content: -------------------------------------------------------------------------------
  
  
                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549
  
  
                                     ---------
  
                                     Form 8-K
  
                                  CURRENT REPORT
  
                 Pursuant to Section 13 or 15(d) of the Securities
                               Exchange Act of 1934
  
                                   -------------
  
         Date of Report (Date of earliest event reported) November 25, 2002
  
                                     CULP, INC.
  
               (Exact name of registrant as specified in its charter)
  
  
           North Carolina                  0-12781                56-1001967
  
  (State or other jurisdiction of   (Commission File No.)       (IRS Employer
           incorporation)                                    Identification No.)
  
  
  
                               101 South Main Street
                         High Point, North Carolina  27260
                     (Address of principal executive offices)
                                  (336) 889-5161
               (Registrant's telephone number, including area code)
  
  
  
  
  
           (Former name or former address, if changed since last report)
  
  
  
  
  
  -------------------------------------------------------------------------------
  
  
  
  <PAGE>
  
  Item 5. Other Events
  
  See  attached  Press  Release (4 pages) and  Financial  Information  Release (13
  pages),  both dated November 25, 2002, related to the fiscal 2003 second quarter
  ended October 27, 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 (Section 27A of
  the Securities Act of 1933 and Section 27A of the Securities and Exchange Act of
  1934).  Such  statements  are  inherently  subject  to risks and  uncertainties.
  Forward-looking statements are statements that include projections, expectations
  or beliefs  about future  events of results or otherwise  are not  statements of
  historical  fact.  Such  statements  are often but not always  characterized  by
  qualifying words such as "expect,"  "believe,"  "estimate," "plan" and "project"
  and their  derivatives,  and  include but are not  limited to  statements  about
  expectations for the company's future sales, gross profit margins, SG&A or other
  expenses,  and earnings,  as well as any statements regarding the company's view
  of estimates of the  company's  future  results by analysts.  Factors that could
  influence the matters discussed in such statements  include the level of housing
  starts and sales of existing homes,  consumer  confidence,  trends in disposable
  income, and general economic conditions.  Decreases in these economic indicators
  could have a negative effect on the company's business and prospects.  Likewise,
  increases in interest rates,  particularly home mortgage rates, and increases in
  consumer  debt or the  general  rate of  inflation,  could  affect  the  company
  adversely.  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.  Finally,  unanticipated  delays or costs in  executing  restructuring
  actions could cause the cumulative  effect of  restructuring  actions to fail to
  meet the objectives set forth by management. Other factors that could affect the
  matters  discussed in forward  looking  statements are included in the company's
  periodic reports filed with the Securities and Exchange Commission.
  
  
  
  
                                                        SIGNATURE
  
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
  
                                          CULP, INC.
                                          (Registrant)
  
  
                                 By:       Franklin N. Saxon
                                          -----------------------------
                                           Executive Vice President and
                                           Chief Financial Officer
  
  
  
  
  
  Dated:  November 25, 2002
  
  
  <PAGE>
  
                                    NEWS RELEASE
  
  Investor Contact:  Kathy J. Hardy         Media Contact:  Kenneth M. Ludwig
                     Corporate Secretary                    Senior Vice President,
                     336-888-6209                           Human Resources
                                                            336-889-5161
  
  FOR IMMEDIATE RELEASE
  
                       CULP REPORTS SECOND QUARTER 2003 RESULTS
                                ----------------------
                          IMPROVED EARNINGS REFLECT BENEFITS
                 OF RESTRUCTURING ACTIONS AND BALANCE SHEET MANAGEMENT
  
  HIGH POINT, N. C. (November 25, 2002) - Culp,  Inc.  (NYSE:  CFI) today reported
  financial  and  operating  results for the second  quarter and six months  ended
  October 27, 2002. The quarter was highlighted by:
  
  o    Diluted  earnings per share of $0.19 (excluding  restructuring  and related
       charges)
  o    Improved  gross profit  margin of 17.8%  (excluding  restructuring  related
       charges)
  o    Chattanooga restructuring substantially complete at the end of the quarter
  o    Cash  position  built to $35.0 million from $25.1 million at the end of the
       first quarter
  
       For the three months ended  October 27, 2002,  net sales were $83.6 million
  compared  with  $96.4  million a year ago.  The  company  reported  net  income,
  excluding restructuring and related charges, of $2.3 million, or $0.19 per share
  diluted,  versus net income of $1.2 million,  or $0.11 per share diluted, in the
  second quarter of fiscal 2002, excluding  restructuring and related charges, and
  goodwill  amortization.  The financial  results for the second quarter include a
  total of $14.5  million  in  restructuring  and  related  charges,  all of which
  reflect previously announced restructuring initiatives.  Including restructuring
  and related charges,  the company reported a net loss of $6.6 million,  or $0.57
  per share diluted, for the second quarter of fiscal 2003.
  
       For the six months ended October 27, 2002,  the company  reported net sales
  of $169.5 million,  compared with $182.9 million for the same period a year ago.
  Excluding  restructuring  and  related  charges  and the  cumulative  effect  of
  accounting  change,  net income for the first six months of fiscal 2003 was $3.2
  million,  or $0.27 per share  diluted,  compared with net income of $46,000,  or
  $0.00 per share  diluted,  excluding  restructuring  and  related  charges,  and
  goodwill amortization for the prior-year period. Including restructuring charges
  and the cumulative effect of accounting  change, the company reported a net loss
  for the first six  months of fiscal  2003 of $29.8  million,  or $2.61 per share
  diluted.
  
  
  
  <PAGE>
  
  
       As previously announced,  due to the adoption of a new accounting standard,
  "Goodwill and Other Intangible Assets," the company recorded a non-cash goodwill
  impairment  charge,  net of income taxes,  of $24.2 million,  or $2.11 per share
  diluted,  in the first quarter of 2003 related to the goodwill  associated  with
  its  Culp  Decorative  Fabrics  ("CDF")  division.   The  charge,   recorded  as
  "cumulative  effect of accounting  change," has no effect on operating income or
  cash flow from operations and does not affect the company's  compliance with the
  terms of its lending agreements.
  
       "In an especially  challenging business environment,  these results clearly
  reflect the benefits of the actions we have taken to improve the  efficiency  of
  our operations,  reduce costs and strengthen our balance sheet," remarked Robert
  G. Culp,  III, chief  executive  officer of Culp,  Inc. "Our top line growth was
  affected by the overall  industry  weakness in demand for furniture and bedding.
  In addition,  the 13.3% decline in sales is partly attributable to our strategic
  initiatives to improve the overall profitability of our sales mix by reducing or
  eliminating less profitable products. As previously  announced,  we discontinued
  our  unprofitable  wet printed flock  business at the end of fiscal 2002.  Since
  that time we have also  discontinued a significant  number of the finished goods
  stock keeping units, or SKUs,  within CDF in our continued  efforts to eliminate
  products that are not generating  acceptable  profits.  However, in spite of the
  lower sales volume and the operational disruption resulting from the Chattanooga
  restructuring,  we still  reported a meaningful  improvement  in  profitability.
  Gross profit margin was 17.8% in the second fiscal  quarter  compared with 16.3%
  for the same period a year ago,  excluding the restructuring  related charges in
  each quarter.  Our strategic focus  continues to be on effectively  managing the
  aspects of our  business  that we can  control,  and we believe  our  ability to
  improve  profits,   excluding   restructuring  and  related  charges,   in  this
  environment demonstrates our strong execution.
  
       "Our solid  performance  with respect to managing  our working  capital and
  strengthening  our balance  sheet  further  extended the progress from the first
  quarter of this year," said Culp.  "Cash flow from  operations was $17.8 million
  for the first six months of 2003,  and we have  reduced our funded debt by $12.0
  million from the end of fiscal 2002. At the end of the second fiscal quarter, we
  had $35.0 million in cash and cash investments,  a significant  improvement over
  $8.6  million a year ago.  A key  objective  for 2003 is to  maintain  a strong,
  liquid balance sheet, and we will continue to focus on opportunities for further
  improvement.
  
       "Our  previously  announced  Chattanooga   restructuring  initiatives  were
  substantially  complete  at  the  end of  the  second  quarter.  We  closed  the
  manufacturing  operations  at  our  facility  in  Chattanooga,   Tennessee,  and
  successfully  transferred  these  operations  to  other  plants  well  ahead  of
  schedule.  This  restructuring  is projected to result in annual cost savings of
  $12 to $15 million.  We believe these actions will  significantly  improve gross
  margins while allowing us to continue to meet foreseeable  customer demand,  all
  on a substantially lower cost base."
  
       Looking ahead, Culp added, "We believe we have made meaningful  progress in
  managing our costs and improving our profitability.  However, like others in our
  industry,  our sales volume continues to be affected by the uncertainties in the
  economy  and  decline  in  overall  consumer   spending  for  home  furnishings.
  Additionally,  with the  elimination  of the wet printed flock  business and our
  ongoing initiatives to improve the profitability of our sales mix, we expect the
  year-over-year  decline in consolidated  sales for the third fiscal quarter will
  be somewhat less than we  experienced in the second fiscal  quarter.  We believe
  that we will realize the benefits from the CDF restructuring  initiatives sooner
  than  anticipated,  and  are  confident  that we will  see  further  significant
  year-over-year  earnings  improvement  and stronger  free cash flow in the third
  fiscal quarter. Therefore, at this time, we remain comfortable with the range of
  published  analysts  earnings  estimates of $0.11 to $0.15 per share diluted for
  the third  fiscal  quarter  excluding  restructuring  and related  charges.  Our
  strategy for fiscal 2003 will continue to focus on improving  the  profitability
  of our sales  mix,  increasing  margins  and  return on  invested  capital,  and
  generating free cash flow."
  
       Culp,  Inc. is one of the world's largest  marketers of upholstery  fabrics
  for furniture  and is a leading  marketer of mattress  ticking for bedding.  The
  Company's  fabrics are used  principally in the  production of  residential  and
  commercial furniture and bedding products.
  
       This  release  contains  statements  that  may be  deemed  "forward-looking
  statements"  within the meaning of the federal  securities  laws,  including the
  Private Securities  Litigation Reform Act of 1995 (Section 27A of the Securities
  Act of 1933 and Section 27A of the  Securities  and Exchange Act of 1934).  Such
  statements are inherently  subject to risks and  uncertainties.  Forward-looking
  statements  are statements  that include  projections,  expectations  or beliefs
  about future  events of results or otherwise  are not  statements  of historical
  fact. Such statements are often but not always characterized by qualifying words
  such  as  "expect,"  "believe,"  "estimate,"  "plan"  and  "project"  and  their
  derivatives,  and include but are not limited to statements  about  expectations
  for the company's  future sales,  gross profit margins,  SG&A or other expenses,
  and  earnings,  as  well  as any  statements  regarding  the  company's  view of
  estimates  of the  company's  future  results by  analysts.  Factors  that could
  influence the matters discussed in such statements  include the level of housing
  starts and sales of existing homes,  consumer  confidence,  trends in disposable
  income, and general economic conditions.  Decreases in these economic indicators
  could have a negative effect on the company's business and prospects.  Likewise,
  increases in interest rates,  particularly home mortgage rates, and increases in
  consumer  debt or the  general  rate of  inflation,  could  affect  the  company
  adversely.  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.  Finally,  unanticipated  delays or costs in  executing  restructuring
  actions could cause the cumulative  effect of  restructuring  actions to fail to
  meet the objectives set forth by management. Other factors that could affect the
  matters  discussed in  forward-looking  statements are included in the company's
  periodic reports filed with the Securities and Exchange Commission.
  
  <PAGE>
  
  
                                     CULP, INC.
                           Condensed Financial Highlights
                                     (Unaudited)
  
  <TABLE>
  <CAPTION>
  
                                                                    Three Months Ended
                                                            -------------------------------
                                                              October 27,       October 28,
                                                                 2002              2001
                                                            --------------    -------------
  <S>                                                       <C>               <C>
  Net sales                                                 $   83,573,000    $  96,400,000
  Net income (loss)                                         $   (6,590,000)   $     857,000
  
  Basic and diluted net income (loss) per share             $       ($0.57)           $0.08
  Net income per share, diluted, excluding restructuring
    and related charges and goodwill amortization*          $         0.19    $        0.11
  
  Average shares outstanding:
    Basic                                                       11,483,000       11,221,000
    Diluted                                                     11,754,000       11,281,000
  
  
                                                                      Six Months Ended
                                                            -------------------------------
                                                              October 27,       October 28,
                                                                 2002              2001
                                                           ---------------   --------------
  Net sales                                                 $  169,461,000    $ 182,863,000
  Net loss                                                  $   (5,675,000)   $  (2,025,000)
  Cumulative effect of accounting change, net
     of income taxes                                           (24,151,000)             -0-
                                                            ---------------   --------------
  Net loss                                                  $  (29,826,000)   $  (2,025,000)
                                                            ===============   ==============
  
  Basic and diluted loss per share:
    Loss before cumulative effect of accounting change      $        (0.50)   $       (0.18)
    Cumulative effect of accounting change                           (2.11)            0.00
                                                            ---------------   --------------
    Net loss                                                $        (2.61)   $       (0.18)
                                                            ===============   ==============
  Net income per share, diluted, excluding restructuring
    and related charges, goodwill amortization
    and cumulative effect of accounting change**            $         0.27    $        0.00
  
  Average shares outstanding:
    Basic                                                       11,433,000       11,221,000
    Diluted                                                     11,778,000       11,281,000
  
  *  Excludes restructuring  and related charges of $14.5 million ($8.9 million or
     $0.77 per share diluted  after  taxes) for the second quarter of fiscal 2003.
     Excludes restructuring  and related charges of $0.2 million ($0.1 million, or
     $0.01 per share diluted,  after taxes) and goodwill amortization  of $350,000
     ($230,000, or $0.02 per share diluted, after taxes) for the second quarter of
     fiscal 2002.
  
  ** Excludes  cumulative  effect of accounting change,  net of income  taxes,  of
     $24.2  million  ($2.11 per share  diluted) for the first half of fiscal 2003.
     Excludes  restructuring and related charges of $14.5 million ($8.9 million or
     $0.78 per share  diluted, after  taxes)  for the first  half of fiscal  2003.
     Excludes restructuring and related charges of $2.5 million ($1.6 million,  or
     $0.15 per share diluted, after taxes) and goodwill  amortization  of $700,000
     ($460,000, or $0.04 per share  diluted,  after  taxes)  for the first half of
     fiscal 2002.
  
  </TABLE>
  
  
  
  <PAGE>
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                      CONSOLIDATED STATEMENTS OF INCOME (LOSS)
   FOR THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 27, 2002 AND OCTOBER 28, 2001
  
                  (Amounts in Thousands, Except for Per Share Data)
  <TABLE>
  <CAPTION>
  
                                                                      THREE MONTHS ENDED (UNAUDITED)
                                                  --------------------------------------------------------------------------
                                                            Amounts                                  Percent of Sales
                                                  -----------------------------                 ----------------------------
                                                   October 27,    October 28,       % Over
                                                      2002            2001         (Under)            2003          2002
                                                  --------------  -------------  -------------  -----------------  ---------
  <S>                                           <C>                    <C>         <C>                <C>          <C>
  Net sales                                     $        83,573         96,400      (13.3) %           100.0 %      100.0 %
  Cost of sales                                          69,830         80,858      (13.6) %            83.6 %       83.9 %
                                                  --------------  -------------  -------------  -----------------  ---------
     Gross profit                                        13,743         15,542      (11.6) %            16.4 %       16.1 %
  
  Selling, general and
    administrative expenses                               9,481         11,550      (17.9) %            11.3 %       12.0 %
  Restructuring expense                                  13,360              0      100.0  %            16.0 %        0.0 %
                                                  --------------  -------------  -------------  -----------------  ---------
     Income  (loss) from operations                      (9,098)         3,992     (127.9) %           (10.9)%        4.1 %
  
  Interest expense                                        1,676          1,963      (14.6) %             2.0 %        2.0 %
  Interest income                                          (121)           (34)     255.9  %            (0.1)%       (0.0)%
  Other expense (income), net                               242            765      (68.4) %             0.3 %        0.8 %
                                                  --------------  -------------  -------------  -----------------  ---------
     Income (loss) before income taxes                  (10,895)         1,298     (939.4) %           (13.0)%        1.3 %
  
  Income taxes  *                                        (4,305)           441   (1,076.2) %            39.5 %       34.0 %
                                                  --------------  -------------  -------------  -----------------  ---------
     Net Income (loss)                          $        (6,590)           857     (869.0) %            (7.9)%        0.9 %
                                                  ==============  =============  =============  =================  =========
  
  Net Income (loss) per share-basic                      ($0.57)         $0.08     (812.5) %
  Net Income (loss) per share-diluted                    ($0.57)         $0.08     (812.5) %
  Net income per share, diluted,
    excluding restructuring and related
    charges and goodwill amortization (see                $0.19          $0.11       72.7  %
    proforma statement on page 7)
  Average shares outstanding-basic                       11,483         11,221        2.3  %
  Average shares outstanding-diluted                     11,483         11,281        1.8  %
  
  
  
                                                                       SIX MONTHS ENDED (UNAUDITED)
                                                  -----------------------------------------------------------------------
                                                             Amounts                                  Percent of Sales
                                                  -----------------------------                 ----------------------------
                                                   October 27,    October 28,       % Over
                                                      2002            2001         (Under)             2003          2002
                                                  --------------  -------------  -------------  -----------------  ---------
  Net sales                                     $       169,461        182,863       (7.3) %           100.0 %      100.0 %
  Cost of sales                                         141,864        156,532       (9.4) %            83.7 %       85.6 %
                                                  --------------  -------------  -------------  -----------------  ---------
     Gross profit                                        27,597         26,331        4.8  %            16.3 %       14.4 %
  
  Selling, general and
    administrative expenses                              19,918         22,785      (12.6) %            11.8 %       12.5 %
  Restructuring expense                                  13,360          1,303      925.3  %             7.9 %        0.7 %
                                                  --------------  -------------  -------------  -----------------  ---------
     Income (loss) from operations                       (5,681)         2,243     (353.3) %            (3.4)%        1.2 %
  
  Interest expense                                        3,579          4,031      (11.2) %             2.1 %        2.2 %
  Interest income                                          (271)           (57)     375.4  %            (0.2)%       (0.0)%
  Other expense (income), net                               453          1,337      (66.1) %             0.3 %        0.7 %
                                                  --------------  -------------  -------------  -----------------  ---------
     Loss before income taxes                            (9,442)        (3,068)    (207.8) %            (5.6)%       (1.7)%
  
  Income taxes *                                         (3,767)        (1,043)    (261.2) %            39.9 %       34.0 %
                                                  --------------  -------------  -------------  -----------------  ---------
  Loss before cumulative effect of accounting
     change                                              (5,675)        (2,025)    (180.2) %            (3.3)%       (1.1)%
                                                                                                =================  =========
  Cumulative effect of accounting change,
     net of income taxes                                (24,151)             0
                                                  --------------  -------------
  
     Net loss                                   $       (29,826)        (2,025)
                                                  ==============  =============
  
  Basic loss per share:
     Loss before cumulative effect of
        accounting change                       $         (0.50)         (0.18)    (175.1) %
     Cumulative effect of accounting change               (2.11)          0.00     (100.0) %
                                                  --------------  -------------  ----------
     Net loss                                             (2.61)         (0.18)  (1,345.6) %
                                                  ==============  =============  ==========
  
  Diluted loss per share:
     Loss before cumulative effect of
       accounting change                        $         (0.50)         (0.18)     (175.1) %
     Cumulative effect of accounting change               (2.11)          0.00      (100.0) %
                                                  --------------  -------------  ----------
     Net loss                                             (2.61)         (0.18)   (1,345.6) %
                                                  ==============  =============  ==========
  
  Net income per share, diluted, excluding
     restructuring and related charges, goodwill
     amortization and cumulative effect of
     accounting change (see proforma statement on
     page 8)                                              $0.27          $0.00           N/A
  Average shares outstanding-basic                       11,433         11,221         1.9 %
  Average shares outstanding-diluted                     11,433         11,221         1.9 %
  
   *   Percent of sales column for income taxes is calculated as a % of income (loss) before income taxes.
  </TABLE>
  
  <PAGE>
  
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                             CONSOLIDATED BALANCE SHEETS
               OCTOBER 27, 2002, OCTOBER 28, 2001, AND APRIL 28, 2002
                                      Unaudited
                               (Amounts in Thousands)
  <TABLE>
  <CAPTION>
  
                                                         Amounts                       Increase
                                              -------------------------------         (Decrease)
                                                October 27,      October 28,   -------------------------   * April 28,
                                                    2002            2001        Dollars     Percent          2002
                                               ---------------  -------------- ----------  -------------  ------------
  <S>                                        <C>                <C>            <C>         <C>            <C>
  Current assets
     Cash and cash investments               $         35,037           8,590     26,447       307.9  %         31,993
     Accounts receivable                               32,869          49,402    (16,533)      (33.5) %         43,366
     Inventories                                       54,571          60,814     (6,243)      (10.3) %         57,899
     Other current assets                              15,944           9,851      6,093        61.9  %         13,413
                                               ---------------  -------------- ----------  -------------  ------------
                   Total current assets               138,421         128,657      9,764         7.6  %        146,671
  
  Property, plant & equipment, net                     85,049         105,697    (20,648)      (19.5) %         89,772
  Goodwill                                              9,240          47,781    (38,541)      (80.7) %         47,083
  Other assets                                          2,888           1,682      1,206        71.7  %          4,187
                                               ---------------  -------------- ----------  -------------  ------------
  
                   Total assets              $        235,598         283,817    (48,219)      (17.0) %        287,713
                                               ===============  ============== ==========  =============  ============
  
  
  
  Current liabilities
     Current maturities of long-term debt    $            462           3,136     (2,674)      (85.3) %          1,483
     Accounts payable                                  18,948          25,870     (6,922)      (26.8) %         24,327
     Accrued expenses                                  16,199          15,448        751         4.9  %         16,460
     Accrued restructuring                             10,065           1,748      8,317       475.8  %          2,445
                                               ---------------  -------------- ----------  ----------     ------------
                   Total current liabilities           45,674          46,202       (528)       (1.1) %         44,715
  
  Long-term debt                                       96,096         107,447    (11,351)      (10.6) %        107,001
  
  Deferred income taxes                                 3,502          10,330     (6,828)      (66.1) %         16,932
                                               ---------------  -------------- ----------  -------------  ------------
                   Total liabilities                  145,272         163,979    (18,707)      (11.4) %        168,648
  
  Shareholders' equity                                 90,326         119,838    (29,512)      (24.6) %        119,065
                                               ---------------  -------------- ----------  -------------  ------------
  
                   Total liabilities and
                   shareholders' equity      $        235,598         283,817    (48,219)      (17.0) %        287,713
                                               ===============  ============== ==========  =============  ============
  
  Shares outstanding                                   11,483          11,221        262         2.3  %         11,320
                                               ===============  ============== ==========  =============  ============
  
  
  *  Derived from audited financial statements.
  </TABLE>
  <PAGE>
                                      CULP,INC.
                            FINANCIAL INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE SIX MONTHS ENDED OCTOBER 27, 2002 AND OCTOBER 28, 2001
                                      Unaudited
                               (Amounts in Thousands)
  
  <TABLE>
  <CAPTION>
  
                                                                             SIX MONTHS ENDED
                                                                         --------------------------
  
                                                                                  Amounts
                                                                         --------------------------
                                                                         October 27,   October 28,
                                                                            2002          2001
                                                                         ------------  ------------
  <S>                                                                   <C>            <C>
  Cash flows from operating activities:
      Net loss                                                          $    (29,826)       (2,025)
      Adjustments to reconcile net loss to net cash
         provided by operating activities:
            Cumulative effect of accounting change, net of income taxes       24,151             0
            Depreciation                                                       7,139         8,871
            Amortization of intangible assets                                    219           785
            Amortization of stock based compensation                             105            39
            Restructuring expense                                             13,360         1,303
            Changes in assets and liabilities:
               Accounts receivable                                            10,497         8,447
               Inventories                                                     3,328          (817)
               Other current assets                                           (2,504)       (2,006)
               Other assets                                                     (202)          (17)
               Accounts payable                                               (6,894)        2,522
               Accrued expenses                                                    2           711
               Accrued restructuring                                          (1,546)       (1,778)
               Income taxes payable                                                0        (1,268)
                                                                         ------------  ------------
                  Net cash provided by operating activities                   17,829        14,767
                                                                         ------------  ------------
  Cash flows from investing activities:
      Capital expenditures                                                    (5,328)       (2,288)
                                                                         ------------  ------------
                  Net cash used in investing activities                       (5,328)       (2,288)
                                                                         ------------  ------------
  Cash flows from financing activities:
      Principal payments of long-term debt                                   (11,926)       (1,073)
      Change in accounts payable-capital expenditures                          1,515        (4,023)
      Proceeds from common stock issued                                          954             0
                                                                         ------------  ------------
                  Net cash used in financing activities                       (9,457)       (5,096)
                                                                         ------------  ------------
  
  Increase in cash and cash investments                                        3,044         7,383
  
  Cash and cash investments at beginning of period                            31,993         1,207
                                                                         ------------  ------------
  
  Cash and cash investments at end of period                           $      35,037         8,590
                                                                         ============  ============
  
  
  Free Cash Flow (1)                                                   $      14,016         8,456
                                                                         ============  ============
  
  
  
  (1)  Free Cash Flow is defined  as net cash provided by operating activities less capital expenditures
       plus or minus the change in accounts payable-capital expenditures
  </TABLE>
  <PAGE>
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL ANALYSIS
                                  OCTOBER 27, 2002
  
  <TABLE>
  <CAPTION>
                                                  FISCAL 02                                FISCAL 03
                                              ------------------     ------------------------------------------------  ---------------
                                                      Q2                  Q1                Q2           Q3      Q4         LTM (3)
                                              ------------------     ------------------------------------------------  ---------------
  <S>                                          <C>                   <C>              <C>             <C>      <C>      <C>
  
  INVENTORIES
     Inventory turns                                   5.4                  4.9              4.9
  
  RECEIVABLES
     Days sales in receivables                          47                   34               36
  
  WORKING CAPITAL
     Current ratio                                     2.8                  3.4              3.0
     Operating working capital turnover (2)            4.1                  4.7              4.8
     Operating working capital (2)                 $84,346              $70,762          $68,492
  
  PROPERTY, PLANT & EQUIPMENT
     Depreciation rate                                7.1%                 6.4%             6.5%
     Percent property, plant &
       equipment are depreciated                     58.1%                60.6%            61.5%
     Capital expenditures                           $4,729 (1)           $3,070           $2,258
  
  PROFITABILITY
     Net income (loss) per share (basic)             $0.08                $0.08 (5)      ($0.57)                           ($0.61) (5)
     Net income (loss) per share (diluted)           $0.08                $0.08 (5)      ($0.57)                           ($0.61) (5)
     Net income (loss) per share (diluted)           $0.11 (6)            $0.08 (5)        $0.19 (7)                         $0.69 (8)
     Return on average total capital                  4.3% (6)             3.6% (5)         6.8% (7)                          5.9% (8)
     Return on average equity                         4.0% (6)             3.1% (5)         9.4% (7)                          7.4% (8)
  
  
  LEVERAGE
     Total liabilities/equity                       136.8%               143.2%           160.8%
     Funded debt/equity                              92.3%                99.5%           106.9%
     Funded debt/capital employed                    48.0%                49.9%            51.7%
     Funded debt                                  $110,583              $96,533          $96,558
     Funded debt/EBITDA (LTM) (4)                     4.26                 2.71             2.67
  
  LEVERAGE ( NET OF CASH AND CASH INVESTMENTS) (9)
     Total liabilities/equity                         N/A                   N/A           122.0%
     Funded debt/equity                               N/A                   N/A            68.1%
     Funded debt/capital employed                     N/A                   N/A            40.5%
     Funded debt                                      N/A                   N/A          $61,521
     Funded debt/EBITDA (LTM) (4)                     N/A                   N/A             1.70
  
  OTHER
     Book value per share                           $10.68                $8.45            $7.87
     Employees at quarter end                        3,000                2,900            2,568
     Sales per employee (annualized)              $128,000             $116,163         $122,272
     Capital employed                             $230,421             $193,540         $186,884
     Effective income tax rate (10)                  34.0%                37.0%            37.0%
     EBITDA (4)                                     $8,315               $7,356           $8,810                           $36,096
     EBITDA/net sales (4)                             8.6%                 8.6%            10.5%                              9.8%
  
    (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, certain non-cash charges and cumulative effect of accounting change, as defined by the company's credit agreement
    (5) Excludes cumulative effect of accounting change made during first quarter fiscal 2003
    (6) Excludes restructuring and related charges of $0.2 million ($0.1 million or $0.01 per share diluted, after taxes). Also
        excludes goodwill amortization expense of $350,000 ($230,000 or $.02 per share diluted, after taxes)
    (7) Excludes restructuring and related charges of $14.5 million ($8.9 million or $.77 per share diluted, after taxes)
    (8) Excludes restructuring and related charges of $9.7 million ($5.8 million or $.51 per share diluted, after taxes) and $14.5
        million ($8.9 million or $0.78 per share diluted, after taxes) for the fourth quarter fiscal 2002 and second quarter fiscal
        2003, respectively, and $24.2 million cumulative effect of accounting change for the first quarter of fiscal 2003.  Also
        excludes goodwill amortization expense of $700,000 ($460,000 or $.04 per share diluted, after taxes) for the third and fourth
        quarters of fiscal 2002
    (9) The cash balance of $35.0 million has been excluded from total liabilities, funded debt and capital employed to arrive at
        the ratios in this section
   (10) Effective income tax rate excludes restructuring and related charges
  </TABLE>
  <PAGE>
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                      SALES / GROSS PROFIT BY SEGMENT/DIVISION
   FOR THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 27, 2002 AND OCTOBER 28, 2001
  
                               (Amounts in thousands)
  <TABLE>
  <CAPTION>
  
  
                                                        THREE MONTHS ENDED (UNAUDITED)
                                     ---------------------------------------------------------------------
  
                                                Amounts                           Percent of Total Sales
                                     -------------------------------              ------------------------
                                      October 27,      October 28,     % Over
  Segment/Division Sales                  2002            2001         (Under)       2003         2002
  ---------------------------------  ---------------  --------------  ----------  -----------  -----------
  <S>                              <C>                     <C>       <C>            <C>         <C>
  Upholstery Fabrics
      Culp Decorative Fabrics      $         33,859          38,492   (12.0) %       40.5 %      39.9 %
      Culp Velvets/Prints                    23,305          30,354   (23.2) %       27.9 %      31.5 %
      Culp Yarn                               1,246           1,532   (18.7) %        1.5 %       1.6 %
                                     ---------------  --------------  ----------  -----------  -----------
                                             58,410          70,378   (17.0) %       69.9 %      73.0 %
  Mattress Ticking
       Culp Home Fashions                    25,163          26,022    (3.3) %       30.1 %      27.0 %
                                     ---------------  --------------  ----------  -----------  -----------
  
                                 * $         83,573          96,400   (13.3) %      100.0 %     100.0 %
                                     ===============  ==============  ==========  ===========  ===========
  
  
  
  Segment Gross Profit (1)                                                        Gross Profit Margin
  ---------------------------------                                               ------------------------
  
  Upholstery Fabrics               $          8,810           8,348     5.5  %       15.1 %      11.9 %
  Mattress Ticking                            6,093           7,350   (17.1) %       24.2 %      28.2 %
                                     ---------------  --------------  ----------  -----------  -----------
  
                                   $         14,903          15,698    (5.1) %       17.8 %      16.3 %
                                     ===============  ==============  ==========  ===========  ===========
  
  
  
                                                         SIX MONTHS ENDED (UNAUDITED)
                                     ---------------------------------------------------------------------
  
                                                Amounts                           Percent of Total Sales
                                     -------------------------------              ------------------------
                                      October 27,      October 28,     % Over
  Segment/Division Sales                  2002            2001         (Under)       2003         2002
  ---------------------------------  ---------------  --------------  ----------  -----------  -----------
  
  Upholstery Fabrics
      Culp Decorative Fabrics      $         68,590          73,652    (6.9) %       40.5 %      40.3 %
      Culp Velvets/Prints                    46,424          55,875   (16.9) %       27.4 %      30.6 %
      Culp Yarn                               3,346           2,498    33.9  %        2.0 %       1.4 %
                                     ---------------  --------------  ----------  -----------  -----------
                                            118,360         132,025   (10.4) %       69.8 %      72.2 %
  Mattress Ticking
       Culp Home Fashions                    51,101          50,838     0.5  %       30.2 %      27.8 %
                                     ---------------  --------------  ----------  -----------  -----------
  
                                 * $        169,461         182,863    (7.3) %      100.0 %     100.0 %
                                     ===============  ==============  ==========  ===========  ===========
  
  
  
  Segment Gross Profit (1)                                                        Gross Profit Margin
  ---------------------------------                                               ------------------------
  
  Upholstery Fabrics               $         16,811          13,866    21.2  %       14.2 %      10.5 %
  Mattress Ticking                           11,946          13,599   (12.2) %       23.4 %      26.7 %
                                     ---------------  --------------  ----------  -----------  -----------
  
                                   $         28,757          27,465      4.7 %       17.0 %      15.0 %
                                     ===============  ==============  ==========  ===========  ===========
  
  
  * U.S.  sales were $72,362 and $82,280 for the second quarter of fiscal 2003 and
   fiscal 2002,  respectively;  and  $147,827  and  $154,079 for the six months of
   fiscal 2003 and 2002, respectively.  The percentage  decrease in U.S. sales was
   12.1% for the second quarter and a decrease of 4.1% for the six months.
  
  (1) Excludes  restructuring related charges of $1.2 million and $0.2 million for
      the second  quarter of  fiscal 2003  and 2002,  respectively;  and  excludes
      $1.2 million for the first six months of fiscal 2003 and 2002.
  </TABLE>
  <PAGE>
                     CULP, INC. FINANCIAL INFORMATION RELEASE
                       INTERNATIONAL SALES BY GEOGRAPHIC AREA
   FOR THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 27, 2002 AND OCTOBER 28, 2001
  <TABLE>
  <CAPTION>
                               (Amounts in thousands)
  
                                                  THREE MONTHS ENDED (UNAUDITED)
                                           ---------------------------------------------
  
                                                      Amounts
                                           ------------------------------
                                            October 27,     October 28,      % Over
             Geographic Area                   2002            2001         (Under)
  --------------------------------------   --------------  --------------  -----------
  <S>                                   <C>                     <C>        <C>
  North America (Excluding USA)         $          8,424           8,379      0.5  %
  Europe                                             138             938    (85.3) %
  Middle East                                        760           1,311    (42.0) %
  Far East & Asia                                  1,652           2,891    (42.8) %
  South America                                      171             177     (3.7) %
  All other areas                                     66             424    (84.4) %
                                           --------------  --------------  -----------
  
                                        $         11,211          14,120    (20.6) %
                                           ==============  ==============  ===========
  
                 Percent of total sales            13.4%           14.6%
  
  
                                                   SIX MONTHS ENDED (UNAUDITED)
                                           ---------------------------------------------
  
                                                      Amounts
                                           ------------------------------
                                            October 27,     October 28,      % Over
             Geographic Area                   2002            2001         (Under)
  --------------------------------------   --------------  --------------  -----------
  North America (Excluding USA)         $         15,974          16,410     (2.7) %
  Europe                                             261           1,643    (84.1) %
  Middle East                                      1,647           4,214    (60.9) %
  Far East & Asia                                  2,983           5,483    (45.6) %
  South America                                      414             336     23.1  %
  All other areas                                    355             698    (49.1) %
                                           --------------  --------------  -----------
  
                                        $         21,634          28,784    (24.8) %
                                           ==============  ==============  ===========
  
                 Percent of total sales            12.8%           15.7%
  
  
  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%) and fiscal 2002 - $53,501 (14%).
  </TABLE>
  <PAGE>
  
                                     CULP, INC.
                  PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
          FOR THE THREE MONTHS ENDED OCTOBER 27, 2002 AND OCTOBER 28, 2001
                  (Amounts in Thousands, Except for Per Share Data)
  <TABLE>
  <CAPTION>
  
                                                                    THREE MONTHS ENDED (UNAUDITED)
                                          --------------------------------------------------------------------------------------------
                                         As Reported                   October 27, 2002          October 28, 2001
                                         October 27,  Reclassification   Proforma Net   % of       Proforma Net    % of       % Over
                                            2002       & Adjustments   of Adjustments  Net Sales  of Adjustments  Net Sales   (Under)
                                         ------------  -------------    ----------------------    -----------------------    ---------
  <S>                                    <C>           <C>               <C>           <C>            <C>       <C>          <C>
  Net sales                              $     83,573             0             83,573  100.0%          96,400   100.0%        -13.3%
  Cost of sales                                69,830        (1,160) (3)        68,670   82.2%          80,702    83.7% (6)    -14.9%
                                         ------------  -------------    ----------------------    -----------------------    ---------
          Gross profit                         13,743        (1,160)            14,903   17.8%          15,698    16.3%         -5.1%
  
  Selling, general and
    administrative expenses                     9,481             0              9,481   11.3%          11,550    12.0%        -17.9%
  Restructuring expense                        13,360       (13,360) (4)             0    0.0%               0     0.0%          0.0%
                                         ------------  -------------    ----------------------    -----------------------    ---------
          Income  (loss) from                  (9,098)      (14,520)             5,422    6.5%           4,148     4.3%         30.7%
          operations
  
  Interest expense                              1,676             0              1,676    2.0%           1,963     2.0%        -14.6%
  Interest income                                (121)            0               (121)  -0.1%             (34)    0.0%        255.9%
  Other expense (income), net                     242             0                242    0.3%             414     0.4% (7)    -41.5%
                                         ------------  -------------    ----------------------    -----------------------    ---------
          Income (loss) before income         (10,895)      (14,520)             3,625    4.3%           1,805     1.9%        100.8%
          taxes
  
  Income taxes  (1)                            (4,305)       (5,646)             1,341   37.0%             614    34.0% (2)    118.6%
                                         ------------  -------------    ----------------------    -----------------------    ---------
  Net income (loss)                      $     (6,590)       (8,874)             2,284    2.7%           1,191     1.2%         91.7%
                                         ============  =============    ======================    =======================    =========
  
  Net income (loss) per share-basic            ($0.57)       ($0.77)             $0.20                   $0.11
  Net income (loss) per share-diluted          ($0.57)       ($0.77)             $0.19                   $0.11
  Average shares outstanding-basic             11,483        11,483             11,483                  11,221
  Average shares outstanding-diluted           11,483        11,483             11,754 (5)              11,281
  
  Notes:
   (1) Percent of net sales column for income taxes is calculated as a % of income (loss) before income taxes
   (2) Pre-restructuring income tax rate was 37% and 34% for the second quarter of fiscal 2003 and 2002, respectively.
   (3) The $1.2 million represents restructuring related charges for inventory markdowns and movement of equipment
   (4) The $13.4 million represents restructuring charges for the shut down of the Chattanooga operation, $12.1 million, and the
       additional write-down of wet printed assets held for sale, $1.3 million
   (5) Incremental shares of 271,000 for fiscal 2003 included in fully diluted calculation
   (6) Excludes CDF and CYN restructuring related charges of $.2 million ($0.01 million or $.01 per share diluted, after taxes)
   (7) Excludes $350,000 ($230,000 or $0.02 per share diluted, after taxes) of goodwill amortization
  </TABLE>
  
  <PAGE>
  
  
                  PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
           FOR THE SIX MONTHS ENDED OCTOBER 27, 2002 AND OCTOBER 28, 2001
                  (Amounts in Thousands, Except for Per Share Data)
  <TABLE>
  <CAPTION>
                                                                                  SIX MONTHS ENDED
                                          --------------------------------------------------------------------------------------------
  
  
                                      As Reported                   October 27, 2002             October 28, 2001
                                      October 27,  Reclassification  Proforma Net      % of       Proforma Net       % of     % Over
                                         2002       & Adjustments   of Restructuring  Net Sales  of Restructuring  Net Sales  (Under)
                                      ------------  -------------     ----------------------      -----------------------    ---------
  <S>                                 <C>            <C>                <C>          <C>           <C>            <C>          <C>
  Net sales                           $    169,461             0           169,461    100.0%        182,862        100.0%        -7.3%
  Cost of sales                            141,864        (1,160) (3)      140,704     83.0%        155,397         85.0% (6)    -9.5%
                                      ------------  -------------     ----------------------      -----------------------    ---------
          Gross profit                      27,597        (1,160)           28,757     17.0%         27,465         15.0%         4.7%
  
  Selling, general and
    administrative expenses                 19,918             0            19,918     11.8%         22,785         12.5%       -12.6%
  Restructuring expense                     13,360       (13,360) (4)            0      0.0%              0          0.0% (6)     0.0%
                                      ------------  -------------     ----------------------      -----------------------    ---------
          Income  (loss) from               (5,681)      (14,520)            8,839      5.2%          4,680          2.6%        88.9%
          operations
  
  Interest expense                           3,579             0             3,579      2.1%          4,031          2.2%       -11.2%
  Interest income                             (271)            0              (271)    -0.2%            (57)         0.0%       375.4%
  Other expense (income), net                  453             0               453      0.3%            637          0.3% (7)   -28.9%
                                      ------------  -------------     ----------------------      -----------------------     --------
          Income (loss) before income       (9,442)      (14,520)            5,078      3.0%             69          0.0%         N/A
          taxes
  
  Income taxes  (1)                         (3,767)       (5,646)            1,879     37.0%             23         34.0% (2)     N/A
                                      ------------  -------------     ----------------------      -----------------------    ---------
  Income (loss) before cumulative
  effect of accounting change        $      (5,675)       (8,874)            3,199      1.9%             46          0.0%         N/A
                                      ============  =============     ======================      =======================    =========
  
  Net income (loss) per share-basic         ($0.50)       ($0.78)            $0.28                    $0.00
  Net income (loss) per share-diluted       ($0.50)       ($0.78)            $0.27                    $0.00
  Average shares outstanding-basic          11,433        11,433            11,433                   11,221
  Average shares outstanding-diluted        11,433        11,433            11,778 (5)               11,281
  
  
  Notes:
   (1) Percent of net sales column for income taxes is calculated as a % of income (loss) before income taxes.
   (2) Pre-restructuring income tax rate was 37% and 34% for the first six months of fiscal 2003 and 2002, respectively.
   (3) The $1.2 million represents restructuring related charges for inventory markdowns and movement of equipment
   (4) The $13.4 million represents restructuring charges for the shut down of the Chattanooga operation, $12.1 million, and the
       additional write-down of wet printed assets held for sale, $1.3 million
   (5) Incremental shares of 345,000 included in fully diluted calculation
   (6) $1.2 million ($.8 million or $0.07 per share diluted, after taxes)of CDF and CYN restructuring related charges are excluded
       from the cost of sales total; and $1.3 million ($.9 million or $0.07 per share diluted, after taxes) in CDF  and CYN
       restructuring charges are excluded to arrive at the proforma amounts
   (7) Excludes $700,000 ($460,000 or $0.04 per share diluted, after taxes) of goodwill amortization
  
  </TABLE>
  
  <PAGE>
  
  
                      CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
      for the three and six months ended October 27, 2002 and October 28, 2001
  
  
  
  
  OVERVIEW
  
       GENERAL  - For the  second  quarter,  net  sales  decreased  13.3% to $83.6
  million;  and the company  reported  net  income,  excluding  restructuring  and
  related charges,  of $2.3 million,  or $0.19 per share diluted versus net income
  of $1.2  million,  or $0.11 per share  diluted in the  second  quarter of fiscal
  2002, excluding  restructuring and related charges,  and goodwill  amortization.
  The company reported further improvement in its balance sheet by reducing funded
  debt by $12.0  million  during  the first  half of fiscal  2003 and  ending  the
  quarter with $35.0 million in cash and cash investments.
  
       ADOPTION OF SFAS No. 142 - As of April 29, 2002, Culp adopted SFAS No. 142,
  "Goodwill and Other Intangible  Assets." As a result the company recorded during
  the first quarter of fiscal 2003 a non-operating,  non-cash goodwill  impairment
  charge of $37.6  million  ($24.2  million  net of taxes of $13.4),  or $2.11 per
  share  diluted,  related to the  goodwill  associated  with the Culp  Decorative
  Fabrics division.
  
       PROFORMA  CONSOLIDATED  STATEMENTS  OF  INCOME  (LOSS) -- The  company  has
  included,  within this financial information release, proforma income statements
  which reconcile the reported  income  statements  with proforma  results,  which
  exclude restructuring and related charges,  goodwill amortization and cumulative
  effect of  accounting  change.  See PROFORMA  CONSOLIDATED  STATEMENTS OF INCOME
  (LOSS) on pages 7 and 8 of this financial information release.
  
       RESTRUCTURING  AND RELATED  CHARGES-- The financial  results for the second
  quarter include a total of $14.5 million in  restructuring  and related charges,
  all of which reflect previously announced restructuring initiatives. The charges
  are made up of the  following:  (1)  $12.1  million  of  restructuring  expenses
  related to the Culp Decorative  Fabrics ("CDF")  division,  the largest items of
  which are lease  termination  expenses and personnel  costs; (2) $1.2 million of
  'restructuring  related" costs for CDF, which include  inventory  mark-downs and
  equipment moving expense; and (3) $1.3 million of restructuring expenses related
  to further  write-downs  of equipment in  connection  with the exit from the wet
  printed  flock  business  by  the  Culp  Velvets/Prints  ("CVP")  division.  The
  additional  write down,  which is a non cash item,  was recorded to more closely
  estimate the current  market  value of this  equipment,  which has  continued to
  deteriorate since April 2002. Of the charges related to CDF,  approximately $3.9
  million are non-cash  items,  while the remaining  $9.4 million  relates to cash
  expenditures.  As  reflected  in the  financial  statements,  restructuring  and
  related  charges were recorded as $13.4 million in the line item  "restructuring
  expense"  and $1.2  million in "cost of sales" and have  reduced  net income per
  share by $0.77 for the second quarter of fiscal 2003.
  
  The  restructuring  and  related  charges  for  CDF  reflect  the  restructuring
  initiative announced in August 2002. This initiative was substantially completed
  by the end of the second quarter. In fact, the company is well ahead of schedule
  in completing the most important elements of the plan as announced.  The company
  continues  to  expect  that the CDF  restructuring  actions  will  significantly
  improve gross margins  within the division,  while  allowing the ability to meet
  foreseeable  levels of demand,  all on a  substantially  lower  cost  base.  The
  initiative is projected to result in annual cost savings of approximately $12 to
  $15  million.  Approximately  $8  million  of  these  savings  relate  to  fixed
  manufacturing  costs and the  remaining  $4 to $7  million  relate  to  variable
  manufacturing costs.
  
  Specifically,  the company  completed  the shut down of its  operations at CDF's
  Chattanooga,  Tennessee facility at the end of the second quarter,  while it was
  originally  contemplated that this process could take until the end of the third
  quarter.  All of the  operations  have been  successfully  transferred  to CDF's
  Pageland,  South Carolina and Graham,  North Carolina plants.  In addition,  the
  consolidation of the finishing, yarn-making and distribution operations from the
  Chattanooga facility to other CDF plants has been completed,  with each of those
  transitions  taking place ahead of the targeted  completion dates.  There are no
  manufacturing operations remaining at the Chattanooga plant as of the end of the
  second quarter.
  
  The remaining elements from the CDF restructuring initiative to be completed are
  as follows:  (1) achieve  targeted levels of operating  efficiency for the looms
  transferred  into  Pageland,  which is  projected  to take  until the end of the
  fourth quarter; (2) transfer certain equipment to other CDF plants by the end of
  this fiscal year; and (3) complete the capital  expenditure  projects related to
  the restructuring.
  
  The announced addition to the Pageland plant is currently under construction and
  is  expected to be ready for  occupancy  in early  2003.  The  company  plans to
  install ten new high speed  weaving  machines in the  building  during the third
  quarter.  These new machines will replace lower speed  equipment  that is now in
  place at the Pageland  plant,  thereby  further  increasing  the  efficiency and
  output of that facility's operations.
  
  Another  important  element  of the  CDF  restructuring  initiative  is a  major
  reduction in the complexity of the dobby upholstery  product line, which has led
  to the elimination of approximately  1,500 low volume stock keeping units (SKUs)
  representing  about 70% of the  finished  goods  SKUs (but only 10% of sales) in
  that product  category.  This initiative is substantially  complete and has been
  accomplished without significant disruptions of customer relationships.
  
  In line with previous estimates,  the CDF restructuring is expected to result in
  total  restructuring  and related  charges of  approximately  $15  million.  The
  company currently  estimates that this  restructuring  will result in additional
  charges of approximately $1.3 million during the second half of the fiscal year,
  most of which will relate to equipment moving costs.
  
  INCOME STATEMENT COMMENTS
  
      UPHOLSTERY FABRIC SEGMENT
  
       NET SALES - Upholstery  fabric sales for the second  quarter of fiscal 2003
  decreased  17.0% to $58.4  million  (see sales by  Segment/Division  on page 5).
  Domestic upholstery fabric sales decreased 13.9% to $51.4 million, due primarily
  to overall weakness in consumer demand for upholstered furniture.  International
  sales decreased  34.3% to $7.0 million,  due primarily to the exiting of the wet
  printed flock fabric business in April 2002.
  
  In addition to significant  overall  softness in demand during the quarter,  the
  sales decrease in upholstery fabrics is partially  attributable to the company's
  strategy to focus on improving the profitability of its sales mix by reducing or
  eliminating  products generating little or no profit. In the Culp Velvets/Prints
  division,  the company  discontinued its unprofitable wet printed flock business
  at the end of last fiscal year.  This product  line  reported  annual sales last
  year of  approximately  $17 million with  approximately  $2 million in operating
  losses. In the CDF division, the company discontinued about half of its finished
  goods SKUs (or  approximately  10,000)  over the last  year,  most of which were
  small  volume  items and were very costly to produce.  These  discontinued  SKUs
  include the dobby product line SKUs that were recently eliminated as part of the
  Chattanooga  restructuring.  The company expects this process of identifying and
  dropping  its low profit  items to  continue  through the balance of this fiscal
  year.
  
  The company believes  additional  factors that are likely  impacting  upholstery
  fabric sales are (1) the increasing market share of leather furniture being sold
  in the U.S.; and (2) the increase in imported fabrics, both in "piece goods" and
  "cut and sewn kits".
  
       GROSS  PROFIT - In  spite  of weak  furniture  demand  and the  significant
  operational  disruption in connection  with the Chattanooga  restructuring,  the
  upholstery  fabric  segment  improved  its gross  profit  dollars  and  margins.
  Excluding restructuring related charges of $1.2 million and $0.2 million for the
  second quarter of fiscal 2003 and 2002,  respectively,  gross profit dollars and
  margin increased in the second quarter of fiscal 2003 to $8.8 million and 15.1%,
  respectively,  from $8.3  million and 11.9% in the second  quarter of last year.
  The key factors  behind these gains were: (1) a more  profitable  sales mix; (2)
  the  elimination  of losses related to the wet printed flock  business;  (3) the
  increasing  productivity benefits from the CDF 2001 restructuring;  and (4) some
  cost reduction benefits from the Chattanooga closure.
  
  With the  earlier-than-expected  cost  reduction  benefits  as a  result  of the
  Chattanooga  closure  being  completed  by the end of the  second  quarter,  the
  company is optimistic that gross profit dollars and margins in CDF will continue
  to improve over the next few quarters.  Additionally  within CDF, the company is
  focused on (1) creating and selling products with better margins; (2) continuing
  to reduce low profit SKUs; and (3) improving  manufacturing  performance in CDF,
  in terms of productivity and inventory obsolescence.
  
      MATTRESS TICKING SEGMENT
  
       NET SALES - Mattress  fabric  sales for the second  quarter of fiscal  2003
  decreased 3.3% to $25.2 million.  Sales to U.S. bedding  manufacturers fell 7.1%
  to $21.0 million,  while sales to international  customers increased by 21.4% to
  $4.2  million.  The sales  decrease is due to the  overall  weakness in consumer
  demand for mattresses.
  
       GROSS  PROFIT--Culp  Home Fashions (CHF) reported for the second quarter of
  fiscal 2003 lower gross  profit  dollars and margins of $6.1  million and 24.2%,
  respectively,  both down from $7.3  million and 28.2%  during the  corresponding
  quarter of the prior year.  The key factors  impacting  gross profit were a high
  cost European sourcing  agreement and lower sales. CHF entered into an agreement
  with a European  supplier  last fall as part of the  termination  of a long-term
  supply  relationship.  The  agreement  provided,  among other  things,  that the
  company maintain a certain level of weekly  purchases  through October 31, 2002.
  Therefore,  for the first and second quarters of this year, the company has been
  required to source  products  from this  supplier  that are  significantly  more
  expensive than products  manufactured  at the company's U.S. and Canadian plants
  in order to meet the  agreement's  minimum  purchase  levels.  The  company  had
  planned during the last fiscal year for the termination of this supply agreement
  by  initiating  a plan to increase  capacity  in the U.S.  and  Canadian  plants
  beginning  in the first  quarter  and ending by  December  2002.  This  capacity
  expansion  project  accounts for  approximately  $4.5  million of the  company's
  fiscal 2003  capital  spending  plan.  This supply  agreement  was  concluded on
  October 31, 2002 and only a few  additional  containers  of product  will arrive
  during the third quarter. There is potential for some residual effect on profits
  during the third  quarter from the supply  agreement as the division  works down
  its inventory position of these products.
  
       SG&A EXPENSES - SG&A expenses for the second quarter declined $2.1 million,
  or 17.9%,  from the prior  year,  and as a percent of net sales,  SG&A  expenses
  declined to 11.3% from 12.0%. SG&A expenses in the second quarter included a net
  reduction of $424,000 in the allowance for doubtful accounts, due to a reduction
  in past due balances. This compares with bad debt expense of $1.4 million in the
  year-earlier period.
  
       INTEREST EXPENSE (INCOME)- Interest expense for the second quarter declined
  to  $1.7  million  from  $2.0  million  due to  significantly  lower  borrowings
  outstanding,  offset somewhat by an increase in the interest rate on the private
  placement  debt.  Interest  income  increased  to $121,000  from  $34,000 due to
  significantly higher invested cash as compared with the prior year.
  
       OTHER EXPENSE (INCOME), NET - Other expense (income) for the second quarter
  of fiscal 2003 totaled  $242,000  compared with $765,000 in the prior year.  The
  decrease was principally due to the adoption of SFAS No. 142, which discontinued
  the amortization of goodwill. Goodwill amortization during second quarter fiscal
  2002 was $350,000.
  
       INCOME TAXES - Excluding  the  cumulative  effect of accounting  change and
  restructuring and related charges,  the effective tax rate for the first half of
  fiscal 2003 was 37% compared with 34% for the year earlier period.
  
       EBITDA - EBITDA for the  second  quarter  of fiscal  2003 was $8.8  million
  compared with $8.3 million in the prior year.  EBITDA  includes  earnings before
  interest,  income  taxes,  depreciation,  amortization,  all  restructuring  and
  related charges,  certain  non-cash charges and cumulative  effect of accounting
  change, as defined by the company's credit agreement.
  
  
  
  BALANCE SHEET COMMENTS
  
       CASH AND CASH  INVESTMENTS  - Cash and cash  investments  as of October 27,
  2002  increased to $35.0  million from $32.0  million at the end of fiscal 2002,
  reflecting  cash flow from  operations  of $17.8  million  for the first half of
  fiscal 2003,  capital  expenditures  of $5.3  million,  debt  repayment of $12.0
  million,  stock issuance of $1.0 million and an increase in accounts payable for
  capital expenditures of $1.5 million.
  
       WORKING  CAPITAL - Accounts  receivable  as of October 27,  2002  decreased
  33.5%  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 October 27, 2002  compared with 47 a year
  ago and 36 at last  fiscal  year end.  Inventories  at the  close of the  second
  quarter decreased 10.3% from a year ago.  Inventory turns for the second quarter
  were 4.9 versus  5.4 for the  year-earlier  period.  Operating  working  capital
  (comprised of accounts  receivable,  inventory  and accounts  payable) was $68.5
  million at October 27, 2002, down from $84.3 million a year ago.
  
       PROPERTY,  PLANT AND  EQUIPMENT  - Capital  spending  for the first half of
  fiscal 2003 was $5.3 million. The company's original budget for capital spending
  for all of fiscal 2003 was $8.5  million,  compared  with $4.7 million in fiscal
  2002.  As part of the  fiscal  2003  restructuring  plan  in  CDF,  the  company
  increased  the budget by $4.5  million to $13.0  million.  Depreciation  for the
  second  quarter of fiscal 2003 totaled $3.5  million,  and is estimated at $14.0
  million for the full fiscal year.
  
       INTANGIBLE  ASSETS - As of October 27, 2002  goodwill in the amount of $9.2
  million is the company's only intangible asset. The company adopted SFAS No. 142
  on April  29,  2002.  During  the  first  quarter  of  fiscal  2003 the  company
  recognized  an impairment  charge of $37.6 ($24.2  million net of taxes of $13.4
  million) in accordance with SFAS No. 142.
  
       LONG-TERM  DEBT - As of the end of the  second  quarter,  the  company  had
  reduced  funded debt by $12.0  million  from last  fiscal year end.  Funded debt
  equals long-term debt plus current maturities.  Funded debt was $96.6 million at
  October 27,  2002,  compared  with $108.5  million at fiscal 2002 year end.  The
  company's funded debt-to-capital ratio was 51.7% at October 27, 2002.
  
       The company  also reports it leverage  statistics  in terms of funded debt,
  net of cash and cash investments,  under the assumption it could use the cash to
  repay  debt  at  any  time.  Therefore,  funded  debt,  net  of  cash  and  cash
  investments, is $61.5 million at October 27, 2002 compared with $76.5 million at
  fiscal 2002 year end. In addition,  the  company's  funded debt (net of cash and
  cash  investments)  to capital  employed ratio was 40.5% and funded debt (net of
  cash and cash investments) to EBITDA was 1.70. Since the end of fiscal 2000 (two
  and one half years), the company has substantially  reduced its funded debt (net
  of cash and cash  investments) to $61.5 million from $136.5 million,  a total of
  $75 million or 55%.
  
       The company  entered into a new loan agreement  during August 2002 with its
  principal  bank lender that  provides,  among other things,  for: (1) a two year
  $34.7 million credit facility,  which includes a $15.0 million  revolving credit
  line and $19.7  million  for  letters  of credit  for the  company's  industrial
  revenue bonds (IRB's), (2) lower interest rates based upon a pricing matrix, and
  (3)  improved  financial  covenants.  The  company  was in  compliance  with all
  convenants contained in its loan agreements as of October 27, 2002.
  
  
  FREE CASH FLOW COMMENTS
  
       Free cash flow, defined as cash from operations, less capital expenditures,
  plus or minus the change in  accounts  payable  capital  expenditure,  was $14.0
  million for the first six months of fiscal 2003  compared  with $8.5 million for
  the same period of the prior year.  The key  reasons for this  improvement  were
  continued  improvement  in  accounts  receivable  collections,  lower  inventory
  levels,  higher profits and the benefit from deferred  payment terms for capital
  expenditures.
  
  BUSINESS OUTLOOK
  
       For the third  quarter of fiscal 2003,  the company  believes  consolidated
  sales will decline somewhat less than the second quarter decrease of 13.3% while
  gross  profit  margins are  expected to improve  significantly  over last year's
  third quarter gross margin of 14.9%,  due primarily to the substantial  progress
  being made in the Culp Decorative  Fabrics division.  Additionally,  total SG&A,
  interest and other  expenses are expected to decline over $1.2  million,  absent
  any large unusual  items,  in the third quarter from a total of $13.3 million in
  the last year's third quarter.  Therefore,  with gross profit margin improvement
  and lower costs, the company is comfortable with the range of published analysts
  earnings  estimates of $0.11 to $0.15 per share for the third  quarter of fiscal
  2003,  excluding any restructuring and related charges. The net earnings for the
  third quarter of last year were $400,000, or $0.04 per share, excluding goodwill
  amortization.
  
       The company's financial results over the last few quarters and its business
  outlook clearly  demonstrate the company's strategic focus on: (1) improving the
  profitability  of its sales mix;  (2)  increasing  margins and return on capital
  employed; and (3) generating free cash flow.
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text: -------------------------------------------------------------------------------
  
                        SECURITIES AND EXCHANGE COMMISSION
                              Washington, D.C. 20549
  
                                     ---------
  
                                     Form 8-K
  
                                  CURRENT REPORT
  
                 Pursuant to Section 13 or 15(d) of the Securities
                               Exchange Act of 1934
  
                                   -------------
  
         Date of Report (Date of earliest event reported) November 25, 2002
  
                                     CULP, INC.
  
               (Exact name of registrant as specified in its charter)
  
           North Carolina                  0-12781                56-1001967
  
  (State or other jurisdiction of   (Commission File No.)       (IRS Employer
           incorporation)                                    Identification No.)
  
                               101 South Main Street
                         High Point, North Carolina  27260
                     (Address of principal executive offices)
                                  (336) 889-5161
               (Registrant's telephone number, including area code)
  
           (Former name or former address, if changed since last report)
  
  -------------------------------------------------------------------------------
  Item 5. Other Events
  
  See  attached  Press  Release (4 pages) and  Financial  Information  Release (13
  pages),  both dated November 25, 2002, related to the fiscal 2003 second quarter
  ended October 27, 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 (Section 27A of
  the Securities Act of 1933 and Section 27A of the Securities and Exchange Act of
  1934).  Such  statements  are  inherently  subject  to risks and  uncertainties.
  Forward-looking statements are statements that include projections, expectations
  or beliefs  about future  events of results or otherwise  are not  statements of
  historical  fact.  Such  statements  are often but not always  characterized  by
  qualifying words such as "expect,"  "believe,"  "estimate," "plan" and "project"
  and their  derivatives,  and  include but are not  limited to  statements  about
  expectations for the company's future sales, gross profit margins, SG&A or other
  expenses,  and earnings,  as well as any statements regarding the company's view
  of estimates of the  company's  future  results by analysts.  Factors that could
  influence the matters discussed in such statements  include the level of housing
  starts and sales of existing homes,  consumer  confidence,  trends in disposable
  income, and general economic conditions.  Decreases in these economic indicators
  could have a negative effect on the company's business and prospects.  Likewise,
  increases in interest rates,  particularly home mortgage rates, and increases in
  consumer  debt or the  general  rate of  inflation,  could  affect  the  company
  adversely.  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.  Finally,  unanticipated  delays or costs in  executing  restructuring
  actions could cause the cumulative  effect of  restructuring  actions to fail to
  meet the objectives set forth by management. Other factors that could affect the
  matters  discussed in forward  looking  statements are included in the company's
  periodic reports filed with the Securities and Exchange Commission.
  
                                                        SIGNATURE
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
  undersigned hereunto duly authorized.
  
                                          CULP, INC.
                                          (Registrant)
  
                                 By:       Franklin N. Saxon
                                          -----------------------------
                                           Executive Vice President and
                                           Chief Financial Officer
  
  Dated:  November 25, 2002
  NEWS RELEASE
  
  Investor Contact:  Kathy J. Hardy         Media Contact:  Kenneth M. Ludwig
                     Corporate Secretary                    Senior Vice President,
                     336-888-6209                           Human Resources
                                                            336-889-5161
  
  FOR IMMEDIATE RELEASE
  
                       CULP REPORTS SECOND QUARTER 2003 RESULTS
                                ----------------------
                          IMPROVED EARNINGS REFLECT BENEFITS
                 OF RESTRUCTURING ACTIONS AND BALANCE SHEET MANAGEMENT
  
  HIGH POINT, N. C. (November 25, 2002) - Culp,  Inc.  (NYSE:  CFI) today reported
  financial  and  operating  results for the second  quarter and six months  ended
  October 27, 2002. The quarter was highlighted by:
  
  o    Diluted  earnings per share of $0.19 (excluding  restructuring  and related
       charges)
  o    Improved  gross profit  margin of 17.8%  (excluding  restructuring  related
       charges)
  o    Chattanooga restructuring substantially complete at the end of the quarter
  o    Cash  position  built to $35.0 million from $25.1 million at the end of the
       first quarter
  
       For the three months ended  October 27, 2002,  net sales were $83.6 million
  compared  with  $96.4  million a year ago.  The  company  reported  net  income,
  excluding restructuring and related charges, of $2.3 million, or $0.19 per share
  diluted,  versus net income of $1.2 million,  or $0.11 per share diluted, in the
  second quarter of fiscal 2002, excluding  restructuring and related charges, and
  goodwill  amortization.  The financial  results for the second quarter include a
  total of $14.5  million  in  restructuring  and  related  charges,  all of which
  reflect previously announced restructuring initiatives.  Including restructuring
  and related charges,  the company reported a net loss of $6.6 million,  or $0.57
  per share diluted, for the second quarter of fiscal 2003.
  
       For the six months ended October 27, 2002,  the company  reported net sales
  of $169.5 million,  compared with $182.9 million for the same period a year ago.
  Excluding  restructuring  and  related  charges  and the  cumulative  effect  of
  accounting  change,  net income for the first six months of fiscal 2003 was $3.2
  million,  or $0.27 per share  diluted,  compared with net income of $46,000,  or
  $0.00 per share  diluted,  excluding  restructuring  and  related  charges,  and
  goodwill amortization for the prior-year period. Including restructuring charges
  and the cumulative effect of accounting  change, the company reported a net loss
  for the first six  months of fiscal  2003 of $29.8  million,  or $2.61 per share
  diluted.
  As previously announced,  due to the adoption of a new accounting standard,
  "Goodwill and Other Intangible Assets," the company recorded a non-cash goodwill
  impairment  charge,  net of income taxes,  of $24.2 million,  or $2.11 per share
  diluted,  in the first quarter of 2003 related to the goodwill  associated  with
  its  Culp  Decorative  Fabrics  ("CDF")  division.   The  charge,   recorded  as
  "cumulative  effect of accounting  change," has no effect on operating income or
  cash flow from operations and does not affect the company's  compliance with the
  terms of its lending agreements.
  
       "In an especially  challenging business environment,  these results clearly
  reflect the benefits of the actions we have taken to improve the  efficiency  of
  our operations,  reduce costs and strengthen our balance sheet," remarked Robert
  G. Culp,  III, chief  executive  officer of Culp,  Inc. "Our top line growth was
  affected by the overall  industry  weakness in demand for furniture and bedding.
  In addition,  the 13.3% decline in sales is partly attributable to our strategic
  initiatives to improve the overall profitability of our sales mix by reducing or
  eliminating less profitable products. As previously  announced,  we discontinued
  our  unprofitable  wet printed flock  business at the end of fiscal 2002.  Since
  that time we have also  discontinued a significant  number of the finished goods
  stock keeping units, or SKUs,  within CDF in our continued  efforts to eliminate
  products that are not generating  acceptable  profits.  However, in spite of the
  lower sales volume and the operational disruption resulting from the Chattanooga
  restructuring,  we still  reported a meaningful  improvement  in  profitability.
  Gross profit margin was 17.8% in the second fiscal  quarter  compared with 16.3%
  for the same period a year ago,  excluding the restructuring  related charges in
  each quarter.  Our strategic focus  continues to be on effectively  managing the
  aspects of our  business  that we can  control,  and we believe  our  ability to
  improve  profits,   excluding   restructuring  and  related  charges,   in  this
  environment demonstrates our strong execution.
  
       "Our solid  performance  with respect to managing  our working  capital and
  strengthening  our balance  sheet  further  extended the progress from the first
  quarter of this year," said Culp.  "Cash flow from  operations was $17.8 million
  for the first six months of 2003,  and we have  reduced our funded debt by $12.0
  million from the end of fiscal 2002. At the end of the second fiscal quarter, we
  had $35.0 million in cash and cash investments,  a significant  improvement over
  $8.6  million a year ago.  A key  objective  for 2003 is to  maintain  a strong,
  liquid balance sheet, and we will continue to focus on opportunities for further
  improvement.
  
       "Our  previously  announced  Chattanooga   restructuring  initiatives  were
  substantially  complete  at  the  end of  the  second  quarter.  We  closed  the
  manufacturing  operations  at  our  facility  in  Chattanooga,   Tennessee,  and
  successfully  transferred  these  operations  to  other  plants  well  ahead  of
  schedule.  This  restructuring  is projected to result in annual cost savings of
  $12 to $15 million.  We believe these actions will  significantly  improve gross
  margins while allowing us to continue to meet foreseeable  customer demand,  all
  on a substantially lower cost base."
  
       Looking ahead, Culp added, "We believe we have made meaningful  progress in
  managing our costs and improving our profitability.  However, like others in our
  industry,  our sales volume continues to be affected by the uncertainties in the
  economy  and  decline  in  overall  consumer   spending  for  home  furnishings.
  Additionally,  with the  elimination  of the wet printed flock  business and our
  ongoing initiatives to improve the profitability of our sales mix, we expect the
  year-over-year  decline in consolidated  sales for the third fiscal quarter will
  be somewhat less than we  experienced in the second fiscal  quarter.  We believe
  that we will realize the benefits from the CDF restructuring  initiatives sooner
  than  anticipated,  and  are  confident  that we will  see  further  significant
  year-over-year  earnings  improvement  and stronger  free cash flow in the third
  fiscal quarter. Therefore, at this time, we remain comfortable with the range of
  published  analysts  earnings  estimates of $0.11 to $0.15 per share diluted for
  the third  fiscal  quarter  excluding  restructuring  and related  charges.  Our
  strategy for fiscal 2003 will continue to focus on improving  the  profitability
  of our sales  mix,  increasing  margins  and  return on  invested  capital,  and
  generating free cash flow."
  
       Culp,  Inc. is one of the world's largest  marketers of upholstery  fabrics
  for furniture  and is a leading  marketer of mattress  ticking for bedding.  The
  Company's  fabrics are used  principally in the  production of  residential  and
  commercial furniture and bedding products.
  
       This  release  contains  statements  that  may be  deemed  "forward-looking
  statements"  within the meaning of the federal  securities  laws,  including the
  Private Securities  Litigation Reform Act of 1995 (Section 27A of the Securities
  Act of 1933 and Section 27A of the  Securities  and Exchange Act of 1934).  Such
  statements are inherently  subject to risks and  uncertainties.  Forward-looking
  statements  are statements  that include  projections,  expectations  or beliefs
  about future  events of results or otherwise  are not  statements  of historical
  fact. Such statements are often but not always characterized by qualifying words
  such  as  "expect,"  "believe,"  "estimate,"  "plan"  and  "project"  and  their
  derivatives,  and include but are not limited to statements  about  expectations
  for the company's  future sales,  gross profit margins,  SG&A or other expenses,
  and  earnings,  as  well  as any  statements  regarding  the  company's  view of
  estimates  of the  company's  future  results by  analysts.  Factors  that could
  influence the matters discussed in such statements  include the level of housing
  starts and sales of existing homes,  consumer  confidence,  trends in disposable
  income, and general economic conditions.  Decreases in these economic indicators
  could have a negative effect on the company's business and prospects.  Likewise,
  increases in interest rates,  particularly home mortgage rates, and increases in
  consumer  debt or the  general  rate of  inflation,  could  affect  the  company
  adversely.  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.  Finally,  unanticipated  delays or costs in  executing  restructuring
  actions could cause the cumulative  effect of  restructuring  actions to fail to
  meet the objectives set forth by management. Other factors that could affect the
  matters  discussed in  forward-looking  statements are included in the company's
  periodic reports filed with the Securities and Exchange Commission.
  CULP, INC.
                           Condensed Financial Highlights
                                     (Unaudited)
  Three Months Ended
                                                            -------------------------------
                                                              October 27,       October 28,
                                                                 2002              2001
                                                            --------------    -------------
  Net sales                                                 $   83,573,000    $  96,400,000
  Net income (loss)                                         $   (6,590,000)   $     857,000
  
  Basic and diluted net income (loss) per share             $       ($0.57)           $0.08
  Net income per share, diluted, excluding restructuring
    and related charges and goodwill amortization*          $         0.19    $        0.11
  
  Average shares outstanding:
    Basic                                                       11,483,000       11,221,000
    Diluted                                                     11,754,000       11,281,000
  
                                                                      Six Months Ended
                                                            -------------------------------
                                                              October 27,       October 28,
                                                                 2002              2001
                                                           ---------------   --------------
  Net sales                                                 $  169,461,000    $ 182,863,000
  Net loss                                                  $   (5,675,000)   $  (2,025,000)
  Cumulative effect of accounting change, net
     of income taxes                                           (24,151,000)             -0-
                                                            ---------------   --------------
  Net loss                                                  $  (29,826,000)   $  (2,025,000)
                                                            ===============   ==============
  
  Basic and diluted loss per share:
    Loss before cumulative effect of accounting change      $        (0.50)   $       (0.18)
    Cumulative effect of accounting change                           (2.11)            0.00
                                                            ---------------   --------------
    Net loss                                                $        (2.61)   $       (0.18)
                                                            ===============   ==============
  Net income per share, diluted, excluding restructuring
    and related charges, goodwill amortization
    and cumulative effect of accounting change**            $         0.27    $        0.00
  
  Average shares outstanding:
    Basic                                                       11,433,000       11,221,000
    Diluted                                                     11,778,000       11,281,000
  
  *  Excludes restructuring  and related charges of $14.5 million ($8.9 million or
     $0.77 per share diluted  after  taxes) for the second quarter of fiscal 2003.
     Excludes restructuring  and related charges of $0.2 million ($0.1 million, or
     $0.01 per share diluted,  after taxes) and goodwill amortization  of $350,000
     ($230,000, or $0.02 per share diluted, after taxes) for the second quarter of
     fiscal 2002.
  
  ** Excludes  cumulative  effect of accounting change,  net of income  taxes,  of
     $24.2  million  ($2.11 per share  diluted) for the first half of fiscal 2003.
     Excludes  restructuring and related charges of $14.5 million ($8.9 million or
     $0.78 per share  diluted, after  taxes)  for the first  half of fiscal  2003.
     Excludes restructuring and related charges of $2.5 million ($1.6 million,  or
     $0.15 per share diluted, after taxes) and goodwill  amortization  of $700,000
     ($460,000, or $0.04 per share  diluted,  after  taxes)  for the first half of
     fiscal 2002.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                      CONSOLIDATED STATEMENTS OF INCOME (LOSS)
   FOR THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 27, 2002 AND OCTOBER 28, 2001
  
                  (Amounts in Thousands, Except for Per Share Data)
  THREE MONTHS ENDED (UNAUDITED)
                                                  --------------------------------------------------------------------------
                                                            Amounts                                  Percent of Sales
                                                  -----------------------------                 ----------------------------
                                                   October 27,    October 28,       % Over
                                                      2002            2001         (Under)            2003          2002
                                                  --------------  -------------  -------------  -----------------  ---------
  Net sales                                     $        83,573         96,400      (13.3) %           100.0 %      100.0 %
  Cost of sales                                          69,830         80,858      (13.6) %            83.6 %       83.9 %
                                                  --------------  -------------  -------------  -----------------  ---------
     Gross profit                                        13,743         15,542      (11.6) %            16.4 %       16.1 %
  
  Selling, general and
    administrative expenses                               9,481         11,550      (17.9) %            11.3 %       12.0 %
  Restructuring expense                                  13,360              0      100.0  %            16.0 %        0.0 %
                                                  --------------  -------------  -------------  -----------------  ---------
     Income  (loss) from operations                      (9,098)         3,992     (127.9) %           (10.9)%        4.1 %
  
  Interest expense                                        1,676          1,963      (14.6) %             2.0 %        2.0 %
  Interest income                                          (121)           (34)     255.9  %            (0.1)%       (0.0)%
  Other expense (income), net                               242            765      (68.4) %             0.3 %        0.8 %
                                                  --------------  -------------  -------------  -----------------  ---------
     Income (loss) before income taxes                  (10,895)         1,298     (939.4) %           (13.0)%        1.3 %
  
  Income taxes  *                                        (4,305)           441   (1,076.2) %            39.5 %       34.0 %
                                                  --------------  -------------  -------------  -----------------  ---------
     Net Income (loss)                          $        (6,590)           857     (869.0) %            (7.9)%        0.9 %
                                                  ==============  =============  =============  =================  =========
  
  Net Income (loss) per share-basic                      ($0.57)         $0.08     (812.5) %
  Net Income (loss) per share-diluted                    ($0.57)         $0.08     (812.5) %
  Net income per share, diluted,
    excluding restructuring and related
    charges and goodwill amortization (see                $0.19          $0.11       72.7  %
    proforma statement on page 7)
  Average shares outstanding-basic                       11,483         11,221        2.3  %
  Average shares outstanding-diluted                     11,483         11,281        1.8  %
  
                                                                       SIX MONTHS ENDED (UNAUDITED)
                                                  -----------------------------------------------------------------------
                                                             Amounts                                  Percent of Sales
                                                  -----------------------------                 ----------------------------
                                                   October 27,    October 28,       % Over
                                                      2002            2001         (Under)             2003          2002
                                                  --------------  -------------  -------------  -----------------  ---------
  Net sales                                     $       169,461        182,863       (7.3) %           100.0 %      100.0 %
  Cost of sales                                         141,864        156,532       (9.4) %            83.7 %       85.6 %
                                                  --------------  -------------  -------------  -----------------  ---------
     Gross profit                                        27,597         26,331        4.8  %            16.3 %       14.4 %
  
  Selling, general and
    administrative expenses                              19,918         22,785      (12.6) %            11.8 %       12.5 %
  Restructuring expense                                  13,360          1,303      925.3  %             7.9 %        0.7 %
                                                  --------------  -------------  -------------  -----------------  ---------
     Income (loss) from operations                       (5,681)         2,243     (353.3) %            (3.4)%        1.2 %
  
  Interest expense                                        3,579          4,031      (11.2) %             2.1 %        2.2 %
  Interest income                                          (271)           (57)     375.4  %            (0.2)%       (0.0)%
  Other expense (income), net                               453          1,337      (66.1) %             0.3 %        0.7 %
                                                  --------------  -------------  -------------  -----------------  ---------
     Loss before income taxes                            (9,442)        (3,068)    (207.8) %            (5.6)%       (1.7)%
  
  Income taxes *                                         (3,767)        (1,043)    (261.2) %            39.9 %       34.0 %
                                                  --------------  -------------  -------------  -----------------  ---------
  Loss before cumulative effect of accounting
     change                                              (5,675)        (2,025)    (180.2) %            (3.3)%       (1.1)%
                                                                                                =================  =========
  Cumulative effect of accounting change,
     net of income taxes                                (24,151)             0
                                                  --------------  -------------
  
     Net loss                                   $       (29,826)        (2,025)
                                                  ==============  =============
  
  Basic loss per share:
     Loss before cumulative effect of
        accounting change                       $         (0.50)         (0.18)    (175.1) %
     Cumulative effect of accounting change               (2.11)          0.00     (100.0) %
                                                  --------------  -------------  ----------
     Net loss                                             (2.61)         (0.18)  (1,345.6) %
                                                  ==============  =============  ==========
  
  Diluted loss per share:
     Loss before cumulative effect of
       accounting change                        $         (0.50)         (0.18)     (175.1) %
     Cumulative effect of accounting change               (2.11)          0.00      (100.0) %
                                                  --------------  -------------  ----------
     Net loss                                             (2.61)         (0.18)   (1,345.6) %
                                                  ==============  =============  ==========
  
  Net income per share, diluted, excluding
     restructuring and related charges, goodwill
     amortization and cumulative effect of
     accounting change (see proforma statement on
     page 8)                                              $0.27          $0.00           N/A
  Average shares outstanding-basic                       11,433         11,221         1.9 %
  Average shares outstanding-diluted                     11,433         11,221         1.9 %
  
   *   Percent of sales column for income taxes is calculated as a % of income (loss) before income taxes.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                             CONSOLIDATED BALANCE SHEETS
               OCTOBER 27, 2002, OCTOBER 28, 2001, AND APRIL 28, 2002
                                      Unaudited
                               (Amounts in Thousands)
  Amounts                       Increase
                                              -------------------------------         (Decrease)
                                                October 27,      October 28,   -------------------------   * April 28,
                                                    2002            2001        Dollars     Percent          2002
                                               ---------------  -------------- ----------  -------------  ------------
  Current assets
     Cash and cash investments               $         35,037           8,590     26,447       307.9  %         31,993
     Accounts receivable                               32,869          49,402    (16,533)      (33.5) %         43,366
     Inventories                                       54,571          60,814     (6,243)      (10.3) %         57,899
     Other current assets                              15,944           9,851      6,093        61.9  %         13,413
                                               ---------------  -------------- ----------  -------------  ------------
                   Total current assets               138,421         128,657      9,764         7.6  %        146,671
  
  Property, plant & equipment, net                     85,049         105,697    (20,648)      (19.5) %         89,772
  Goodwill                                              9,240          47,781    (38,541)      (80.7) %         47,083
  Other assets                                          2,888           1,682      1,206        71.7  %          4,187
                                               ---------------  -------------- ----------  -------------  ------------
  
                   Total assets              $        235,598         283,817    (48,219)      (17.0) %        287,713
                                               ===============  ============== ==========  =============  ============
  
  Current liabilities
     Current maturities of long-term debt    $            462           3,136     (2,674)      (85.3) %          1,483
     Accounts payable                                  18,948          25,870     (6,922)      (26.8) %         24,327
     Accrued expenses                                  16,199          15,448        751         4.9  %         16,460
     Accrued restructuring                             10,065           1,748      8,317       475.8  %          2,445
                                               ---------------  -------------- ----------  ----------     ------------
                   Total current liabilities           45,674          46,202       (528)       (1.1) %         44,715
  
  Long-term debt                                       96,096         107,447    (11,351)      (10.6) %        107,001
  
  Deferred income taxes                                 3,502          10,330     (6,828)      (66.1) %         16,932
                                               ---------------  -------------- ----------  -------------  ------------
                   Total liabilities                  145,272         163,979    (18,707)      (11.4) %        168,648
  
  Shareholders' equity                                 90,326         119,838    (29,512)      (24.6) %        119,065
                                               ---------------  -------------- ----------  -------------  ------------
  
                   Total liabilities and
                   shareholders' equity      $        235,598         283,817    (48,219)      (17.0) %        287,713
                                               ===============  ============== ==========  =============  ============
  
  Shares outstanding                                   11,483          11,221        262         2.3  %         11,320
                                               ===============  ============== ==========  =============  ============
  
  *  Derived from audited financial statements.
  CULP,INC.
                            FINANCIAL INFORMATION RELEASE
                        CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE SIX MONTHS ENDED OCTOBER 27, 2002 AND OCTOBER 28, 2001
                                      Unaudited
                               (Amounts in Thousands)
  SIX MONTHS ENDED
                                                                         --------------------------
  
                                                                                  Amounts
                                                                         --------------------------
                                                                         October 27,   October 28,
                                                                            2002          2001
                                                                         ------------  ------------
  Cash flows from operating activities:
      Net loss                                                          $    (29,826)       (2,025)
      Adjustments to reconcile net loss to net cash
         provided by operating activities:
            Cumulative effect of accounting change, net of income taxes       24,151             0
            Depreciation                                                       7,139         8,871
            Amortization of intangible assets                                    219           785
            Amortization of stock based compensation                             105            39
            Restructuring expense                                             13,360         1,303
            Changes in assets and liabilities:
               Accounts receivable                                            10,497         8,447
               Inventories                                                     3,328          (817)
               Other current assets                                           (2,504)       (2,006)
               Other assets                                                     (202)          (17)
               Accounts payable                                               (6,894)        2,522
               Accrued expenses                                                    2           711
               Accrued restructuring                                          (1,546)       (1,778)
               Income taxes payable                                                0        (1,268)
                                                                         ------------  ------------
                  Net cash provided by operating activities                   17,829        14,767
                                                                         ------------  ------------
  Cash flows from investing activities:
      Capital expenditures                                                    (5,328)       (2,288)
                                                                         ------------  ------------
                  Net cash used in investing activities                       (5,328)       (2,288)
                                                                         ------------  ------------
  Cash flows from financing activities:
      Principal payments of long-term debt                                   (11,926)       (1,073)
      Change in accounts payable-capital expenditures                          1,515        (4,023)
      Proceeds from common stock issued                                          954             0
                                                                         ------------  ------------
                  Net cash used in financing activities                       (9,457)       (5,096)
                                                                         ------------  ------------
  
  Increase in cash and cash investments                                        3,044         7,383
  
  Cash and cash investments at beginning of period                            31,993         1,207
                                                                         ------------  ------------
  
  Cash and cash investments at end of period                           $      35,037         8,590
                                                                         ============  ============
  
  Free Cash Flow (1)                                                   $      14,016         8,456
                                                                         ============  ============
  
  (1)  Free Cash Flow is defined  as net cash provided by operating activities less capital expenditures
       plus or minus the change in accounts payable-capital expenditures
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL ANALYSIS
                                  OCTOBER 27, 2002
  FISCAL 02                                FISCAL 03
                                              ------------------     ------------------------------------------------  ---------------
                                                      Q2                  Q1                Q2           Q3      Q4         LTM (3)
                                              ------------------     ------------------------------------------------  ---------------
  INVENTORIES
     Inventory turns                                   5.4                  4.9              4.9
  
  RECEIVABLES
     Days sales in receivables                          47                   34               36
  
  WORKING CAPITAL
     Current ratio                                     2.8                  3.4              3.0
     Operating working capital turnover (2)            4.1                  4.7              4.8
     Operating working capital (2)                 $84,346              $70,762          $68,492
  
  PROPERTY, PLANT & EQUIPMENT
     Depreciation rate                                7.1%                 6.4%             6.5%
     Percent property, plant &
       equipment are depreciated                     58.1%                60.6%            61.5%
     Capital expenditures                           $4,729 (1)           $3,070           $2,258
  
  PROFITABILITY
     Net income (loss) per share (basic)             $0.08                $0.08 (5)      ($0.57)                           ($0.61) (5)
     Net income (loss) per share (diluted)           $0.08                $0.08 (5)      ($0.57)                           ($0.61) (5)
     Net income (loss) per share (diluted)           $0.11 (6)            $0.08 (5)        $0.19 (7)                         $0.69 (8)
     Return on average total capital                  4.3% (6)             3.6% (5)         6.8% (7)                          5.9% (8)
     Return on average equity                         4.0% (6)             3.1% (5)         9.4% (7)                          7.4% (8)
  
  LEVERAGE
     Total liabilities/equity                       136.8%               143.2%           160.8%
     Funded debt/equity                              92.3%                99.5%           106.9%
     Funded debt/capital employed                    48.0%                49.9%            51.7%
     Funded debt                                  $110,583              $96,533          $96,558
     Funded debt/EBITDA (LTM) (4)                     4.26                 2.71             2.67
  
  LEVERAGE ( NET OF CASH AND CASH INVESTMENTS) (9)
     Total liabilities/equity                         N/A                   N/A           122.0%
     Funded debt/equity                               N/A                   N/A            68.1%
     Funded debt/capital employed                     N/A                   N/A            40.5%
     Funded debt                                      N/A                   N/A          $61,521
     Funded debt/EBITDA (LTM) (4)                     N/A                   N/A             1.70
  
  OTHER
     Book value per share                           $10.68                $8.45            $7.87
     Employees at quarter end                        3,000                2,900            2,568
     Sales per employee (annualized)              $128,000             $116,163         $122,272
     Capital employed                             $230,421             $193,540         $186,884
     Effective income tax rate (10)                  34.0%                37.0%            37.0%
     EBITDA (4)                                     $8,315               $7,356           $8,810                           $36,096
     EBITDA/net sales (4)                             8.6%                 8.6%            10.5%                              9.8%
  
    (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, certain non-cash charges and cumulative effect of accounting change, as defined by the company's credit agreement
    (5) Excludes cumulative effect of accounting change made during first quarter fiscal 2003
    (6) Excludes restructuring and related charges of $0.2 million ($0.1 million or $0.01 per share diluted, after taxes). Also
        excludes goodwill amortization expense of $350,000 ($230,000 or $.02 per share diluted, after taxes)
    (7) Excludes restructuring and related charges of $14.5 million ($8.9 million or $.77 per share diluted, after taxes)
    (8) Excludes restructuring and related charges of $9.7 million ($5.8 million or $.51 per share diluted, after taxes) and $14.5
        million ($8.9 million or $0.78 per share diluted, after taxes) for the fourth quarter fiscal 2002 and second quarter fiscal
        2003, respectively, and $24.2 million cumulative effect of accounting change for the first quarter of fiscal 2003.  Also
        excludes goodwill amortization expense of $700,000 ($460,000 or $.04 per share diluted, after taxes) for the third and fourth
        quarters of fiscal 2002
    (9) The cash balance of $35.0 million has been excluded from total liabilities, funded debt and capital employed to arrive at
        the ratios in this section
   (10) Effective income tax rate excludes restructuring and related charges
  CULP, INC. FINANCIAL INFORMATION RELEASE
                      SALES / GROSS PROFIT BY SEGMENT/DIVISION
   FOR THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 27, 2002 AND OCTOBER 28, 2001
  
                               (Amounts in thousands)
  THREE MONTHS ENDED (UNAUDITED)
                                     ---------------------------------------------------------------------
  
                                                Amounts                           Percent of Total Sales
                                     -------------------------------              ------------------------
                                      October 27,      October 28,     % Over
  Segment/Division Sales                  2002            2001         (Under)       2003         2002
  ---------------------------------  ---------------  --------------  ----------  -----------  -----------
  Upholstery Fabrics
      Culp Decorative Fabrics      $         33,859          38,492   (12.0) %       40.5 %      39.9 %
      Culp Velvets/Prints                    23,305          30,354   (23.2) %       27.9 %      31.5 %
      Culp Yarn                               1,246           1,532   (18.7) %        1.5 %       1.6 %
                                     ---------------  --------------  ----------  -----------  -----------
                                             58,410          70,378   (17.0) %       69.9 %      73.0 %
  Mattress Ticking
       Culp Home Fashions                    25,163          26,022    (3.3) %       30.1 %      27.0 %
                                     ---------------  --------------  ----------  -----------  -----------
  
                                 * $         83,573          96,400   (13.3) %      100.0 %     100.0 %
                                     ===============  ==============  ==========  ===========  ===========
  
  Segment Gross Profit (1)                                                        Gross Profit Margin
  ---------------------------------                                               ------------------------
  
  Upholstery Fabrics               $          8,810           8,348     5.5  %       15.1 %      11.9 %
  Mattress Ticking                            6,093           7,350   (17.1) %       24.2 %      28.2 %
                                     ---------------  --------------  ----------  -----------  -----------
  
                                   $         14,903          15,698    (5.1) %       17.8 %      16.3 %
                                     ===============  ==============  ==========  ===========  ===========
  
                                                         SIX MONTHS ENDED (UNAUDITED)
                                     ---------------------------------------------------------------------
  
                                                Amounts                           Percent of Total Sales
                                     -------------------------------              ------------------------
                                      October 27,      October 28,     % Over
  Segment/Division Sales                  2002            2001         (Under)       2003         2002
  ---------------------------------  ---------------  --------------  ----------  -----------  -----------
  
  Upholstery Fabrics
      Culp Decorative Fabrics      $         68,590          73,652    (6.9) %       40.5 %      40.3 %
      Culp Velvets/Prints                    46,424          55,875   (16.9) %       27.4 %      30.6 %
      Culp Yarn                               3,346           2,498    33.9  %        2.0 %       1.4 %
                                     ---------------  --------------  ----------  -----------  -----------
                                            118,360         132,025   (10.4) %       69.8 %      72.2 %
  Mattress Ticking
       Culp Home Fashions                    51,101          50,838     0.5  %       30.2 %      27.8 %
                                     ---------------  --------------  ----------  -----------  -----------
  
                                 * $        169,461         182,863    (7.3) %      100.0 %     100.0 %
                                     ===============  ==============  ==========  ===========  ===========
  
  Segment Gross Profit (1)                                                        Gross Profit Margin
  ---------------------------------                                               ------------------------
  
  Upholstery Fabrics               $         16,811          13,866    21.2  %       14.2 %      10.5 %
  Mattress Ticking                           11,946          13,599   (12.2) %       23.4 %      26.7 %
                                     ---------------  --------------  ----------  -----------  -----------
  
                                   $         28,757          27,465      4.7 %       17.0 %      15.0 %
                                     ===============  ==============  ==========  ===========  ===========
  
  * U.S.  sales were $72,362 and $82,280 for the second quarter of fiscal 2003 and
   fiscal 2002,  respectively;  and  $147,827  and  $154,079 for the six months of
   fiscal 2003 and 2002, respectively.  The percentage  decrease in U.S. sales was
   12.1% for the second quarter and a decrease of 4.1% for the six months.
  
  (1) Excludes  restructuring related charges of $1.2 million and $0.2 million for
      the second  quarter of  fiscal 2003  and 2002,  respectively;  and  excludes
      $1.2 million for the first six months of fiscal 2003 and 2002.
  CULP, INC. FINANCIAL INFORMATION RELEASE
                       INTERNATIONAL SALES BY GEOGRAPHIC AREA
   FOR THE THREE MONTHS AND SIX MONTHS ENDED OCTOBER 27, 2002 AND OCTOBER 28, 2001
  (Amounts in thousands)
  
                                                  THREE MONTHS ENDED (UNAUDITED)
                                           ---------------------------------------------
  
                                                      Amounts
                                           ------------------------------
                                            October 27,     October 28,      % Over
             Geographic Area                   2002            2001         (Under)
  --------------------------------------   --------------  --------------  -----------
  North America (Excluding USA)         $          8,424           8,379      0.5  %
  Europe                                             138             938    (85.3) %
  Middle East                                        760           1,311    (42.0) %
  Far East & Asia                                  1,652           2,891    (42.8) %
  South America                                      171             177     (3.7) %
  All other areas                                     66             424    (84.4) %
                                           --------------  --------------  -----------
  
                                        $         11,211          14,120    (20.6) %
                                           ==============  ==============  ===========
  
                 Percent of total sales            13.4%           14.6%
  
                                                   SIX MONTHS ENDED (UNAUDITED)
                                           ---------------------------------------------
  
                                                      Amounts
                                           ------------------------------
                                            October 27,     October 28,      % Over
             Geographic Area                   2002            2001         (Under)
  --------------------------------------   --------------  --------------  -----------
  North America (Excluding USA)         $         15,974          16,410     (2.7) %
  Europe                                             261           1,643    (84.1) %
  Middle East                                      1,647           4,214    (60.9) %
  Far East & Asia                                  2,983           5,483    (45.6) %
  South America                                      414             336     23.1  %
  All other areas                                    355             698    (49.1) %
                                           --------------  --------------  -----------
  
                                        $         21,634          28,784    (24.8) %
                                           ==============  ==============  ===========
  
                 Percent of total sales            12.8%           15.7%
  
  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%) and fiscal 2002 - $53,501 (14%).
  CULP, INC.
                  PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
          FOR THE THREE MONTHS ENDED OCTOBER 27, 2002 AND OCTOBER 28, 2001
                  (Amounts in Thousands, Except for Per Share Data)
  THREE MONTHS ENDED (UNAUDITED)
                                          --------------------------------------------------------------------------------------------
                                         As Reported                   October 27, 2002          October 28, 2001
                                         October 27,  Reclassification   Proforma Net   % of       Proforma Net    % of       % Over
                                            2002       & Adjustments   of Adjustments  Net Sales  of Adjustments  Net Sales   (Under)
                                         ------------  -------------    ----------------------    -----------------------    ---------
  Net sales                              $     83,573             0             83,573  100.0%          96,400   100.0%        -13.3%
  Cost of sales                                69,830        (1,160) (3)        68,670   82.2%          80,702    83.7% (6)    -14.9%
                                         ------------  -------------    ----------------------    -----------------------    ---------
          Gross profit                         13,743        (1,160)            14,903   17.8%          15,698    16.3%         -5.1%
  
  Selling, general and
    administrative expenses                     9,481             0              9,481   11.3%          11,550    12.0%        -17.9%
  Restructuring expense                        13,360       (13,360) (4)             0    0.0%               0     0.0%          0.0%
                                         ------------  -------------    ----------------------    -----------------------    ---------
          Income  (loss) from                  (9,098)      (14,520)             5,422    6.5%           4,148     4.3%         30.7%
          operations
  
  Interest expense                              1,676             0              1,676    2.0%           1,963     2.0%        -14.6%
  Interest income                                (121)            0               (121)  -0.1%             (34)    0.0%        255.9%
  Other expense (income), net                     242             0                242    0.3%             414     0.4% (7)    -41.5%
                                         ------------  -------------    ----------------------    -----------------------    ---------
          Income (loss) before income         (10,895)      (14,520)             3,625    4.3%           1,805     1.9%        100.8%
          taxes
  
  Income taxes  (1)                            (4,305)       (5,646)             1,341   37.0%             614    34.0% (2)    118.6%
                                         ------------  -------------    ----------------------    -----------------------    ---------
  Net income (loss)                      $     (6,590)       (8,874)             2,284    2.7%           1,191     1.2%         91.7%
                                         ============  =============    ======================    =======================    =========
  
  Net income (loss) per share-basic            ($0.57)       ($0.77)             $0.20                   $0.11
  Net income (loss) per share-diluted          ($0.57)       ($0.77)             $0.19                   $0.11
  Average shares outstanding-basic             11,483        11,483             11,483                  11,221
  Average shares outstanding-diluted           11,483        11,483             11,754 (5)              11,281
  
  Notes:
   (1) Percent of net sales column for income taxes is calculated as a % of income (loss) before income taxes
   (2) Pre-restructuring income tax rate was 37% and 34% for the second quarter of fiscal 2003 and 2002, respectively.
   (3) The $1.2 million represents restructuring related charges for inventory markdowns and movement of equipment
   (4) The $13.4 million represents restructuring charges for the shut down of the Chattanooga operation, $12.1 million, and the
       additional write-down of wet printed assets held for sale, $1.3 million
   (5) Incremental shares of 271,000 for fiscal 2003 included in fully diluted calculation
   (6) Excludes CDF and CYN restructuring related charges of $.2 million ($0.01 million or $.01 per share diluted, after taxes)
   (7) Excludes $350,000 ($230,000 or $0.02 per share diluted, after taxes) of goodwill amortization
  PROFORMA CONSOLIDATED STATEMENTS OF INCOME (LOSS)
           FOR THE SIX MONTHS ENDED OCTOBER 27, 2002 AND OCTOBER 28, 2001
                  (Amounts in Thousands, Except for Per Share Data)
  SIX MONTHS ENDED
                                          --------------------------------------------------------------------------------------------
  
                                      As Reported                   October 27, 2002             October 28, 2001
                                      October 27,  Reclassification  Proforma Net      % of       Proforma Net       % of     % Over
                                         2002       & Adjustments   of Restructuring  Net Sales  of Restructuring  Net Sales  (Under)
                                      ------------  -------------     ----------------------      -----------------------    ---------
  Net sales                           $    169,461             0           169,461    100.0%        182,862        100.0%        -7.3%
  Cost of sales                            141,864        (1,160) (3)      140,704     83.0%        155,397         85.0% (6)    -9.5%
                                      ------------  -------------     ----------------------      -----------------------    ---------
          Gross profit                      27,597        (1,160)           28,757     17.0%         27,465         15.0%         4.7%
  
  Selling, general and
    administrative expenses                 19,918             0            19,918     11.8%         22,785         12.5%       -12.6%
  Restructuring expense                     13,360       (13,360) (4)            0      0.0%              0          0.0% (6)     0.0%
                                      ------------  -------------     ----------------------      -----------------------    ---------
          Income  (loss) from               (5,681)      (14,520)            8,839      5.2%          4,680          2.6%        88.9%
          operations
  
  Interest expense                           3,579             0             3,579      2.1%          4,031          2.2%       -11.2%
  Interest income                             (271)            0              (271)    -0.2%            (57)         0.0%       375.4%
  Other expense (income), net                  453             0               453      0.3%            637          0.3% (7)   -28.9%
                                      ------------  -------------     ----------------------      -----------------------     --------
          Income (loss) before income       (9,442)      (14,520)            5,078      3.0%             69          0.0%         N/A
          taxes
  
  Income taxes  (1)                         (3,767)       (5,646)            1,879     37.0%             23         34.0% (2)     N/A
                                      ------------  -------------     ----------------------      -----------------------    ---------
  Income (loss) before cumulative
  effect of accounting change        $      (5,675)       (8,874)            3,199      1.9%             46          0.0%         N/A
                                      ============  =============     ======================      =======================    =========
  
  Net income (loss) per share-basic         ($0.50)       ($0.78)            $0.28                    $0.00
  Net income (loss) per share-diluted       ($0.50)       ($0.78)            $0.27                    $0.00
  Average shares outstanding-basic          11,433        11,433            11,433                   11,221
  Average shares outstanding-diluted        11,433        11,433            11,778 (5)               11,281
  
  Notes:
   (1) Percent of net sales column for income taxes is calculated as a % of income (loss) before income taxes.
   (2) Pre-restructuring income tax rate was 37% and 34% for the first six months of fiscal 2003 and 2002, respectively.
   (3) The $1.2 million represents restructuring related charges for inventory markdowns and movement of equipment
   (4) The $13.4 million represents restructuring charges for the shut down of the Chattanooga operation, $12.1 million, and the
       additional write-down of wet printed assets held for sale, $1.3 million
   (5) Incremental shares of 345,000 included in fully diluted calculation
   (6) $1.2 million ($.8 million or $0.07 per share diluted, after taxes)of CDF and CYN restructuring related charges are excluded
       from the cost of sales total; and $1.3 million ($.9 million or $0.07 per share diluted, after taxes) in CDF  and CYN
       restructuring charges are excluded to arrive at the proforma amounts
   (7) Excludes $700,000 ($460,000 or $0.04 per share diluted, after taxes) of goodwill amortization
  CULP, INC. FINANCIAL INFORMATION RELEASE
                                 FINANCIAL NARRATIVE
      for the three and six months ended October 27, 2002 and October 28, 2001
  
  OVERVIEW
  
       GENERAL  - For the  second  quarter,  net  sales  decreased  13.3% to $83.6
  million;  and the company  reported  net  income,  excluding  restructuring  and
  related charges,  of $2.3 million,  or $0.19 per share diluted versus net income
  of $1.2  million,  or $0.11 per share  diluted in the  second  quarter of fiscal
  2002, excluding  restructuring and related charges,  and goodwill  amortization.
  The company reported further improvement in its balance sheet by reducing funded
  debt by $12.0  million  during  the first  half of fiscal  2003 and  ending  the
  quarter with $35.0 million in cash and cash investments.
  
       ADOPTION OF SFAS No. 142 - As of April 29, 2002, Culp adopted SFAS No. 142,
  "Goodwill and Other Intangible  Assets." As a result the company recorded during
  the first quarter of fiscal 2003 a non-operating,  non-cash goodwill  impairment
  charge of $37.6  million  ($24.2  million  net of taxes of $13.4),  or $2.11 per
  share  diluted,  related to the  goodwill  associated  with the Culp  Decorative
  Fabrics division.
  
       PROFORMA  CONSOLIDATED  STATEMENTS  OF  INCOME  (LOSS) -- The  company  has
  included,  within this financial information release, proforma income statements
  which reconcile the reported  income  statements  with proforma  results,  which
  exclude restructuring and related charges,  goodwill amortization and cumulative
  effect of  accounting  change.  See PROFORMA  CONSOLIDATED  STATEMENTS OF INCOME
  (LOSS) on pages 7 and 8 of this financial information release.
  
       RESTRUCTURING  AND RELATED  CHARGES-- The financial  results for the second
  quarter include a total of $14.5 million in  restructuring  and related charges,
  all of which reflect previously announced restructuring initiatives. The charges
  are made up of the  following:  (1)  $12.1  million  of  restructuring  expenses
  related to the Culp Decorative  Fabrics ("CDF")  division,  the largest items of
  which are lease  termination  expenses and personnel  costs; (2) $1.2 million of
  'restructuring  related" costs for CDF, which include  inventory  mark-downs and
  equipment moving expense; and (3) $1.3 million of restructuring expenses related
  to further  write-downs  of equipment in  connection  with the exit from the wet
  printed  flock  business  by  the  Culp  Velvets/Prints  ("CVP")  division.  The
  additional  write down,  which is a non cash item,  was recorded to more closely
  estimate the current  market  value of this  equipment,  which has  continued to
  deteriorate since April 2002. Of the charges related to CDF,  approximately $3.9
  million are non-cash  items,  while the remaining  $9.4 million  relates to cash
  expenditures.  As  reflected  in the  financial  statements,  restructuring  and
  related  charges were recorded as $13.4 million in the line item  "restructuring
  expense"  and $1.2  million in "cost of sales" and have  reduced  net income per
  share by $0.77 for the second quarter of fiscal 2003.
  
  The  restructuring  and  related  charges  for  CDF  reflect  the  restructuring
  initiative announced in August 2002. This initiative was substantially completed
  by the end of the second quarter. In fact, the company is well ahead of schedule
  in completing the most important elements of the plan as announced.  The company
  continues  to  expect  that the CDF  restructuring  actions  will  significantly
  improve gross margins  within the division,  while  allowing the ability to meet
  foreseeable  levels of demand,  all on a  substantially  lower  cost  base.  The
  initiative is projected to result in annual cost savings of approximately $12 to
  $15  million.  Approximately  $8  million  of  these  savings  relate  to  fixed
  manufacturing  costs and the  remaining  $4 to $7  million  relate  to  variable
  manufacturing costs.
  
  Specifically,  the company  completed  the shut down of its  operations at CDF's
  Chattanooga,  Tennessee facility at the end of the second quarter,  while it was
  originally  contemplated that this process could take until the end of the third
  quarter.  All of the  operations  have been  successfully  transferred  to CDF's
  Pageland,  South Carolina and Graham,  North Carolina plants.  In addition,  the
  consolidation of the finishing, yarn-making and distribution operations from the
  Chattanooga facility to other CDF plants has been completed,  with each of those
  transitions  taking place ahead of the targeted  completion dates.  There are no
  manufacturing operations remaining at the Chattanooga plant as of the end of the
  second quarter.
  
  The remaining elements from the CDF restructuring initiative to be completed are
  as follows:  (1) achieve  targeted levels of operating  efficiency for the looms
  transferred  into  Pageland,  which is  projected  to take  until the end of the
  fourth quarter; (2) transfer certain equipment to other CDF plants by the end of
  this fiscal year; and (3) complete the capital  expenditure  projects related to
  the restructuring.
  
  The announced addition to the Pageland plant is currently under construction and
  is  expected to be ready for  occupancy  in early  2003.  The  company  plans to
  install ten new high speed  weaving  machines in the  building  during the third
  quarter.  These new machines will replace lower speed  equipment  that is now in
  place at the Pageland  plant,  thereby  further  increasing  the  efficiency and
  output of that facility's operations.
  
  Another  important  element  of the  CDF  restructuring  initiative  is a  major
  reduction in the complexity of the dobby upholstery  product line, which has led
  to the elimination of approximately  1,500 low volume stock keeping units (SKUs)
  representing  about 70% of the  finished  goods  SKUs (but only 10% of sales) in
  that product  category.  This initiative is substantially  complete and has been
  accomplished without significant disruptions of customer relationships.
  
  In line with previous estimates,  the CDF restructuring is expected to result in
  total  restructuring  and related  charges of  approximately  $15  million.  The
  company currently  estimates that this  restructuring  will result in additional
  charges of approximately $1.3 million during the second half of the fiscal year,
  most of which will relate to equipment moving costs.
  
  INCOME STATEMENT COMMENTS
  
      UPHOLSTERY FABRIC SEGMENT
  
       NET SALES - Upholstery  fabric sales for the second  quarter of fiscal 2003
  decreased  17.0% to $58.4  million  (see sales by  Segment/Division  on page 5).
  Domestic upholstery fabric sales decreased 13.9% to $51.4 million, due primarily
  to overall weakness in consumer demand for upholstered furniture.  International
  sales decreased  34.3% to $7.0 million,  due primarily to the exiting of the wet
  printed flock fabric business in April 2002.
  
  In addition to significant  overall  softness in demand during the quarter,  the
  sales decrease in upholstery fabrics is partially  attributable to the company's
  strategy to focus on improving the profitability of its sales mix by reducing or
  eliminating  products generating little or no profit. In the Culp Velvets/Prints
  division,  the company  discontinued its unprofitable wet printed flock business
  at the end of last fiscal year.  This product  line  reported  annual sales last
  year of  approximately  $17 million with  approximately  $2 million in operating
  losses. In the CDF division, the company discontinued about half of its finished
  goods SKUs (or  approximately  10,000)  over the last  year,  most of which were
  small  volume  items and were very costly to produce.  These  discontinued  SKUs
  include the dobby product line SKUs that were recently eliminated as part of the
  Chattanooga  restructuring.  The company expects this process of identifying and
  dropping  its low profit  items to  continue  through the balance of this fiscal
  year.
  
  The company believes  additional  factors that are likely  impacting  upholstery
  fabric sales are (1) the increasing market share of leather furniture being sold
  in the U.S.; and (2) the increase in imported fabrics, both in "piece goods" and
  "cut and sewn kits".
  
       GROSS  PROFIT - In  spite  of weak  furniture  demand  and the  significant
  operational  disruption in connection  with the Chattanooga  restructuring,  the
  upholstery  fabric  segment  improved  its gross  profit  dollars  and  margins.
  Excluding restructuring related charges of $1.2 million and $0.2 million for the
  second quarter of fiscal 2003 and 2002,  respectively,  gross profit dollars and
  margin increased in the second quarter of fiscal 2003 to $8.8 million and 15.1%,
  respectively,  from $8.3  million and 11.9% in the second  quarter of last year.
  The key factors  behind these gains were: (1) a more  profitable  sales mix; (2)
  the  elimination  of losses related to the wet printed flock  business;  (3) the
  increasing  productivity benefits from the CDF 2001 restructuring;  and (4) some
  cost reduction benefits from the Chattanooga closure.
  
  With the  earlier-than-expected  cost  reduction  benefits  as a  result  of the
  Chattanooga  closure  being  completed  by the end of the  second  quarter,  the
  company is optimistic that gross profit dollars and margins in CDF will continue
  to improve over the next few quarters.  Additionally  within CDF, the company is
  focused on (1) creating and selling products with better margins; (2) continuing
  to reduce low profit SKUs; and (3) improving  manufacturing  performance in CDF,
  in terms of productivity and inventory obsolescence.
  
      MATTRESS TICKING SEGMENT
  
       NET SALES - Mattress  fabric  sales for the second  quarter of fiscal  2003
  decreased 3.3% to $25.2 million.  Sales to U.S. bedding  manufacturers fell 7.1%
  to $21.0 million,  while sales to international  customers increased by 21.4% to
  $4.2  million.  The sales  decrease is due to the  overall  weakness in consumer
  demand for mattresses.
  
       GROSS  PROFIT--Culp  Home Fashions (CHF) reported for the second quarter of
  fiscal 2003 lower gross  profit  dollars and margins of $6.1  million and 24.2%,
  respectively,  both down from $7.3  million and 28.2%  during the  corresponding
  quarter of the prior year.  The key factors  impacting  gross profit were a high
  cost European sourcing  agreement and lower sales. CHF entered into an agreement
  with a European  supplier  last fall as part of the  termination  of a long-term
  supply  relationship.  The  agreement  provided,  among other  things,  that the
  company maintain a certain level of weekly  purchases  through October 31, 2002.
  Therefore,  for the first and second quarters of this year, the company has been
  required to source  products  from this  supplier  that are  significantly  more
  expensive than products  manufactured  at the company's U.S. and Canadian plants
  in order to meet the  agreement's  minimum  purchase  levels.  The  company  had
  planned during the last fiscal year for the termination of this supply agreement
  by  initiating  a plan to increase  capacity  in the U.S.  and  Canadian  plants
  beginning  in the first  quarter  and ending by  December  2002.  This  capacity
  expansion  project  accounts for  approximately  $4.5  million of the  company's
  fiscal 2003  capital  spending  plan.  This supply  agreement  was  concluded on
  October 31, 2002 and only a few  additional  containers  of product  will arrive
  during the third quarter. There is potential for some residual effect on profits
  during the third  quarter from the supply  agreement as the division  works down
  its inventory position of these products.
  
       SG&A EXPENSES - SG&A expenses for the second quarter declined $2.1 million,
  or 17.9%,  from the prior  year,  and as a percent of net sales,  SG&A  expenses
  declined to 11.3% from 12.0%. SG&A expenses in the second quarter included a net
  reduction of $424,000 in the allowance for doubtful accounts, due to a reduction
  in past due balances. This compares with bad debt expense of $1.4 million in the
  year-earlier period.
  
       INTEREST EXPENSE (INCOME)- Interest expense for the second quarter declined
  to  $1.7  million  from  $2.0  million  due to  significantly  lower  borrowings
  outstanding,  offset somewhat by an increase in the interest rate on the private
  placement  debt.  Interest  income  increased  to $121,000  from  $34,000 due to
  significantly higher invested cash as compared with the prior year.
  
       OTHER EXPENSE (INCOME), NET - Other expense (income) for the second quarter
  of fiscal 2003 totaled  $242,000  compared with $765,000 in the prior year.  The
  decrease was principally due to the adoption of SFAS No. 142, which discontinued
  the amortization of goodwill. Goodwill amortization during second quarter fiscal
  2002 was $350,000.
  
       INCOME TAXES - Excluding  the  cumulative  effect of accounting  change and
  restructuring and related charges,  the effective tax rate for the first half of
  fiscal 2003 was 37% compared with 34% for the year earlier period.
  
       EBITDA - EBITDA for the  second  quarter  of fiscal  2003 was $8.8  million
  compared with $8.3 million in the prior year.  EBITDA  includes  earnings before
  interest,  income  taxes,  depreciation,  amortization,  all  restructuring  and
  related charges,  certain  non-cash charges and cumulative  effect of accounting
  change, as defined by the company's credit agreement.
  
  BALANCE SHEET COMMENTS
  
       CASH AND CASH  INVESTMENTS  - Cash and cash  investments  as of October 27,
  2002  increased to $35.0  million from $32.0  million at the end of fiscal 2002,
  reflecting  cash flow from  operations  of $17.8  million  for the first half of
  fiscal 2003,  capital  expenditures  of $5.3  million,  debt  repayment of $12.0
  million,  stock issuance of $1.0 million and an increase in accounts payable for
  capital expenditures of $1.5 million.
  
       WORKING  CAPITAL - Accounts  receivable  as of October 27,  2002  decreased
  33.5%  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 October 27, 2002  compared with 47 a year
  ago and 36 at last  fiscal  year end.  Inventories  at the  close of the  second
  quarter decreased 10.3% from a year ago.  Inventory turns for the second quarter
  were 4.9 versus  5.4 for the  year-earlier  period.  Operating  working  capital
  (comprised of accounts  receivable,  inventory  and accounts  payable) was $68.5
  million at October 27, 2002, down from $84.3 million a year ago.
  
       PROPERTY,  PLANT AND  EQUIPMENT  - Capital  spending  for the first half of
  fiscal 2003 was $5.3 million. The company's original budget for capital spending
  for all of fiscal 2003 was $8.5  million,  compared  with $4.7 million in fiscal
  2002.  As part of the  fiscal  2003  restructuring  plan  in  CDF,  the  company
  increased  the budget by $4.5  million to $13.0  million.  Depreciation  for the
  second  quarter of fiscal 2003 totaled $3.5  million,  and is estimated at $14.0
  million for the full fiscal year.
  
       INTANGIBLE  ASSETS - As of October 27, 2002  goodwill in the amount of $9.2
  million is the company's only intangible asset. The company adopted SFAS No. 142
  on April  29,  2002.  During  the  first  quarter  of  fiscal  2003 the  company
  recognized  an impairment  charge of $37.6 ($24.2  million net of taxes of $13.4
  million) in accordance with SFAS No. 142.
  
       LONG-TERM  DEBT - As of the end of the  second  quarter,  the  company  had
  reduced  funded debt by $12.0  million  from last  fiscal year end.  Funded debt
  equals long-term debt plus current maturities.  Funded debt was $96.6 million at
  October 27,  2002,  compared  with $108.5  million at fiscal 2002 year end.  The
  company's funded debt-to-capital ratio was 51.7% at October 27, 2002.
  
       The company  also reports it leverage  statistics  in terms of funded debt,
  net of cash and cash investments,  under the assumption it could use the cash to
  repay  debt  at  any  time.  Therefore,  funded  debt,  net  of  cash  and  cash
  investments, is $61.5 million at October 27, 2002 compared with $76.5 million at
  fiscal 2002 year end. In addition,  the  company's  funded debt (net of cash and
  cash  investments)  to capital  employed ratio was 40.5% and funded debt (net of
  cash and cash investments) to EBITDA was 1.70. Since the end of fiscal 2000 (two
  and one half years), the company has substantially  reduced its funded debt (net
  of cash and cash  investments) to $61.5 million from $136.5 million,  a total of
  $75 million or 55%.
  
       The company  entered into a new loan agreement  during August 2002 with its
  principal  bank lender that  provides,  among other things,  for: (1) a two year
  $34.7 million credit facility,  which includes a $15.0 million  revolving credit
  line and $19.7  million  for  letters  of credit  for the  company's  industrial
  revenue bonds (IRB's), (2) lower interest rates based upon a pricing matrix, and
  (3)  improved  financial  covenants.  The  company  was in  compliance  with all
  convenants contained in its loan agreements as of October 27, 2002.
  
  FREE CASH FLOW COMMENTS
  
       Free cash flow, defined as cash from operations, less capital expenditures,
  plus or minus the change in  accounts  payable  capital  expenditure,  was $14.0
  million for the first six months of fiscal 2003  compared  with $8.5 million for
  the same period of the prior year.  The key  reasons for this  improvement  were
  continued  improvement  in  accounts  receivable  collections,  lower  inventory
  levels,  higher profits and the benefit from deferred  payment terms for capital
  expenditures.
  
  BUSINESS OUTLOOK
  
       For the third  quarter of fiscal 2003,  the company  believes  consolidated
  sales will decline somewhat less than the second quarter decrease of 13.3% while
  gross  profit  margins are  expected to improve  significantly  over last year's
  third quarter gross margin of 14.9%,  due primarily to the substantial  progress
  being made in the Culp Decorative  Fabrics division.  Additionally,  total SG&A,
  interest and other  expenses are expected to decline over $1.2  million,  absent
  any large unusual  items,  in the third quarter from a total of $13.3 million in
  the last year's third quarter.  Therefore,  with gross profit margin improvement
  and lower costs, the company is comfortable with the range of published analysts
  earnings  estimates of $0.11 to $0.15 per share for the third  quarter of fiscal
  2003,  excluding any restructuring and related charges. The net earnings for the
  third quarter of last year were $400,000, or $0.04 per share, excluding goodwill
  amortization.
  
       The company's financial results over the last few quarters and its business
  outlook clearly  demonstrate the company's strategic focus on: (1) improving the
  profitability  of its sales mix;  (2)  increasing  margins and return on capital
  employed; and (3) generating free cash flow.