a  pricing  matrix,  and  (4)  improved  financial
  covenants.  In exchange for these  provisions,  the company  would agree,  among
  other  things,  to repay  approximately  $20  million of its IRB debt by October
  2002,  and pay a credit  facility  fee.  The  company  expects to close this new
  credit facility during the first quarter.