UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 11-K Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2007 COMMISSION FILE NO. 0-12781 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: - -------------------------------------------------------------------------------- CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN - -------------------------------------------------------------------------------- B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: CULP, INC. 1823 EASTCHESTER DRIVE HIGH POINT, NORTH CAROLINA 27265 There were no material changes in the Plan or the Investment Policy of the Plan. Culp, Inc. has made no profit sharing contributions during the past five years. The number of participants in the Plan at December 31, 2007 was 670. The Retirement Committee administers the Plan, and its members are Franklin N. Saxon, Kenneth R. Bowling, and Teresa A. Huffman, all employees of Culp, Inc. Financial Statements and Exhibits. ---------------------------------- (a) Financial Statements. A list of all financial statements filed as part of this report, beginning on page 1, is set forth below: Financial Statements Page of Report -------------------- -------------- Report of Independent Registered 1 Public Accounting Firm Statements of Net Assets Available 2 for Benefits Statements of Changes in Net Assets 3 Available for Benefits Notes to Financial Statements 4
Schedule of Assets (Held at End of Year) 8 (b) Exhibit ------- Exhibit 23 - Consent of Independent Registered Public Accounting Firm SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the plan administrator has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN By: Culp, Inc., Plan Administrator By: The Culp, Inc. Retirement Committee Date: June 24, 2008 /s/ Franklin N. Saxon --------------------- Franklin N. Saxon /s/ Kenneth R. Bowling ---------------------- Kenneth R. Bowling /s/ Teresa A. Huffman --------------------- Teresa A. Huffman
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Retirement Committee of the Culp, Inc. Employees' Retirement Builder Plan High Point, North Carolina We have audited the accompanying statements of net assets available for benefits of the Culp, Inc. Employees' Retirement Builder Plan as of December 31, 2007 and 2006 and the related statements of changes in net assets available for benefits for each of the years in the three-year period ended December 31, 2007. These financial statements are the responsibility of the Plan Administrator. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Plan's internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Culp, Inc. Employees' Retirement Builder Plan as of December 31, 2007 and 2006 and the changes in its net assets available for plan benefits for each of the years in the three-year period ended December 31, 2007 in conformity with accounting principles generally accepted in the United States of America. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) at December 31, 2007 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. /s/ Dixon Hughes PLLC June 17, 2008 High Point, NC Page 1
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS December 31, 2007 and 2006 - ----------------------------------------------------------------------------------------------- ASSETS 2007 2006 --------------- --------------- Investments, at fair value (Note C) $26,546,680 $28,506,976 --------------- --------------- Receivables Employer contributions 45,566 52,992 Participant contributions 74,646 90,394 --------------- --------------- 120,212 143,386 --------------- --------------- NET ASSETS AVAILABLE FOR BENEFITS AT FAIR VALUE 26,666,892 28,650,362 Adjustment from fair value to contract value for fully benefit-responsive investment contracts 67,112 152,035 --------------- --------------- NET ASSETS AVAILABLE FOR BENEFITS $26,734,004 $28,802,397 =============== =============== See accompanying notes to the financial statements. Page 2
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS Years Ended December 31, 2007, 2006 and 2005 - ----------------------------------------------------------------------------------------------- 2007 2006 2005 --------------- --------------- ----------------- ADDITIONS TO NET ASSETS ATTRIBUTED TO Investment income Net appreciation in fair value of investments (Note C) $ 1,934,661 $ 3,066,735 $ 1,139,654 Contributions Employer 620,972 792,110 1,179,177 Participant 1,126,849 1,391,325 1,981,037 Direct rollovers 4,200 - - --------------- --------------- ----------------- TOTAL ADDITIONS 3,686,682 5,250,170 4,299,868 DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO Benefits paid to participants 5,755,075 10,646,900 10,563,653 --------------- --------------- ----------------- NET DECREASE (2,068,393) (5,396,730) (6,263,785) NET ASSETS AVAILABLE FOR BENEFITS Beginning of year 28,802,397 34,199,127 40,462,912 --------------- --------------- ----------------- End of year $ 26,734,004 $ 28,802,397 $ 34,199,127 =============== =============== ================= See accompanying notes to the financial statements. Page 3
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN NOTES TO FINANCIAL STATEMENTS December 31, 2007, 2006 and 2005 - -------------------------------------------------------------------------------- NOTE A - DESCRIPTION OF PLAN The following description of the Culp, Inc. Employees' Retirement Builder Plan (the "Plan") provides only general information. Participants should refer to the summary plan description for a more complete description of the Plan's provisions. General - ------- The Plan is a defined contribution plan covering all full-time employees of Culp, Inc. and its subsidiaries (the "Company") who have 3 months of service and are at least 21 years of age. Employees who elect to participate in the Plan may do so in the next available payroll period. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Contributions - ------------- Each year, participants may contribute from 2% of pretax annual compensation up to the maximum allowable amount, as defined in the Plan. Participants who have attained age 50 before the end of the Plan year are eligible to make catch-up contributions. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers various registered investment company funds, one common trust fund, and Culp, Inc. common stock as investment options for participants. The Company makes matching contributions equal to 100% of the participant's contribution up to the first 3% of annual compensation plus 50% of the next 2% of compensation contributed to the Plan which qualifies under safe harbor provisions. An employee who is eligible to participate in the Plan and does not affirmatively elect to decline participation or does not have a specified amount to be contributed to the Plan, the employee's compensation will be automatically reduced by 2% of compensation and contributed into the Plan. Contributions are subject to certain limitations. Additional profit sharing amounts may be contributed at the option of the Company. No profit-sharing contributions were made during the years ended December 31, 2007, 2006 or 2005. Participant Accounts - -------------------- Each participant's account is credited with the participant's contribution and an allocation of (a) the Company's contribution and (b) Plan earnings. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. Vesting - ------- Participants are immediately vested in their 401(k) contributions, including the matching contributions from the Company and actual earnings thereon. Payment of Benefits - ------------------- On termination of service due to death, disability, retirement, or other reasons, participants receive a lump-sum distribution equal to the value of the participant's vested interest in the Plan. Page 4
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN NOTES TO FINANCIAL STATEMENTS December 31, 2007, 2006 and 2005 - -------------------------------------------------------------------------------- NOTE B - SUMMARY OF ACCOUNTING POLICIES Use of Estimates - ---------------- The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and changes therein, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. Valuation of Investments and Income Recognition - ----------------------------------------------- The Plan's investments are stated at fair value. Quoted market prices are used to value investments. Shares of mutual funds are valued at the net asset value of shares held by the Plan at year-end. Investments in the common and collective trust funds are valued at unit values of the respective funds. Purchases and sales of investments are reported on a trade date basis. Income from investments is reported as earned on the accrual basis. Payment of Benefits - ------------------- Benefits are recorded when paid. Basis of Accounting - ------------------- The financial statements of the Plan are prepared under the accrual method of accounting. As described in Financial Accounting Standards Board ("FASB") issued FASB Staff Position AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined Contribution Health and Welfare and Pension Plans ("FSP"), investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attributable for that portion of the net assets available for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the plan. As required by the FSP, the Statement of Net Assets Available for Benefits presents the fair value of the investment contract, as well as the adjustment of the fully benefit-responsive investment contract from fair value to contract value. The Statement of Changes in Net Assets Available for Benefits is prepared on a contract value basis. Page 5
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN NOTES TO FINANCIAL STATEMENTS December 31, 2007, 2006 and 2005 - -------------------------------------------------------------------------------- NOTE C - INVESTMENTS The following presents investments that represent 5% or more of the Plan's net assets. 2007 2006 ---------------- ----------------- Investments at fair value as determined by quoted market price: Common and collective trust fund: MFS Fixed Fund * $ 6,901,213 $ 9,581,273 Registered investment company funds: MFS Value Fund * 4,644,905 4,616,195 MFS Total Return Fund * 3,227,610 3,667,498 MFS Core Growth Fund * 2,723,144 2,694,632 MFS International Diversification Fund * 2,035,523 1,653,616 JP Morgan U.S. Real Estate Fund ** 1,528,317 ----------------------------------------------------------------------------------------- * Indicates party-in-interest ** Less than 5% in 2007. The Plan's investments (including interest and dividends and gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value as follows: 2007 2006 2005 -------------- -------------- --------------- Common and collective trust funds $ 192,013 $ 398,816 $ 543,608 Registered investment company funds 1,243,562 2,577,285 1,190,881 Culp, Inc. common stock * 499,086 90,634 (594,835) -------------- -------------- --------------- $ 1,934,661 $ 3,066,735 $ 1,139,654 ============== ============== =============== * Indicates party-in-interest. NOTE D - PARTY-IN-INTEREST TRANSACTIONS Certain Plan investments are shares of common and collective trust funds and registered investment companies managed by MFS Investment Management. MFS Investment Management is a trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest. Certain Plan investments are shares of the Company's common stock. These transactions qualify as party-in-interest. NOTE E - PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event the Plan is terminated, each participant becomes fully vested and the net assets of the Plan will be allocated as prescribed by the Employment Retirement Income Securities Act of 1974 ("ERISA"). Page 6
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN NOTES TO FINANCIAL STATEMENTS December 31, 2007, 2006 and 2005 - -------------------------------------------------------------------------------- NOTE F - TAX STATUS The Internal Revenue Service has determined and informed the Company by a letter dated November 4, 2002, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code. Although the Plan has been amended since receiving the determination letter, the Plan administrator and the Plan's tax counsel believe that the Plan is designed and currently being operated in compliance with the applicable requirements of the Internal Revenue Code. NOTE G - RISKS AND UNCERTAINTIES The Plan invests in various investment securities. Investment securities are exposed to various risks, such as interest rate, market, and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that changes could materially affect the participants' account balances and the amounts reported in the statement of net assets available for benefits. Page 7
SUPPLEMENTAL INFORMATION
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR) EIN: 56-1001967 PLAN NUMBER 001 December 31, 2007 - ------------------------------------------------------------------------------------------------------- (e) Current (a) (b) Borrower, Lessor or Similar Party (c) Description of Investment (d) Cost ** Value - ---- -------------------------------------- ----------------------------- ------------ ------------- * MFS Fixed Fund 6,901,213 units - $6,901,213 * MFS Value Fund 175,081 units - 4,644,905 * MFS Total Return Fund 211,785 units - 3,227,610 * MFS Core Growth Fund 130,294 units - 2,723,144 * MFS International Diversification Fund 128,831 units - 2,035,523 JP Morgan U.S Real Estate Fund 70,726 units - 1,208,703 Federated Kaufman Fund 192,271 units - 1,197,845 Oppenheimer Main St. Small Cap Fund 51,439 units - 1,014,380 Calvert Income Fund 56,421 units - 932,642 * MFS New Endeavor Fund 77,439 units - 797,626 * MFS Growth Allocation Fund 21,218 units - 319,115 * MFS Aggressive Growth Allocation Fund 8,395 units - 134,073 * MFS Conservative Allocation Fund 7,218 units - 88,560 * MFS Money Market Fund 67,866 units - 67,866 * MFS Moderate Allocation Fund 66 units - 901 * Culp, Inc. Common Stock 189,610 shares - 1,319,686 ------------- $26,613,792 ============= * Indicates party - in - interest ** Cost information omitted for participant-directed investments. Page 8
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Retirement Committee of the
Culp, Inc. Employees' Retirement Builder Plan
High Point, North Carolina
We consent to the incorporation by reference in the registration statement (No.
33-13310) on Form S-8 of the Culp, Inc. Employees' Retirement Builder Plan of
our report dated June 17, 2008 which report is included herein.
/s/ Dixon Hughes PLLC
High Point, North Carolina
June 17, 2008