FORM 11K SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 ANNUAL REPORT Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the period from January 1, 1995 to December 31, 1995 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. 101 SOUTH MAIN STREET P.O. BOX 2686 HIGH POINT, NORTH CAROLINA 27261-2686 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 approximate number of employees participating in the Plan at December 31, 1995 was 2,045. The Retirement Committee administers the Plan, and its members are Franklin N. Saxon, Kenneth M. Ludwig and Robert G. Culp, III, 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 Statement Page of Report Report of Independent Auditors 1 Statements of Net Assets Available 2 for Plan Benefits Statements of Changes in Net Assets 3 Available for Plan Benefits Notes to Financial Statements 4 (b) Exhibits. No exhibits are filed with this annual report. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the plan administrator has duly caused this annual report to be signed by the undersigned thereunto duly authorized. CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN By: Culp, Inc. Plan Administrator By: The Culp, Inc. Retirement Committee Date: June 26, 1996 Robert G. Culp, III Franklin N. Saxon Kenneth M. Ludwig (DIXON, ODOM & CO., L.L.P. LETTERHEAD) INDEPENDENT AUDITORS' REPORT 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 plan benefits of the Culp, Inc. Employees' Retirement Builder Plan as of December 31, 1995 and 1994 and the related statements of changes in net assets available for plan benefits for each of the years in the three year period ended December 31, 1995. 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 generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes 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 financial position of the Culp, Inc. Employees' Retirement Builder Plan as of December 31, 1995 and 1994 and the changes in net assets available for plan benefits for each of the years in the three year period ended December 31, 1995 in conformity with generally accepted accounting principles. Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules presented on pages 11 through 14 are presented for the purpose of additional analysis and are not a required part of the basic financial statements. The supplemental schedules on pages 11 and 12 are 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. The supplementary information for the years ended December 31, 1995, 1994 and 1993 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. The supplementary information for the years ended December 31, 1991, 1990 and 1989 was audited by us and our report dated February 24, 1992 expressed an unqualified opinion on such information in relation to the basic financial statements for those years taken as a whole. The supplementary information for the periods ended December 31, 1988 and prior were audited by other auditors whose report dated April 7, 1989 expressed an unqualified opinion on such information in relation to the basic financial statements for those periods taken as a whole. (Signature of Dixon, Odom & Co., L.L.P.) MARCH 15, 1996 ------------- Page 1 CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS DECEMBER 31, 1995 AND 1994 See accompanying notes. Page 2
ASSETS 1995 1994 --------------- ---------- Investments, at fair value $ 16,746,261 $ 13,589,467 Receivables Employer contributions 67,250 69,747 Employee contributions 160,890 166,447 --------------- ---------------- TOTAL ASSETS 16,974,401 13,825,661 LIABILITIES Accounts payable 1,470 14,517 --------------- ---------------- NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 16,972,931 $ 13,811,144 =============== ================ CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 See accompanying notes. Page 3
1995 1994 1993 -------------- -------------- --------- ADDITIONS TO NET ASSETS ATTRIBUTED TO Net income (loss) from investment in a common trust $ 1,657,794 $ 353,139 $ 627,474 Appreciation (depreciation) in fair value of Culp, Inc. Stock Fund 285,027 (909,365) 1,721,339 Dividend income from Culp, Inc. Stock Fund 25,344 14,684 10,821 Interest income from Culp, Inc. Stock Fund 194 5,629 2,643 Contributions Employer 801,452 773,080 596,836 Employees 1,922,941 1,851,363 1,395,843 -------------- -------------- -------------- TOTAL ADDITIONS 4,692,752 2,088,530 4,354,956 -------------- -------------- -------------- DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO Benefits paid to participants 1,459,844 1,074,390 926,870 Insurance 9,425 11,353 13,748 Trustee fees 61,696 67,014 68,921 -------------- -------------- -------------- TOTAL DEDUCTIONS 1,530,965 1,152,757 1,009,539 -------------- -------------- -------------- NET INCREASE 3,161,787 935,773 3,345,417 NET ASSETS AVAILABLE FOR PLAN BENEFITS Beginning of year 13,811,144 12,875,371 9,529,954 -------------- -------------- -------------- END OF YEAR $ 16,972,931 $ 13,811,144 $ 12,875,371 ============== ============== ============== CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN NOTES TO FINANCIAL STATEMENTS NOTE A - SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The financial statements of the Plan are prepared using the accrual method of accounting. Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires the plan administrator to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. Valuation of Investments Investments in common trust funds are stated at fair value based on the values of the respective instruments held by each fund as determined by the quoted market prices on the last day of the plan year. Investments in common stocks are stated at fair value as determined by the quoted market prices on the last day of the plan year. The cost of securities sold is determined based on average cost. Allocated Insurance Contracts Assets related to life insurance purchased through the Plan are excluded from plan assets. Other Purchases and sales of investments are reported on a trade date basis. Income from investments is reported as earned on the accrual basis. NOTE B - DESCRIPTION OF PLAN The following description of the Culp, Inc. Employees' Retirement Builder 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. (the Company) and its subsidiaries who have one year of service and are age twenty-one or older, except for hourly employees of Rossville/Chromatex who are covered under a union benefit plan. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Page 4 CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN NOTES TO FINANCIAL STATEMENTS NOTE B - DESCRIPTION OF PLAN (Continued) Contributions The Plan was established in 1982 as a profit-sharing plan to which contributions determined by the Board of Directors of Culp, Inc. could be made on a discretionary basis. No profit-sharing contributions were made during 1995, 1994 or 1993. In November 1986, the Plan was amended to include provisions for 401(k) contributions and several related investment options. Participants may contribute from 2% to 15% of their annual compensation as 401(k) contributions, not to exceed a base limit of $9,240 in 1995, $9,240 in 1994, and $8,994 in 1993. The Company makes a matching contribution equal to 50% of the participant's contribution up to the first 5% of annual compensation. Participants may elect to have contributions invested in 25% increments in a guaranteed insurance contract fund, a Culp, Inc. stock fund, a balanced fund, or a value fund. In addition to its contributions to the Plan, the Company paid administrative expenses on behalf of the Plan which totaled $8,872 for the year ended December 31, 1995, $21,941 for the year ended December 31, 1994 and $15,128 for the year ended December 31, 1993. Participant Accounts 401(k) contributions are credited on a specific identification basis. Income of the respective funds is allocated based on participants' account balances. Upon retirement, death or termination, the participant or beneficiary may elect to receive either a lump sum amount equal to the vested portion of his account, or an annuity contract of equivalent value. Upon termination, life insurance coverage purchased through the Plan may be either converted to cash or transferred to the participant. Vesting Participants are immediately vested in their profit-sharing accounts and their 401(k) contributions, including the matching contributions from the Company and actual earnings thereon. Page 5 CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN NOTES TO FINANCIAL STATEMENTS NOTE C - INVESTMENT FUNDS The following information summarizes the financial condition of the Plan by fund type as of December 31, 1995 and 1994: Page 6
December 31, 1995 Guaranteed Insurance Life Value Contract Insurance Stock Balanced Fund Fund Fund Fund Fund Total ASSETS Investments $ 2,374,244 $ 7,988,991 $ - $ 2,975,479 $ 3,407,547 $ 16,746,261 Receivables Employer contributions 9,257 34,352 - 10,452 13,189 67,250 Employee contributions 23,643 79,847 - 25,135 32,265 160,890 ------------ ------------ ------------ ------------ ------------ --------- TOTAL ASSETS 2,407,144 8,103,190 - 3,011,066 3,453,001 16,974,401 LIABILITIES Accounts payable - 1,470 - - - 1,470 ----------- ------------ ------------ ------------ ------------ ------------ NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 2,407,144 $ 8,101,720 $ - $ 3,011,066 $ 3,453,001 $ 16,972,931 =========== ============ ============ ============ ============ ============ December 31, 1994 Guaranteed Insurance Life Value Contract Insurance Stock Balanced Fund Fund Fund Fund Fund Total ASSETS Investments $ 1,274,731 $ 7,183,949 $ - $ 2,421,213 $ 2,709,574 $ 13,589,467 Receivables Employer contributions 7,200 34,722 - 12,947 14,878 69,747 Employee contributions 18,634 79,619 964 31,760 35,470 166,447 ------------ ------------ ------------ ------------ ------------ --------- TOTAL ASSETS 1,300,565 7,298,290 964 2,465,920 2,759,922 13,825,661 LIABILITIES Accounts payable 1,068 8,425 964 2,044 2,016 14,517 ----------- ------------ ------------ ------------ ------------ ------------ NET ASSETS AVAILABLE FOR PLAN BENEFITS $ 1,299,497 $ 7,289,865 $ - $ 2,463,876 $ 2,757,906 $ 13,811,144 =========== ============ ============ ============ ============ ============ CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN NOTES TO FINANCIAL STATEMENTS NOTE C - INVESTMENT FUNDS (Continued) The following information summarizes the changes in net assets available for plan benefits by fund type for the years ended December 31, 1995, 1994 and 1993: Page 7
Year Ended December 31, 1995 Guaranteed Insurance Life Value Contract Insurance Stock Balanced Fund Fund Fund Fund Fund Total ADDITIONS TO NET ASSETS ATTRIBUTED TO Net income from investment in a common trust $ 494,397 $ 447,764 $ - $ - $ 715,633 $ 1,657,794 Appreciation in fair value of Culp, Inc. Stock Fund - - - 285,027 - 285,027 Dividend income from Culp, Inc. Stock Fund - - - 25,344 - 25,344 Interest income from Culp, Inc. Stock Fund - - - 194 - 194 Contributions Employer 108,018 378,015 - 144,284 171,135 801,452 Employees 280,253 873,833 3,377 352,490 412,988 1,922,941 ----------- ------------ ------------ ------------ ------------ ------------ TOTAL ADDITIONS 882,668 1,699,612 3,377 807,339 1,299,756 4,692,752 ----------- ------------ ------------ ------------ ------------ ------------ DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO Benefits paid to participants 92,103 956,495 607 187,168 223,471 1,459,844 Insurance 406 7,121 - 2 1,896 9,425 Trustee fees 8,005 30,302 - 10,056 13,333 61,696 ----------- ------------ ------------ ------------ ------------ ------------ TOTAL DEDUCTIONS 100,514 993,918 607 197,226 238,700 1,530,965 ----------- ------------ ------------ ------------ ------------ ------------ NET INCREASE 782,154 705,694 2,770 610,113 1,061,056 3,161,787 NET ASSETS AVAILABLE FOR PLAN BENEFITS Beginning of year 1,299,497 7,289,865 - 2,463,876 2,757,906 13,811,144 Fund transfers 325,493 106,162 (2,770) (62,924) (365,961) - ----------- ------------ ----------- ----------- ----------- ------------ END OF YEAR $ 2,407,144 $ 8,101,721 $ - $ 3,011,065 $ 3,453,001 $ 16,972,931 =========== ============ ============ ============ ============ ============ CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN NOTES TO FINANCIAL STATEMENTS NOTE C - INVESTMENT FUNDS (Continued) Page 8
Year Ended December 31, 1994 Guaranteed Insurance Life Value Contract Insurance Stock Balanced Fund Fund Fund Fund Fund Total ADDITIONS TO NET ASSETS ATTRIBUTED TO Net income (loss) from investment in a common trust $ 40,233 $ 373,359 $ - $ - $(60,453) $ 353,139 Appreciation in fair value of Culp, Inc. Stock Fund - - - (909,365) - (909,365) Dividend income from Culp, Inc. Stock Fund - - - 14,684 - 14,684 Interest income from Culp, Inc. Stock Fund - - - 5,629 - 5,629 Contributions Employer 40,402 406,128 - 145,741 180,809 773,080 Employees 105,230 925,415 11,353 365,464 443,901 1,851,363 ----------- ------------ ------------ ------------ ------------ ------------ TOTAL ADDITIONS 185,865 1,704,902 11,353 (377,847) 564,257 2,088,530 ----------- ------------ ------------ ----------- ------------ ------------ DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO Benefits paid to participants 3,015 624,715 - 158,265 288,395 1,074,390 Insurance - - 11,353 - - 11,353 Trustee fees 2,937 39,774 - 9,542 14,761 67,014 ----------- ------------ ------------ ------------ ------------ ------------ TOTAL DEDUCTIONS 5,952 664,489 11,353 167,807 303,156 1,152,757 ----------- ------------ ------------ ------------ ------------ ------------ NET INCREASE (DECREASE) 179,913 1,040,413 - (545,654) 261,101 935,773 NET ASSETS AVAILABLE FOR PLAN BENEFITS Beginning of year - 7,897,402 - 2,463,339 2,514,630 12,875,371 Fund transfers 1,119,584 (1,647,950) - 546,191 (17,825) - ----------- ----------- ------------ ------------ ----------- ------------ END OF YEAR $ 1,299,497 $ 7,289,865 $ - $ 2,463,876 $ 2,757,906 $ 13,811,144 =========== ============ ============ ============ ============ ============ CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN NOTES TO FINANCIAL STATEMENTS NOTE C - INVESTMENT FUNDS (Continued) Page 9
Year Ended December 31, 1993 Guaranteed Insurance Life Contract Insurance Stock Balanced Fund Fund Fund Fund Total ADDITIONS TO NET ASSETS ATTRIBUTED TO Net income from investment in a common trust $ 398,454 $ - $ - $ 229,020 $ 627,474 Appreciation in fair value of Culp, Inc. Stock Fund - - 1,721,339 - 1,721,339 Dividend income from Culp, Inc. Stock Fund - - 10,821 - 10,821 Interest income from Culp, Inc. Stock Fund - - 2,643 - 2,643 Contributions Employer 420,798 - 56,927 119,111 596,836 Employees 953,420 13,748 130,726 297,949 1,395,843 ------------ ------------ ------------ ------------ ------------ TOTAL ADDITIONS 1,772,672 13,748 1,922,456 646,080 4,354,956 ------------ ------------ ------------ ------------ ------------ DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO Benefits paid to participants 649,474 - 164,599 112,797 926,870 Insurance - 13,748 - - 13,748 Trustee fees 46,574 - 8,415 13,932 68,921 ------------ ------------ ------------ ------------ ------------ TOTAL DEDUCTIONS 696,048 13,748 173,014 126,729 1,009,539 ------------ ------------ ------------ ------------ ------------ NET INCREASE 1,076,624 - 1,749,442 519,351 3,345,417 NET ASSETS AVAILABLE FOR PLAN BENEFITS Beginning of year 6,781,347 - 847,417 1,901,190 9,529,954 Fund transfers 39,431 - (133,520) 94,089 - ------------ ------------ ----------- ------------ ------------ END OF YEAR $ 7,897,402 $ - $ 2,463,339 $ 2,514,630 $ 12,875,371 ============ ============ ============ ============ ============ CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN NOTES TO FINANCIAL STATEMENTS NOTE D - INVESTMENTS The following table presents the quoted market value of investments at December 31, 1995 and 1994. Investments that represent 5% or more of total plan assets are separately identified. NOTE E - ACCOUNTS OF TERMINATED PARTICIPANTS Included in net assets available for plan benefits at December 31, 1995 and 1994 is $227,480 and $541,000, respectively, allocated to the accounts of persons who elected to withdraw from the Plan or who were terminated but have not yet been paid. NOTE F - TERMINATION PRIORITIES While the Company expects to continue the Plan indefinitely, should the Plan be terminated, the net assets available for plan benefits at the termination date would be distributed to participants based on amounts which have been allocated to their respective accounts. NOTE G - INCOME TAX STATUS The Plan obtained its last determination letter on June 15, 1995, in which the Internal Revenue Service stated that the Plan, as then designed, constituted a qualified trust under Section 401(a) of the Internal Revenue Code and is therefore exempt from federal income taxes under provisions of Section 501. The Plan has been amended since receiving the determination letter. However, the plan administrator and the Plan's tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, they believe that the Plan was qualified and the related trust was tax-exempt as of the financial statement date. Except for a portion of the amounts paid as premiums for life insurance coverage, contributions are exempt from federal income taxes until they are distributed to the participants or their beneficiaries. Page 10
1995 1994 --------------- ---------- Investments at fair value as determined by quoted market price: Common trust funds: First Union Funds Value Portfolio Trust $ 2,374,244 $ 1,274,731 Common trust fund - Money Market Stable Investment Fund 7,988,991 7,183,949 First Union Funds Balanced Portfolio Trust 3,407,547 2,709,574 Culp, Inc. common stock 2,975,479 2,421,213 --------------- ---------------- $ 16,746,261 $ 13,589,467 =============== ================