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, 1996 to December 31, 1996
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:
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CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
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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, 1996 was 1,886. 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 Accountants 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 30, 1997
Robert G. Culp, III
Franklin N. Saxon
Kenneth M. Ludwig
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Culp, Inc. Employees' Retirement Builder Plan
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TABLE OF CONTENTS
Page No.
Independent Auditors' Report....................................... 1
Financial Statements
Statements of Net Assets Available for Plan Benefits............ 2
Statements of Changes in Net Assets Available for Plan Benefits. 3
Notes to Financial Statements................................... 4
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Page 1
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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,
1996 and 1995 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,
1996. 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, 1996 and 1995 and the changes in net
assets available for plan benefits for each of the years in the three year
period ended December 31, 1996 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 12 through 15 are presented for the purpose of additional analysis and are
not a required part of the basic financial statements. The supplemental
schedules on pages 12 and 13 are supplemental 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 supplemental
information for the years ended December 31, 1996, 1995 and 1994 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
supplemental information for the years ended December 31, 1993 and 1992 was
audited by us and our report dated March 11, 1994 expressed an unqualified
opinion on such information in relation to the basic financial statements for
those years taken as a whole.
March 20, 1997
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See accompanying notes. Page 2
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CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, 1996 and 1995
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ASSETS 1996 1995
Investments, at fair value $ 20,555,547 $ 16,746,261
Receivables
Employer contributions 73,313 67,250
Employee contributions 178,773 160,890
TOTAL ASSETS 20,807,633 16,974,401
LIABILITIES
Accounts payable 1,395 1,470
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $ 20,806,238 $ 16,972,931
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See accompanying notes. Page 3
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CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
Years Ended December 31, 1996, 1995 and 1994
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1996 1995 1994
ADDITIONS TO NET ASSETS
ATTRIBUTED TO
Net income from investment in a common trust $ 1,390,480 $ 1,657,794 $ 353,139
Appreciation (depreciation) in fair value of
Culp, Inc. Stock Fund 1,080,348 285,027 (909,365)
Dividend income from Culp, Inc. Stock Fund 32,073 25,344 14,684
Interest income from Culp, Inc. Stock Fund - 194 5,629
Contributions
Employer 870,394 801,452 773,080
Employees 2,110,867 1,922,941 1,851,363
TOTAL ADDITIONS 5,484,162 4,692,752 2,088,530
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO
Benefits paid to participants 1,591,272 1,459,844 1,074,390
Insurance 9,126 9,425 11,353
Trustee fees 50,457 61,696 67,014
TOTAL DEDUCTIONS 1,650,855 1,530,965 1,152,757
NET INCREASE 3,833,307 3,161,787 935,773
NET ASSETS AVAILABLE FOR
PLAN BENEFITS
Beginning of year 16,972,931 13,811,144 12,875,371
END OF YEAR $ 20,806,238 $ 16,972,931 $ 13,811,144
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CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS
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December 31, 1996 and 1995
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Page 4
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 and Income Recognition
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.
Purchases and sales of investments are reported on a trade date basis. Income
from investments is reported as earned on the accrual basis. Dividends are
recorded on the ex-dividend date.
Payment of Benefits
Benefits are recorded when paid.
Allocated Insurance Contracts
Assets related to life insurance purchased through the Plan are excluded from
plan assets.
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).
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Page 5
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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 1996, 1995
or 1994.
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.
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 value fund, a guaranteed
insurance contract fund, a Culp, Inc. stock fund, or a balanced fund.
Contributions are subject to certain limitations.
In addition to its contributions to the Plan, the Company paid administrative
expenses on behalf of the Plan which totaled $8,988 for the year ended December
31, 1996, $8,872 for the year ended December-31, 1995 and $21,941 for the year
ended December 31, 1994.
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.
Payment of Benefits
On termination of service, a participant may elect to receive either a lump-sum
distribution or monthly or annual installments over a term not to exceed the
lesser of fifteen years or life expectancy of the participant and the designated
beneficiary.
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NOTE C - INVESTMENT FUNDS
The following information summarizes the financial condition of the Plan by
investment option as of December 31, 1996 and 1995:
December 31, 1996
Guaranteed
Insurance Life
Value Contract Insurance Stock Balanced
Fund Fund Fund Fund Fund Total
ASSETS
Investments $ 3,522,812 $ 8,462,876 $ - $ 4,695,244 $ 3,874,615 $20,555,547
Receivables
Employer contributions 12,076 34,475 - 13,981 12,781 73,313
Employee contributions 31,637 79,646 - 35,678 31,812 178,773
TOTAL ASSETS 3,566,525 8,576,997 - 4,744,903 3,919,208 20,807,633
LIABILITIES
Accounts payable - 1,395 - - - 1,395
NET ASSETS AVAILABLE
FOR PLAN BENEFITS $ 3,566,525 $ 8,575,602 $ - $ 4,744,903 $ 3,919,208 $20,806,238
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
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NOTE C - INVESTMENT FUNDS (Continued)
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The following information summarizes the changes in net assets available for
plan benefits by investment option for the years ended December 31, 1996, 1995
and 1994:
Year Ended December 31, 1996
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 $ 540,670 $ 441,212 $ - $ - $ 408,598 $ 1,390,480
Appreciation in fair value of
Culp, Inc. Stock Fund - - - 1,080,348 - 1,080,348
Dividend income from Culp, Inc.
Stock Fund - - - 32,073 - 32,073
Contributions
Employer 150,672 391,215 - 155,581 172,926 870,394
Employees 391,122 910,076 10,604 378,196 420,869 2,110,867
TOTAL ADDITIONS 1,082,464 1,742,503 10,604 1,646,198 1,002,393 5,484,162
DEDUCTIONS FROM NET
ASSETS ATTRIBUTED TO
Benefits paid to participants 72,284 1,006,442 10,604 303,316 198,626 1,591,272
Insurance 744 5,669 - 731 1,982 9,126
Trustee fees 7,892 23,003 - 9,598 9,964 50,457
TOTAL DEDUCTIONS 80,920 1,035,114 10,604 313,645 210,572 1,650,855
NET INCREASE 1,001,544 707,389 - 1,332,553 791,821 3,833,307
NET ASSETS AVAILABLE
FOR PLAN BENEFITS
Beginning of year 2,407,144 8,101,720 - 3,011,066 3,453,001 16,972,931
Fund transfers 157,837 (233,507) - 401,284 (325,614) -
END OF YEAR $ 3,566,525 $ 8,575,602 $ - $ 4,744,903 $ 3,919,208 $20,806,238
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Page 9
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NOTE C - INVESTMENT FUNDS (Continued)
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 325,493 106,161 (2,770) (62,923) (365,961) -
END OF YEAR $ 2,407,144 $ 8,101,720 $ - $ 3,011,066 $ 3,453,001 $16,972,931
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NOTE C - INVESTMENT FUNDS (Continued)
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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
Depreciation 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
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Page 11
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NOTE D - INVESTMENTS
The following table presents the quoted market value of investments at December
31, 1996 and 1995. Investments that represent 5% or more of total plan assets
are separately identified.
1996 1995
Investments at fair value as determined by
quoted market price:
Common trust funds:
First Union Funds Value Portfolio Trust $ 3,522,812 $ 2,374,244
Common trust fund - Money Market Stable
Investment Fund 8,462,876 7,988,991
First Union Funds Balanced Portfolio Trust 3,874,615 3,407,547
Culp, Inc. common stock 4,695,244 2,975,479
$ 20,555,547 $ 16,746,261
During 1996, the Plan's investments (including investments bought, sold, and
held during the year) appreciated in value by $2,470,828 as follows:
Investments at fair value as determined by
quoted market price:
Common trust funds $ 1,390,480
Culp, Inc. common stock 1,080,348
$ 2,470,828
NOTE E - ACCOUNTS OF TERMINATED PARTICIPANTS
Included in net assets available for plan benefits at December 31, 1996 and 1995
is $238,514 and $227,480, 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 - 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.
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NOTE G - INCOME TAX STATUS
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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 designed
and currently 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.
NOTE H - RELATED PARTY TRANSACTIONS
Certain plan investments are shares of mutual funds managed by First Union
National Bank. First Union National Bank is the trustee as defined by the Plan
and, therefore, these transactions qualify as party-in-interest.
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