SEC Filing | Culp Inc

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- --------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended August 1, 1999

                           Commission File No. 0-12781


                                   CULP, INC.

             (Exact name of registrant as specified in its charter)


         NORTH CAROLINA                                 56-1001967
  (State or other jurisdiction of          (I.R.S. Employer Identification No.)
incorporation or other organization)


    101 S. Main St., High Point, North Carolina           27261-2686
     (Address of principal executive offices)             (zip code)

                                 (336) 889-5161
              (Registrant's telephone number, including area code)



Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Section 13 of the  Securities  Exchange  Act of 1934  during the
preceding 12 months and (2) has been subject to the filing  requirements  for at
least the past 90 days.

                                    YES X NO


             Common shares outstanding at August 1, 1999: 12,040,484
                                 Par Value: $.05





                               INDEX TO FORM 10-Q
                       For the period ended August 1, 1999

Part I -  Financial Information.                                           Page
- --------------------------------------------------------------------------------

Item 1.    Unaudited Interim Consolidated Financial Statements:

Consolidated Statements of Income (Loss)--Three Months Ended
     August 1, 1999 and August 2, 1998                                      I-1

Consolidated Balance Sheets-August 1, 1999, August 2, 1998 and May 2, 1999  I-2

Consolidated Statements of Cash Flows---Three Months Ended August 1, 1999
      and August 2, 1998                                                    I-3

Consolidated Statements of Shareholders' Equity                             I-4

Notes to Consolidated Financial Statements                                  I-5

Sales by Segment/Division                                                   I-10

International Sales by Geographic Area                                      I-11

Item 2.   Management's Discussion and Analysis of Financial
Condition and Results of Operations                                         I-12

Item 3. Quantitative and Qualitative Disclosures About Market Risk          I-18
- --------------------------------------------------------------------------------
Part II - Other Information

Item 6.   Exhibits and Reports on Form 8-K                                  II-1

Signature                                                                   II-8







Item 1. Financial Statements

                                   CULP, INC.
                    CONSOLIDATED STATEMENTS OF INCOME (LOSS)
            FOR THREE MONTHS ENDED AUGUST 1, 1999 AND AUGUST 2, 1998



               (Amounts in Thousands, Except for Per Share Data)

                                                                       THREE MONTHS ENDED (UNAUDITED)
                                              ----------------------------------------------------------------------------------

                                                         Amounts                                          Percent of Sales
                                              ------------------------------                        ------------------------------
                                                August 1,       August 2,         % Over
                                                  1999            1998           (Under)               2000            1999
                                              --------------  --------------   -------------        --------------  --------------
                                                                                                        
Net sales                                 $         115,937         110,667           4.8 %               100.0 %         100.0 %
Cost of sales                                        95,525          97,056          (1.6)%                82.4 %          87.7 %
                                              --------------  --------------   -------------        --------------  --------------
         Gross profit                                20,412          13,611          50.0 %                17.6 %          12.3 %

Selling, general and
  administrative expenses                            15,038          14,473           3.9 %                13.0 %          13.1 %
                                              --------------  --------------   -------------        --------------  --------------
         Income (loss) from operations                5,374            (862)        723.4 %                 4.6 %          (0.8)%

Interest expense                                      2,416           2,361           2.3 %                 2.1 %           2.1 %
Interest income                                         (17)            (53)        (67.9)%                (0.0)%          (0.0)%
Other expense (income), net                             555             770         (27.9)%                 0.5 %           0.7 %
                                              --------------  --------------   -------------        --------------  --------------
         Income (loss) before income taxes            2,420          (3,940)        161.4 %                 2.1 %          (3.6)%

Income taxes  *                                         823          (1,300)        163.3 %                34.0 %          33.0 %
                                              --------------  --------------   -------------        --------------  --------------

         Net income (loss)                $           1,597          (2,640)        160.5 %                 1.4 %          (2.4)%
                                              ==============  ==============   =============        ==============  ==============

Net income (loss) per share                           $0.13          ($0.20)        165.0 %
Net income (loss) per share, assuming dilution        $0.13          ($0.20)        165.0 %
Dividends per share                                  $0.035          $0.035           0.0 %
Average shares outstanding                           12,063          13,000          (7.2)%
Average shares outstanding, assuming dilution        12,219          13,203          (7.5)%





* Percent of sales column is  calculated  as a % of income  (loss) before income
taxes.



                                   CULP, INC.
                           CONSOLIDATED BALANCE SHEETS
                 AUGUST 1, 1999, AUGUST 2, 1998 AND MAY 2, 1999
                                    Unaudited
                             (Amounts in Thousands)



                                                                Amounts                        Increase
                                                 -----------------------------------           (Decrease)
                                                   August 1,          August 2,      --------------------------------    * May 2,
                                                     1999                1998            Dollars         Percent           1999
                                                 -----------------  ---------------  ----------------    -------------  ------------
                                                                                                           
Current assets
       Cash and cash investments               $            1,097            1,520              (423)       (27.8)%             509
       Accounts receivable                                 61,984           63,833            (1,849)        (2.9)%          70,503
       Inventories                                         75,337           79,358            (4,021)        (5.1)%          67,070
       Other current assets                                10,860            7,511             3,349         44.6 %           9,633
                                                 -----------------  ---------------  ----------------    -------------  ------------
                  Total current assets                    149,278          152,222            (2,944)        (1.9)%         147,715

Restricted investments                                      1,684            4,074            (2,390)       (58.7)%           3,340
Property, plant & equipment, net                          120,971          127,287            (6,316)        (5.0)%         123,310
Goodwill                                                   50,920           54,798            (3,878)        (7.1)%          51,269
Other assets                                                4,969            4,317               652         15.1 %           4,978
                                                 -----------------  ---------------  ----------------    -------------  ------------

                  Total assets                 $          327,822          342,698           (14,876)        (4.3)%         330,612
                                                 =================  ===============  ================    =============  ============



Current liabilities
       Current maturities of long-term debt    $            1,678            3,250            (1,572)       (48.4)%           1,678
       Accounts payable                                    26,099           31,710            (5,611)       (17.7)%          25,687
       Accrued expenses                                    20,309           13,856             6,453         46.6 %          21,026
       Income taxes payable                                   798                0               798        100.0 %               0
                                                 -----------------  ---------------  ----------------    -------------  ------------
                  Total current liabilities                48,884           48,816                68          0.1 %          48,391


Long-term debt                                            136,228          154,383           (18,155)       (11.8)%         140,312

Deferred income taxes                                      14,583           11,227             3,356         29.9 %          14,583
                                                 -----------------  ---------------  ----------------    -------------  ------------
                  Total liabilities                       199,695          214,426           (14,731)        (6.9)%         203,286

Shareholders' equity                                      128,127          128,272              (145)        (0.1)%         127,326
                                                 -----------------  ---------------  ----------------    -------------  ------------
                  Total liabilities and
                  shareholders' equity         $          327,822          342,698           (14,876)        (4.3)%         330,612
                                                 =================  ===============  ================    =============  ============

Shares outstanding                                         12,040           12,995              (955)        (7.3)%          12,079
                                                 =================  ===============  ================    =============  ============


*  Derived from audited financial statements.



                                   CULP, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
          FOR THE THREE MONTHS ENDED AUGUST 1, 1999 AND AUGUST 2, 1998
                                    Unaudited
                             (Amounts in Thousands)



                                                                                             THREE MONTHS ENDED
                                                                                        --------------------------------
                                                                                                    Amounts
                                                                                        --------------------------------
                                                                                          August 1,        August 2,
                                                                                             1999             1998
                                                                                        ---------------  ---------------
                                                                                                      
Cash flows from operating activities:
     Net income (loss)                                                             $             1,597           (2,640)
     Adjustments to reconcile net income (loss) to net
        cash provided by operating activities:
            Depreciation                                                                         4,759            4,376
            Amortization of intangible assets                                                      399              398
            Changes in assets and liabilities:
                Accounts receivable                                                              8,519            9,940
                Inventories                                                                     (8,267)            (764)
                Other current assets                                                            (1,227)             297
                Other assets                                                                       (41)             (11)
                Accounts payable                                                                   270           (3,017)
                Accrued expenses                                                                  (717)          (4,080)
                Income taxes payable                                                               798           (1,282)
                                                                                        ---------------  ---------------
                    Net cash provided by operating activities                                    6,090            3,217
                                                                                        ---------------  ---------------
Cash flows from investing activities:
     Capital expenditures                                                                       (2,420)          (2,858)
     Purchases of restricted investments                                                           (15)             (53)
     Sale of restricted investments                                                              1,671                0
                                                                                        ---------------  ---------------
                    Net cash used in investing activities                                         (764)          (2,911)
                                                                                        ---------------  ---------------
Cash flows from financing activities:
     Proceeds from issuance of long-term debt                                                    3,333            2,071
     Principal payments on long-term debt                                                       (7,417)             (75)
     Change in accounts payable-capital expenditures                                               142           (2,487)
     Dividends paid                                                                               (423)            (455)
     Payments to acquire common stock                                                             (393)            (160)
     Proceeds from common stock issued                                                              20                8
                                                                                        ---------------  ---------------
                    Net cash used in financing activities                                       (4,738)          (1,098)
                                                                                        ---------------  ---------------

Increase (decrease) in cash and cash investments                                                   588             (792)

Cash and cash investments at beginning of period                                                   509            2,312
                                                                                        ---------------  ---------------

Cash and cash investments at end of period                                         $             1,097            1,520
                                                                                        ===============  ===============



                                   CULP, INC.
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                   (Unaudited)

(Dollars in thousands, except per share data)


                                                                           Capital
                                             Common Stock                Contributed                             Total
                                   ---------------------------------      in Excess          Retained        Shareholders'
                                         Shares           Amount         of Par Value        Earnings            Equity
- --------------------------------------------------------------------------------------------------------------------------
                                                                                            
Balance, May 3, 1998                  13,007,021      $     650         $     40,882      $    89,987      $    131,519
    Cash dividends ($0.14 per share)                                                           (1,788)           (1,788)
    Net income                                                                                  3,102             3,102
    Common stock issued in connection
       with stock option plans            10,750              1                   34                                 35
    Common stock purchased              (938,600)           (47)              (2,950)          (2,545)           (5,542)
- --------------------------------------------------------------------------------------------------------------------------
Balance, May 2, 1999                  12,079,171            604               37,966           88,756           127,326
    Cash dividends ($0.035 per share)                                                            (423)             (423)
    Net income                                                                                  1,597             1,597
    Common stock issued in connection
       with stock option plans             7,313                                  20                                 20
    Common stock purchased               (46,000)            (2)                (145)            (246)             (393)
- --------------------------------------------------------------------------------------------------------------------------
Balance,  August 1, 1999              12,040,484      $     602         $     37,841      $    89,684      $    128,127
==========================================================================================================================





                                   Culp, Inc.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (unaudited)


1. Basis of Presentation

          The accompanying  unaudited consolidated financial statements of Culp,
     Inc. and subsidiary,  include all  adjustments,  consisting only of normal,
     recurring   adjustments  and  accruals,   which  are,  in  the  opinion  of
     management,  necessary for fair  presentation  of the results of operations
     and financial  position.  Results of operations for interim periods may not
     be  indicative of future  results.  The  unaudited  consolidated  financial
     statements  should be read in  conjunction  with the  audited  consolidated
     financial statements,  which are incorporated by reference in the company's
     annual  report  on  Form  10-K  filed  with  the  Securities  and  Exchange
     Commission  on July  30,  1999  for the  fiscal  year  ended  May 2,  1999.
================================================================================
================================================================================

2.  Accounts Receivable

      A summary of accounts receivable follows (dollars in thousands):

- --------------------------------------------------------------------------------

                                           August 1, 1999            May 2, 1999
- --------------------------------------------------------------------------------

Customers                                 $    64,690               $    73,089
Allowance for doubtful accounts                (1,564)                   (1,452)
Reserve for returns and allowances             (1,142)                   (1,134)
- --------------------------------------------------------------------------------

                                          $    61,984               $    70,503
================================================================================

3.  Inventories

     Inventories are carried at the lower of cost or market.  Cost is determined
for substantially all inventories using the LIFO (last-in, first-out) method.

     A summary of inventories follows (dollars in thousands):

- --------------------------------------------------------------------------------

                                           August 1, 1999            May 2, 1999
- --------------------------------------------------------------------------------

Raw materials                             $    45,540               $    40,728
Work-in-process                                 6,206                     6,790
Finished goods                                 29,313                    24,885
- --------------------------------------------------------------------------------

Total inventories valued at FIFO cost          81,059                    72,403
Adjustments of certain inventories to the
   LIFO cost method                            (1,478)                   (1,478)
Adjustments of certain inventories to market   (4,244)                   (3,855)
- --------------------------------------------------------------------------------

                                          $    75,337               $    67,070
================================================================================

4.  Restricted Investments

     Restricted investments were purchased with proceeds from industrial revenue
bond issues and are invested  pending  application  of such  proceeds to project
costs or  repayment  of the  bonds.  The  investments  are  stated at cost which
approximates market value.

5.    Accounts Payable

     A summary of accounts payable follows (dollars in thousands):
- --------------------------------------------------------------------------------

                                           August 1, 1999            May 2, 1999
- --------------------------------------------------------------------------------

Accounts payable-trade                    $    25,720               $    25,450
Accounts payable-capital expenditures             379                       237
- --------------------------------------------------------------------------------

                                          $    26,099                $   25,687
================================================================================




6.  Accrued Expenses

     A summary of accrued expenses follows (dollars in thousands):
- --------------------------------------------------------------------------------

                                           August 1, 1999            May 2, 1999
- --------------------------------------------------------------------------------

Compensation and benefits                 $    11,425               $    13,136
Other                                           8,884                     7,890
- --------------------------------------------------------------------------------

                                          $    20,309               $    21,026
================================================================================

7.  Long-Term Debt

     A summary of long-term debt follows (dollars in thousands):
- --------------------------------------------------------------------------------

                                           August 1, 1999            May 2, 1999
- --------------------------------------------------------------------------------

Senior unsecured notes                    $    75,000               $    75,000
Industrial revenue bonds and other
   obligations                                 33,519                    35,278
Revolving credit facility                      20,000                    25,000
Revolving line of credit                        3,333                         0
Obligations to sellers                          6,054                     6,712
- --------------------------------------------------------------------------------
                                              137,906                   141,990
Less current maturities                        (1,678)                   (1,678)
- --------------------------------------------------------------------------------

                                         $    136,228              $    140,312
================================================================================




     The senior unsecured notes have a fixed coupon rate of 6.76% and an average
remaining term of 9 years. The principal  payments become due from March 2006 to
March 2010 with interest payable semi-annually.

     The company's revolving credit agreement (the "Credit Agreement")  provides
an unsecured  multi-currency  revolving credit facility,  which expires in April
2002,  with a  syndicate  of banks in the United  States.  The Credit  Agreement
provides for a revolving loan commitment of $88,000,000.  The agreement requires
payment of a quarterly  facility fee in advance.  On borrowings  outstanding  at
August 1, 1999, the interest rate was 6.31%.

     The company's  $6,000,000  revolving  line of credit  expires on August 31,
2000.  However,  the  line of  credit  will  automatically  be  extended  for an
additional  three-month  period on each  November  30,  February  28, May 31 and
August 31 unless the bank  notifies the company that the line of credit will not
be extended. On borrowings  outstanding at August 1, 1999, the interest rate was
6.35%.

     The industrial revenue bonds (IRBs) are generally due in balloon maturities
which occur at various dates from 2006 to 2013. The IRBs are  collateralized  by
restricted  investments of $1,684,000 and letters of credit for the  outstanding
balance of the IRBs and certain interest payments due thereunder.

     The company's loan agreements require, among other things, that the company
maintain  compliance  with  certain  financial  ratios.  At August 1, 1999,  the
company was in compliance with these required financial covenants.

     At August 1, 1999, the company had three interest rate swap agreements with
a bank in order to reduce its exposure to floating  interest  rates on a portion
of its variable rate  borrowings.  The following table  summarizes  certain data
regarding the interest rate swaps:

        notational amount         interest rate                expiration date
        -----------------         -------------                ---------------
            $15,000,000                   7.3%                  April 2000
            $ 5,000,000                   6.9%                   June 2002
            $ 5,000,000                   6.6%                   July 2002

     The estimated  amount at which the company could terminate these agreements
as of August 1, 1999 is  approximately  $149,000.  Net amounts  paid under these
agreements  increased interest expense by approximately  $92,000 and $59,000 for
the three months of fiscal 2000 and 1999, respectively.  Management believes the
risk of incurring losses resulting from the inability of the bank to fulfill its
obligation  under the interest  rate swap  agreements  to be remote and that any
losses incurred would be immaterial.





8. Cash Flow Information

     Payments for  interest and income taxes during the period were  (dollars in
thousands)

- --------------------------------------------------------------------------------
                                                          2000             1999
- --------------------------------------------------------------------------------
Interest                                                $1,340        $   1,231
Income taxes                                             1,186            1,637
================================================================================


9. Foreign Exchange Forward Contracts

     The company  generally  enters  into  foreign  exchange  forward and option
contracts  as a hedge  against its  exposure to  currency  fluctuations  on firm
commitments to purchase certain  machinery and equipment and raw materials.  The
company had  approximately  $3,700,000 of outstanding  foreign  exchange forward
contracts as of August 1, 1999.


10. Net Income (Loss) Per Share

     The following  table  reconciles  the numerators  and  denominators  of net
income (loss) per share and net income (loss) per share,  assuming  dilution for
the three-month periods ended August 1, 1999 and August 2, 1998:





                                                             THREE MONTHS ENDED
                      -----------------------------------------------------------------------------------------------------
                                          August 1, 1999                                       August 2, 1998
                      ------------------------------------------------     ------------------------------------------------

(Amounts in thousands,     Income            Shares         Per Share           (Loss)             Shares        Per Share
except per share data)  (Numerator)       (Denominator)     Amount           (Numerator)        (Denominator)    Amount
                      ----------------    -------------     -----------     ---------------     -------------    ----------
                                                                                                
Net income (loss)
    per share             $1,597             12,063           $0.13            ($2,640)            13,000         ($0.20)
                                                            ===========                                          ==========

Effect of dilutive
    securities:
       Options               -                  156                                -                  203

                      ----------------    -------------                     ---------------     -------------

Net income (loss)
     per share,
     assuming dilution    $1,597             12,219           $0.13            ($2,640)             13,203        ($0.20)
                      ================    =============     ===========     ===============     =============    ==========


P

11. Segment Information

     The  company's  operations  are  classified  into  two  business  segments:
upholstery  fabrics  and  mattress  ticking.   The  upholstery  fabrics  segment
principally  manufactures  and  sells  woven  jacquards  and  dobbies,  wet  and
heat-transfer  prints, and woven and tufted velvets primarily to residential and
commercial  (contract)  furniture  manufacturers.  The mattress  ticking segment
principally  manufactures  and sells woven jacquards,  heat-transfer  prints and
pigment prints to bedding manufacturers.

     The  company   internally   manages  and  reports   selling,   general  and
administrative  expenses,  interest expense,  interest income, other expense and
income  taxes  on a total  company  basis.  Thus,  profit  by  business  segment
represents gross profit. In addition, the company internally manages and reports
cash and cash investments, accounts receivable, other current assets, restricted
investments, property, plant and equipment, goodwill and other assets on a total
company  basis.  Thus,   identifiable   assets  by  business  segment  represent
inventories.


     Sales,  gross profit and inventories for the company's  operating  segments
are as follows:

(dollars in thousands):
- --------------------------------------------------------------------------------
                                                2000                      1999
- --------------------------------------------------------------------------------
Net sales
     Upholstery Fabrics                   $    90,854              $     88,035
     Mattress Ticking                          25,083                    22,632
- --------------------------------------------------------------------------------
                                          $   115,937              $    110,667
================================================================================

Gross Profit
     Upholstery Fabrics                   $    14,442              $      8,536
     Mattress Ticking                           5,970                     5,075
- --------------------------------------------------------------------------------
                                          $    20,412              $     13,611
================================================================================

Inventories
     Upholstery Fabrics                   $    63,304               $    68,018
     Mattress Ticking                          12,033                    11,340
- --------------------------------------------------------------------------------
                                          $    75,337               $    79,358
================================================================================




                                   CULP, INC.
                            SALES BY SEGMENT/DIVISION
            FOR THREE MONTHS ENDED AUGUST 1, 1999 AND AUGUST 2, 1998




                             (Amounts in thousands)

                                                            THREE MONTHS ENDED (UNAUDITED)
                                       --------------------------------------------------------------------------

                                                Amounts                                Percent of Total Sales
                                       --------------------------                    ----------------------------
                                        August 1,     August 2,         % Over
Segment/Division                          1999          1998           (Under)        2000            1999
- ------------------------------------   ------------  ------------   ---------------  -------------   ------------
                                                                                      
Upholstery Fabrics
    Culp Decorative Fabrics         $       50,516        51,445        (1.8)%          43.6 %          46.5 %
    Culp Velvets/Prints                     36,209        29,994        20.7 %          31.2 %          27.1 %
    Culp Yarn                                4,129         6,596       (37.4)%           3.6 %           6.0 %
                                       ------------  ------------   ---------------  -------------   ------------
                                            90,854        88,035         3.2 %          78.4 %          79.5 %

Mattress Ticking
    Culp Home Fashions                      25,083        22,632        10.8 %          21.6 %          20.5 %
                                       ------------  ------------   ---------------  -------------   ------------

                                  * $      115,937       110,667         4.8 %         100.0 %         100.0 %
                                       ============  ============   ===============  =============   ============




* U.S.  sales were  $92,124 and $84,310 for the three  months of fiscal 2000 and
fiscal 1999, respectively.The percentage increase in U.S. sales was 9.3% for the
three months.



                                   CULP, INC.
                     INTERNATIONAL SALES BY GEOGRAPHIC AREA
            FOR THREE MONTHS ENDED AUGUST 1, 1999 AND AUGUST 2, 1998


                             (Amounts in thousands)



                                                               THREE MONTHS ENDED (UNAUDITED)
                                       --------------------------------------------------------------------------------

                                                  Amounts                                   Percent of Total Sales
                                       -------------------------------                   ------------------------------
                                         August 1,        August 2,        % Over
         Geographic Area                    1999            1998           (Under)         2000             1999
- ----------------------------------     ---------------  --------------  --------------   -------------     ------------
                                                                                             
North America (Excluding USA)     $             7,676           7,253        5.8 %           32.2 %           27.5 %
Europe                                          2,929           3,683      (20.5)%           12.3 %           14.0 %
Middle East                                     6,992           8,300      (15.8)%           29.4 %           31.5 %
Far East & Asia                                 4,309           4,868      (11.5)%           18.1 %           18.5 %
South America                                     620           1,000      (38.0)%            2.6 %            3.8 %
All other areas                                 1,287           1,253        2.7 %            5.4 %            4.8 %
                                       ---------------  --------------  --------------   -------------     ------------

                                  $            23,813          26,357       (9.7)%          100.0 %          100.0 %
                                       ===============  ==============  ==============   =============     ============




International  sales,  and the  percentage of total sales,  for each of the last
five fiscal years follows: fiscal 1995-$57,971 (19%); fiscal 1996-$77,397 (22%);
fiscal 1997-$101,571 (25%); fiscal 1998-$137,223 (29%); and fiscal 1999-$113,354
(23%). International sales for the first quarter represented 20.5% and 23.8% for
2000 and 1999, respectively.



Item 2.

                Management's Discussion and Analysis of Financial
                       Condition and Results of Operations

The  following  analysis of the  financial  condition  and results of operations
should be read in conjunction with the Financial  Statements and Notes and other
exhibits included elsewhere in this report.

Overview

     Culp is one of the largest  manufacturers  and  marketers  in the world for
upholstery  fabrics for furniture and is one of the leading global  producers of
mattress fabrics (or ticking).  The company's  fabrics are used primarily in the
production  of  residential  and  commercial  upholstered  furniture and bedding
products, including sofas, recliners, chairs, love seats, sectionals, sofa-beds,
office  seating and mattress sets.  Although Culp markets  fabrics at most price
levels, the company emphasizes fabrics that have broad appeal in the promotional
and popular-priced categories of furniture and bedding.

     Culp's  worldwide  leadership as a manufacturer  and marketer of upholstery
fabrics and mattress ticking has been achieved  through  internal  expansion and
the integration of strategic acquisitions.

     The  company's  operating  segments  are  upholstery  fabrics and  mattress
ticking,  with related divisions organized within those segments.  In upholstery
fabrics,  Culp Decorative Fabrics manufactures  jacquard and dobby woven fabrics
for residential and commercial  furniture.  Culp  Velvets/Prints  manufactures a
broad range of printed and velvet  fabrics used  primarily for  residential  and
juvenile furniture.  Culp Yarn manufactures  specialty filling yarn that is used
by Culp and also marketed to outside customers.  In mattress ticking,  Culp Home
Fashions  manufactures  and  markets a broad  array of  fabrics  used by bedding
manufacturers.

Three  Months ended  August 1, 1999  compared  with Three Months ended
 August 2, 1998

     Net Sales. Net sales for the first quarter of fiscal 2000 increased by $5.3
million,  or 4.8%,  compared with fiscal 1999. The company's sales of upholstery
fabrics  and  mattress   ticking   increased  $2.8  million  and  $2.5  million,
respectively, or 3.2% and 10.8%, respectively, for the quarter compared with the
prior year.  During the first quarter of fiscal 1999, the company  implemented a
major  reorganization  from  six  business  units  to four  divisions.  This new
corporate  alignment grouped related operations  together and was accompanied by
several changes in managerial positions.  The company believes that this move is
aiding its growth  through  improved  customer  service,  more  effective use of
design resources and increased manufacturing  efficiency.

     The  increase  in sales of  upholstery  fabrics  reflects  higher  sales of
upholstery  fabrics to  U.S.-based  customers  that  offset a 9.7%  decrease  in
international sales. Weakness in international sales, which the company believes
has also affected other manufacturers of upholstery fabrics, has persisted since
the close of fiscal 1998.  The company has taken steps to mitigate the impact of
this industry-wide trend by significantly  curtailing  production  schedules for
certain international-targeted fabrics, introducing a new line of printed cotton
upholstery  fabrics and shifting its marketing  focus to geographic  areas where
demand  appears more  favorable.  The company has a  diversified  global base of
customers  and is seeking to  broaden  that  further  to  minimize  exposure  to
economic uncertainties in any geographic area.

     The increased  sales by Culp Home  Fashions  (primarily  mattress  ticking)
during the first quarter of fiscal 2000 marked a continuation of the longer-term
expansion that this division has  experienced.  The  introduction of new designs
and  fabric   constructions  and  the  advantages  of  the  company's   vertical
integration are driving Culp's growth in mattress  ticking.  In particular,  the
ability to manufacture the jacquard  greige (or unfinished)  goods that are then
printed to produce  mattress  ticking has aided Culp in meeting faster  delivery
schedules and providing improved overall customer service.

     Gross  Profit  and  Cost of  Sales.  Gross  profit  for the  first  quarter
increased 50.0% to $20.4 million and increased as a percentage of net sales from
12.3% to 17.6%. The increase was due principally to the actions that the company
took  during  fiscal  1999 to improve  profitability,  including  a  significant
reduction in the capacity for manufacturing printed flock fabrics and an intense
effort to reduce  operating  expenses  and raise  productivity.  The cost of raw
materials is remaining relatively stable in fiscal 2000.

     Selling,  General  and  Administrative   Expenses.   Selling,  general  and
administrative expenses as a percentage of sales for the first quarter of fiscal
2000 were 13.0%,  down  slightly  from 13.1% for the  year-earlier  period.  The
company has ongoing programs to contain operating  expenses and believes that if
the  company  meets its goal of  increased  net  sales  there  will be  improved
economies of scale, leading to a decline in this percentage.

     Interest  Expense.  Interest  expense of $2.4 million for the first quarter
was unchanged from a year ago. A lower average amount of borrowings  outstanding
was offset by lower  capitalized  interest  related to capital  expenditures and
higher average interest rates.



     Other  Expense.  Other expense  decreased to $555,000 for the first quarter
versus  $770,000 a year ago due  principally to the incidence of a non-recurring
charge in the year-earlier period to write-off certain fixed assets.

     Income  Taxes.  The effective tax rate for the first quarter of fiscal 2000
was 34.0%, up slightly from 33.0% for the year-earlier period.

     Net Income (Loss) Per Share.  Net income per share for the first quarter of
2000 totaled $0.13 per share diluted  compared with a net loss per share diluted
of ($0.20) a year ago.

     Liquidity and Capital Resources  Liquidity.  Cash and cash investments were
$1.1 million as of August 1, 1999, compared with $1.5 million at August 2, 1998,
and $509,000 at the end of fiscal 1999.  Funded debt (long-term debt,  including
current maturities, less restricted investments) was $136.2 million at August 1,
1999,  down from $153.6  million at August 2, 1998 and $138.7  million at May 2,
1999.  As a percentage of total  capital  (funded debt plus total  stockholders'
equity),  the company's borrowings amounted to 51.5% at August 1, 1999, compared
with 54.5% at August 2, 1998,  and 52.1% at May 2, 1999.  The company's  working
capital as of August 1, 1999 was $100.4 million, compared with $103.4 million as
of August 2, 1998, and $99.3 million at the close of fiscal 1999.

     The  company's  cash flow from  operations  was $6.1  million for the first
quarter of fiscal 2000,  consisting  of $6.8 million from  earnings  (net income
plus  depreciation  and  amortization)  offset by a $665,000 increase in working
capital.

     In  separate  authorizations  in June  1998 and  March  1999,  the board of
directors  of the  company  authorized  the use of a total of $10.0  million  to
repurchase  the  company's  common  stock.   During  fiscal  1999,  the  company
repurchased  938,600  shares at an average  price of $5.90 per share under these
authorizations. During the first quarter of fiscal 2000, the company repurchased
46,000 shares at an average price of $8.55 per share.

     Financing  Arrangements.  In April  1998,  Culp  completed  the sale of $75
million  of  senior  unsecured  notes  ("Notes")  in  a  private   placement  to
institutional  investors.  The Notes  have a fixed  coupon  rate of 6.76% and an
average remaining term of nine years.

     Culp has an $88 million  syndicated,  unsecured,  multi-currency  revolving
credit facility.  The facility,  which expires in April 2002, requires quarterly
payments of interest on all outstanding  borrowings and a quarterly facility fee
paid in advance.  As of August 1, 1999, the company had outstanding  balances of
$20 million under the credit facility.

     The  company  also has a total of $33.5  million in  currently  outstanding
industrial  revenue  bonds  ("IRBs")  which  have been used to  finance  capital
expenditures.  The IRBs are  collateralized  by restricted  investments  of $1.7
million as of August 1, 1999 and letters of credit for the  outstanding  balance
of the IRBs and certain interest payments due thereunder.

     The company's loan agreements require, among other things, that the company
maintain  compliance with certain  financial  ratios.  As of August 1, 1999, the
company was in compliance with these financial covenants.

     As of August 1, 1999, the company had three  interest rate swap  agreements
to reduce its  exposure to  floating  interest  rates on a $25 million  notional
amount.  The effect of these  contracts is to "fix" the interest rate payable on
$25 million of the company's variable rate borrowings at a weighted average rate
of 7.1%.  The  company  also  enters into  foreign  exchange  forward and option
contracts  to  hedge  against  currency   fluctuations   with  respect  to  firm
commitments to purchase  certain  machinery,  equipment and raw  materials.  The
company had approximately  $3.7 million of outstanding  foreign exchange forward
contracts as of August 1, 1999.

     Capital  Expenditures.  The company maintains an ongoing program of capital
expenditures  designed to increase  capacity  as needed,  enhance  manufacturing
efficiencies   through   modernization  and  increase  the  company's   vertical
integration.  Capital  expenditures for the first quarter of fiscal 2000 totaled
$2.4 million compared with $2.9 million in the year-earlier  period. The company
currently projects capital spending of approximately $20 million in fiscal 2000.

     The company  believes that cash flows from  operations and funds  available
under existing credit facilities and committed IRB financings will be sufficient
to  fund  capital   expenditures  and  working  capital   requirements  for  the
foreseeable future.

Inflation

     The cost of the company's raw  materials has been  generally  stable during
the past four  quarters.  Factors that  reasonably  can be expected to influence
margins in the future include  changes in raw material  prices,  trends in other
operating costs and overall competitive conditions.




Seasonality

     The company's  business is slightly  seasonal,  with increased sales during
the second and fourth fiscal quarters.  This  seasonality  results from one-week
closings of the company's manufacturing  facilities,  and the facilities of most
of its customers in the United  States,  during the first and third quarters for
the holiday weeks including July 4th and Christmas.

Year 2000 Considerations

     Management  has  developed  a plan  to  modify  the  company's  information
technology  to recognize  the year 2000.  The plan has three  distinct  areas of
focus;  namely,  traditional  information  systems,  technology  used in support
areas, and preparedness of suppliers and customers.

     The initiative for traditional  information systems, which started in 1992,
has led to  substantial  completion  of the  assessment,  required  changes  and
testing of the  company's  operational  systems  (order entry,  billing,  sales,
finished  goods) and  financial  systems  (payroll,  human  resources,  accounts
payable,  accounts  receivable,  general ledger,  fixed assets).  The company is
currently  focused on modifying the remaining systems that support the company's
manufacturing  processes.  The  programming  and  testing of these  systems  was
substantially  completed by April 1, 1999, and  implementation  of these systems
was   substantially   completed  by  June  30,  1999.   The   remaining   system
implementations are scheduled for completion during the second quarter of fiscal
2000 (ending October 31, 1999).

     The  second  area of  focus  has  been  an  assessment  of  non-traditional
information  technology,  which  includes the  electronics  in equipment such as
telephone  switches and manufacturing  equipment.  Inventories of this equipment
have been  completed  and  correspondence  has been  initiated  with vendors and
suppliers  of this  equipment.  The company is currently  evaluating  the vendor
responses and testing the  equipment.  After the testing phase is complete,  the
company will  conduct a review of the  inventories  and the testing  procedures,
with this phase  expected  to also be  completed  during  the second  quarter of
fiscal 2000.

     The third area of focus is  communications  with suppliers and customers to
understand  their level of readiness  and assure a constant flow of materials to
support  business  plans.  Communication  to  date  has  shown a high  level  of
awareness and planning by these parties.  The company has a response rate in the
60% - 70% range,  and at the present  time no material  problems or concerns are
indicated by these responses.  However,  if a significant  vendor or customer is
non-compliant,  the company can give no assurance that such  occurrence will not
have an adverse affect on the company's results. The company believes its action
plans will minimize these risks and prevent any major  interruptions in the flow
of materials and products.

     Formal  contingency  plans will not be  formulated  unless the  company has
identified  specific  areas  where  there  is a  substantial  risk of year  2000
problems occurring. No such areas have been identified.

     The plan is being  administered by a team of internal staff and management.
Costs incurred in the company's readiness effort are being expensed as incurred.
Anticipated costs are expected to approximate  $800,000 and to date an estimated
$700,000 has been spent. This project,  and the year 2000 issue in general, are
not expected to have a significant effect on the company's operations, though no
assurance can be given in this regard.

     The  discussion in this section  contains year 2000  readiness  disclosures
within the meaning of the Year 2000 Information and Readiness  Disclosure Act of
1998.

 Forward-Looking Information

     The company's  quarterly report on Form 10-Q contains statements that could
be deemed  "forward-looking  statements,"  within  the  meaning  of the  federal
securities   laws.  Such   statements  are  inherently   subject  to  risks  and
uncertainties.   Forward-looking   statements   are   statements   that  include
projections, expectations or beliefs about future events or results or otherwise
are not statements of historical  fact. Such statements are often  characterized
by  qualifying  words  such as  "expect,"  "believe,"  "estimate,"  "plan,"  and
"project"  and their  derivatives.  Factors  that could  influence  the  matters
discussed in such  statements  include the level of housing  starts and sales of
existing homes,  consumer  confidence,  trends in disposable  income and general
economic  conditions.  Decreases  in  these  economic  indicators  could  have a
negative effect on the company's business and prospects.  Likewise, increases in
interest rates, particularly home mortgage rates, and increases in consumer debt
or the general rate of inflation, could affect the company adversely. Because of
the  significant  percentage of the company's  sales derived from  international
shipments,  strengthening of the U.S. dollar against other currencies could make
the company's products less competitive on the basis of price in markets outside
the United  States.  Additionally,  economic and  political  instability  in the
international area could affect the demand for the company's products.

New Accounting Pronouncements

     In June 1998, the Financial  Accounting Standards Board issued Statement of
Financial  Accounting  Standards  (SFAS) No.  133,  "Accounting  for  Derivative
Instruments and Hedging Activities,"  effective for periods beginning after June
15,  2000,  although  early  adoption is  allowed.  This  statement  establishes
accounting and reporting standards for derivative instruments, including certain
derivative instruments embedded in other contracts,  and for hedging activities.
The company has not  determined  the financial  impact of adopting this SFAS and
has not determined if it will adopt its provisions prior to its effective date.





Item 3.  Quantitative and Qualitative Disclosures About Market Risk

     The  company is exposed to market risk from  changes in  interest  rates on
debt and foreign  currency  exchange rates.  The company's market risk sensitive
instruments  are not  entered  into for  trading  purposes.  The company has not
experienced any significant changes in market risk since August 1, 1999.

     The company's exposure to interest rate risk consists of floating rate debt
based on the London Interbank  Offered Rate plus an adjustable  margin under the
company's  revolving  credit agreement and variable rate debt in connection with
the industrial  revenue bonds. To lower or limit overall  borrowing  costs,  the
company  enters  into  interest  rate swap  agreements  to modify  the  interest
characteristics  of portions of its outstanding debt. The agreements entitle the
company to receive or pay to the  counterparty  (a major  bank),  on a quarterly
basis, the amounts,  if any, by which the company's interest payments covered by
swap  agreements  differ  from  those of the  counterparty.  These  amounts  are
recorded  as  adjustments  to  interest  expense.  The  fair  value  of the swap
agreements and changes in fair value  resulting from changes in market  interest
rates are not recognized in the consolidated  financial  statements.  The annual
impact on the company's results of operations of a 100 basis point interest rate
change on the August 1, 1999 outstanding balance of the variable rate debt would
be approximately $550,000 irrespective of any swaps associated with this debt.

     The company's  exposure to fluctuations in foreign currency  exchange rates
is due  primarily to a foreign  subsidiary  domiciled in Canada and purchases of
certain  machinery,  equipment  and raw  materials  in foreign  currencies.  The
company's  Canadian  subsidiary  uses the United States dollar as its functional
currency. The company generally does not use financial derivative instruments to
hedge  foreign  currency  exchange  rate  risks  associated  with  the  Canadian
subsidiary.  However, the company generally enters into foreign exchange forward
and option contracts as a hedge against its exposure to currency fluctuations on
firm commitments to purchase certain machinery, equipment and raw materials. The
Canadian  subsidiary  is not material to the company's  consolidated  results of
operations; therefore, the impact of a 10% change in the exchange rate at August
1,  1999  would  not have a  significant  impact  on the  company's  results  of
operations or financial  position.  In addition,  the company had  approximately
$3.7 million of outstanding  foreign exchange forward  contracts as of August 1,
1999.  As a result,  any change in exchange  rates would not have a  significant
impact on the  company's  results of  operations  or  financial  position as the
foreign exchange forward contracts have "fixed" the exchange rate.


Part II - Other Information

Item 6.   Exhibits and Reports on Form 8-K

      The following  exhibits are filed as part of this report or  incorporated
by reference.  Management  contracts,  compensatory plans, and arrangements are
marked with an asterisk (*).


     3(i)     Articles of  Incorporation  of the Company,  as amended,
              were filed as Exhibit  3(i) to the  Company's  Form 10-Q for
              the quarter  ended  January 29, 1995,  filed March 15, 1995,
              and are incorporated herein by reference.

     3(ii)    Restated and Amended Bylaws of the Company,  as amended,
              were filed as Exhibit  3(b) to the  Company's  Form 10-K for
              the year ended April 28, 1991,  filed July 25, 1991, and are
              incorporated herein by reference.

     10(a)    Loan  Agreement  dated  December  1, 1988 with  Chesterfield
              County,  South Carolina  relating to Series 1988  Industrial
              Revenue  Bonds in the  principal  amount of  $3,377,000  was
              filed as Exhibit  10(n) to the  Company's  Form 10-K for the
              year ended April 29,  1989,  and is  incorporated  herein by
              reference.

     10(b)    Loan  Agreement  dated  November  1, 1988 with the  Alamance
              County   Industrial   Facilities   and   Pollution   Control
              Financing  Authority  relating to Series A and B  Industrial
              Revenue   Refunding   Bonds  in  the  principal   amount  of
              $7,900,000,  was  filed as  exhibit  10(o) to the  Company's
              Form  10-K  for  the  year  ended  April  29,  1990,  and is
              incorporated herein by reference.

     10(c)    Loan  Agreement  dated  January  5, 1990  with the  Guilford
              County   Industrial   Facilities   and   Pollution   Control
              Financing  Authority,  North  Carolina,  relating  to Series
              1989  Industrial  Revenue Bonds in the  principal  amount of
              $4,500,000,  was  filed as  Exhibit  10(d) to the  Company's
              Form 10-K for the year ended April 19,  1990,  filed on July
              15, 1990, and is incorporated herein by reference.

     10(d)    Loan  Agreement   dated  as  of  December  1,  1993  between
              Anderson County,  South Carolina and the Company relating to
              $6,580,000   Anderson  County,   South  Carolina  Industrial
              Revenue Bonds (Culp,  Inc.  Project)  Series 1993, was filed
              as Exhibit 10(o) to the Company's  Form 10-Q for the quarter
              ended  January  30,  1994,  filed  March  16,  1994,  and is
              incorporated herein by reference.

     10(e)    Form of Severance Protection Agreement,  dated September 21,
              1989,  was filed as Exhibit 10(f) to the Company's Form 10-K
              for the year ended April 29,  1990,  filed on July 25, 1990,
              and is incorporated herein by reference. (*)

     10(f)    Lease  Agreement,  dated  January 19,  1990,  with  Phillips
              Interests,  Inc. was filed as Exhibit 10(g) to the Company's
              Form 10-K for the year ended April 29,  1990,  filed on July
              25, 1990, and is incorporated herein by reference.

     10(g)    Management Incentive Plan of the Company,  dated August 1986
              and  amended  July  1989,  filed  as  Exhibit  10(o)  to the
              Company's  Form 10-K for the year ended May 3,  1992,  filed
              on  August  4,   1992,   and  is   incorporated   herein  by
              reference.  (*)

     10(h)    Lease  Agreement,  dated September 6, 1988, with Partnership
              74 was filed as  Exhibit  10(h) to the  Company's  Form 10-K
              for the year ended April 28,  1991,  filed on July 25, 1990,
              and is incorporated herein by reference.

     10(i)    Amendment  and  Restatement  of  the  Employee's  Retirement
              Builder  Plan  of  the  Company   dated  May  1,  1981  with
              amendments  dated  January 1, 1990 and  January 8, 1990 were
              filed as Exhibit  10(p) to the  Company's  Form 10-K for the
              year  ended May 3,  1992,  filed on August 4,  1992,  and is
              incorporated herein by reference. (*)

     10(j)    First  Amendment of Lease Agreement dated July 27, 1992 with
              Partnership  74 Associates was filed as Exhibit 10(n) to the
              Company's  Form 10-K for the year ended May 2,  1993,  filed
              on July 29, 1993, and is incorporated herein by reference.

     10(k)    Second  Amendment of Lease  Agreement  dated April 16, 1993,
              with  Partnership  52 Associates  was filed as Exhibit 10(l)
              to the  Company's  Form 10-K for the year ended May 2, 1993,
              filed  on July  29,  1993,  and is  incorporated  herein  by
              reference.

     10(l)    1993 Stock  Option  Plan was filed as  Exhibit  10(o) to the
              Company's  Form 10-K for the year ended May 2,  1993,  filed
              on July 29, 1993, and is  incorporated  herein by reference.
              (*)

     10(m)    First  Amendment to Loan  Agreement  dated as of December 1,
              1993  by  and  between  The   Guilford   County   Industrial
              Facilities  and Pollution  Control  Financing  Authority and
              the  Company  was filed as  Exhibit  10(p) to the  Company's
              Form  10-Q,  filed on March 15,  1994,  and is  incorporated
              herein by reference.

     10(n)    First  Amendment to Loan Agreement  dated as of December 16,
              1993  by  and  between  The   Alamance   County   Industrial
              Facilities  and Pollution  Control  Financing  Authority and
              the  Company  was filed as  Exhibit  10(q) to the  Company's
              Form  10-Q,  filed on March 15,  1994,  and is  incorporated
              herein by reference.

     10(o)    First  Amendment to Loan Agreement  dated as of December 16,
              1993 by and between  Chesterfield County, South Carolina and
              the  Company  was filed as  Exhibit  10(r) to the  Company's
              Form  10-Q,  filed on March 15,  1994,  and is  incorporated
              herein by reference.

     10(p)    Amendment  to Lease  dated as of  November  4, 1994,  by and
              between  the  Company  and RDC,  Inc.  was filed as  Exhibit
              10(w) to the  Company's  Form 10-Q,  for the  quarter  ended
              January  29,  1995,   filed  on  March  15,  1995,   and  is
              incorporated herein by reference.

     10(q)    Amendment to Lease  Agreement dated as of December 14, 1994,
              by and between the Company and Rossville  Investments,  Inc.
              (formerly  known  as A & E  Leasing,  Inc.),  was  filed  as
              Exhibit  10(y) to the Company's  Form 10-Q,  for the quarter
              ended  January 29,  1995,  filed on March 15,  1995,  and is
              incorporated herein by reference.

     10(r)    Interest  Rate  Swap  Agreement  between  Company  and First
              Union  National Bank of North Carolina dated April 17, 1995,
              was filed as Exhibit  10(aa) to the Company's  Form 10-K for
              the year ended April 30, 1995,  filed on July 26, 1995,  and
              is incorporated herein by reference.

     10(s)    Performance-Based  Stock Option  Plan,  dated June 21, 1994,
              was filed as Exhibit  10(bb) to the Company's  Form 10-K for
              the year ended April 30, 1995,  filed on July 26, 1995,  and
              is incorporated herein by reference. (*)

     10(t)    Interest  Rate  Swap  Agreement  between  Company  and First
              Union  National Bank of North  Carolina,  dated May 31, 1995
              was filed as exhibit  10(w) to the  Company's  Form 10-Q for
              the quarter  ended July 30,  1995,  filed on  September  12,
              1995, and is incorporated herein by reference.

     10(u)    Interest  Rate  Swap  Agreement  between  Company  and First
              Union  National Bank of North  Carolina,  dated July 7, 1995
              was filed as exhibit  10(x) to the  Company's  Form 10-Q for
              the quarter  ended July 30,  1995,  filed on  September  12,
              1995, and is incorporated herein by reference.

     10(v)    Second  Amendment  of Lease  Agreement  dated June 15,  1994
              with  Partnership  74 Associates  was filed as Exhibit 10(v)
              to the  Company's  Form 10-Q for the quarter  ended  October
              29, 1995,  filed on December 12, 1995,  and is  incorporated
              herein by reference.

     10(w)    Lease  Agreement  dated  November 1, 1993 by and between the
              Company and  Chromatex,  Inc. was filed as Exhibit  10(w) to
              the  Company's  Form 10-Q for the quarter  ended October 29,
              1995,  filed  on  December  12,  1995,  and is  incorporated
              herein by reference.

     10(x)    Lease  Agreement  dated  November 1, 1993 by and between the
              Company and Chromatex Properties,  Inc. was filed as Exhibit
              10(x)  to the  Company's  Form  10-Q for the  quarter  ended
              October  29,  1995,  filed  on  December  12,  1995,  and is
              incorporated herein by reference.

     10(y)    Amendment  to  Lease  Agreement  dated  May 1,  1994  by and
              between the  Company  and  Chromatex  Properties,  Inc.  was
              filed as Exhibit  10(y) to the  Company's  Form 10-Q for the
              quarter ended October 29, 1995,  filed on December 12, 1995,
              and is incorporated herein by reference.

     10(z)    Canada-Quebec   Subsidiary   Agreement   on   Industrial
              Development  (1991),  dated  January 4,  1995,  was filed as
              Exhibit  10(z) to the  Company's  Form 10-Q for the  quarter
              ended October 29, 1995,  filed on December 12, 1995,  and is
              incorporated herein by reference.

    10(aa)    Loan Agreement between  Chesterfield  County, South Carolina
              and the  Company  dated as of April 1, 1996  relating to Tax
              Exempt  Adjustable Mode Industrial  Development Bonds (Culp,
              Inc.  Project)  Series  1996  in  the  aggregate   principal
              amount  of  $6,000,000  was filed as  Exhibit  10(aa) to the
              Company's  Form 10-K for the year ended April 28, 1996,  and
              is incorporated herein by reference.

    10(bb)    Loan  Agreement   between  the  Alamance  County  Industrial
              Facilities and Pollution Control Financing Authority,  North
              Carolina and the Company,  dated December 1, 1996,  relating
              to  Tax  Exempt   Adjustable  Mode  Industrial   Development
              Revenue  Bonds,  (Culp,  Inc.  Project  Series  1996) in the
              aggregate  amount of $6,000,000  was filed as Exhibit 10(cc)
              to the  Company's  Form 10-Q for the quarter  ended  January
              26, 1997, and is incorporated herein by reference.

    10(cc)    Loan Agreement between Luzerne County,  Pennsylvania and the
              Company,   dated  as  of  December  1,  1996,   relating  to
              Tax-Exempt  Adjustable Mode Industrial  Development  Revenue
              Bonds  (Culp,  Inc.  Project)  Series 1996 in the  aggregate
              principal  amount of $3,500,000  was filed as Exhibit 10(dd)
              to the  Company's  Form 10-Q for the quarter  ended  January
              26, 1997, and is incorporated herein by reference.

    10(dd)    Second  Amendment  to  Lease  Agreement   between  Chromatex
              Properties,  Inc. and the Company,  dated April 17, 1997 was
              filed as Exhibit  10(dd) to the Company's  Form 10-K for the
              year ended April 27,  1997,  and is  incorporated  herein by
              reference.

    10(ee)    Lease  Agreement  between Joseph E. Proctor (doing  business
              as JEPCO) and the  Company,  dated  April 21, 1997 was filed
              as Exhibit  10(ee) to the  Company's  Form 10-K for the year
              ended  April  27,  1997,  and  is  incorporated   herein  by
              reference.

    10(ff)    $125,000,000  Revolving  Loan Facility  dated April 23, 1997
              by and among  the  Company  and  Wachovia  Bank of  Georgia,
              N.A.,  as agent,  and  First  Union  National  Bank of North
              Carolina,  as  documentation  agent  was  filed  as  Exhibit
              10(ff) to the  Company's  Form 10-K for the year ended April
              27, 1997, and is incorporated herein by reference.

    10(gg)   Revolving  Line of  Credit  for  $4,000,000  dated  April 23,
             1997 by and between the  Company and  Wachovia  Bank of North
             Carolina,  N.A. was filed as Exhibit  10(gg) to the Company's
             Form  10-K  for  the  year  ended  April  27,  1997,  and  is
             incorporated herein by reference.

    10(hh)   Reimbursement  and Security  Agreement between Culp, Inc. and
             Wachovia  Bank of  North  Carolina,  N.A.,  dated as of April
             1,   1997,   relating   to   $3,337,000   Principal   Amount,
             Chesterfield   County,   South  Carolina  Industrial  Revenue
             Bonds (Culp,  Inc.  Project) Series 1988 was filed as Exhibit
             10(hh) to the  Company's  Form 10-K for the year ended  April
             27, 1997, and is incorporated herein by reference.

             Additionally,    there   are   Reimbursement   and   Security
             Agreements  between  Culp,  Inc. and  Wachovia  Bank of North
             Carolina,  N.A.,  dated as of April 1, 1997 in the  following
             amounts and with the following facilities:

             $7,900,000  Principal  Amount,   Alamance  County  Industrial
             Facilities   and  Pollution   Control   Financing   Authority
             Industrial  Revenue  Refunding  Bonds  (Culp,  Inc.  Project)
             Series A and B.

             $4,500,000  Principal  Amount,   Guilford  County  Industrial
             Facilities   and  Pollution   Control   Financing   Authority
             Industrial  Development  Revenue Bonds (Culp,  Inc.  Project)
             Series 1989.

             $6,580,000  Principal Amount,  Anderson County South Carolina
             Industrial Revenue Bonds (Culp, Inc. Project)  Series 1993.

             $6,000,000  Principal  Amount,   Chesterfield  County,  South
             Carolina  Tax-Exempt  Adjustable Mode Industrial  Development
             Revenue Bonds (Culp, Inc. Project) Series 1996.

             $6,000,000  Principal Amount,  The Alamance County Industrial
             Facilities   and  Pollution   Control   Financing   Authority
             Tax-exempt  Adjustable  Mode Industrial  Development  Revenue
             Bonds (Culp, Inc. Project) Series 1996.

             $3,500,000   Principal  Amount,   Luzerne  County  Industrial
             Development  Authority Tax-Exempt  Adjustable Mode Industrial
             Development Revenue Bonds (Culp, Inc. Project) Series 1996.



    10(ii)   Loan Agreement and Reimbursement and Security Agreement dated
             July 1, 1997 with the  Robeson  County  Industrial Facilities
             and Pollution  Control  Financing  Authority  relating to the
             issuance   of   Tax-Exempt    Adjustable    Mode   Industrial
             Development  Revenue Bonds (Culp, Inc. Project),  Series 1997
             in the aggregate  principal  amount of  $8,500,000  was filed
             as  Exhibit  10(ii)  to  the  Company's  Form  10-Q  for  the
             quarter ended August 3, 1997, and is  incorporated  herein by
             reference.

    10(jj)   Asset  Purchase  Agreement  dated as of August 4, 1997 by and
             between Culp, Inc.,  Phillips Weaving Mills,  Inc.,  Phillips
             Printing Mills, Inc.,  Phillips Velvet Mills, Inc.,  Phillips
             Mills,  Inc.,   Phillips  Property  Company,   LLC,  Phillips
             Industries,  Inc. and S. Davis  Phillips was filed as Exhibit
             (10jj)  to the  Company's  Form  10-Q for the  quarter  ended
             November 2, 1997, and is incorporated herein by reference.

    10(kk)   Asset Purchase  Agreement  dated as of October 14, 1997 among
             Culp,  Inc.,  Artee  Industries,   Incorporated,   Robert  T.
             Davis,  Robert L. Davis,  Trustee u/a dated  8/25/94,  Robert
             L.  Davis,  Louis W. Davis,  Kelly D.  England,  J.  Marshall
             Bradley,  Frankie S.  Bradley and Mickey R. Bradley was filed
             as  Exhibit  10(kk)  to  the  Company's  Form  10-Q  for  the
             quarter ended  November 2, 1997, and is  incorporated  herein
             by reference.

    10(ll)   Form of Note Purchase Agreement  (providing for the issuance
             by  Culp,  Inc.  of its $20  million  6.76%  Series A Senior
             Notes due 3/15/08 and its $55 million  6.76% Series B Senior
             Notes due 3/15/10),  each dated March 4, 1998, between Culp,
             Inc. and each of the following:
             1. Connecticut General Life Insurance Company;
             2. The Mutual Life Insurance Company of New York;
             3. United of Omaha Life Insurance Company;
             4. Mutual of Omaha Insurance Company;
             5. The Prudential Insurance Company of  America;
             6. Allstate Life Insurance Company;
             7. Life Insurance Company of North America;  and
             8. CIGNA Property and Casualty Insurance Company
             This  agreement was filed as Exhibit 10(ll) to the Company's
             Form  10-K  for  the  year  ended  May  3,   1998,   and  is
             incorporated herein by
             reference.

    10(mm)   First  Amendment  to Credit  Agreement  dated July 22,  1998
             among Culp,  Inc.,  Wachovia  Bank,  N.A.,  as agent,  First
             Union National Bank, as  documentation  agent,  and Wachovia
             Bank,  N.A.,  First  Union  National  Bank,  SunTrust  Bank,
             Atlanta,          and         Cooperatieve          Centrale
             Raiffeisen-Boerenleeenbank  B.A.,  Rabobank  Nederland,  New
             York  Branch,  as  lenders.  This  amendment  was  filed  as
             Exhibit  10(mm) to the  Company's  Form 10-Q for the quarter
             ended  August  2,  1998,  and  is  incorporated   herein  by
             reference.

    10(nn)   Second  Amendment  to Credit  Agreement  dated  October  26,
             1998,  among Culp,  Inc.,  Wachovia  Bank,  N.A.,  as agent,
             First Union  National  Bank,  as  documentation  agent,  and
             Wachovia  Bank,   N.A.,   First  Union  National  Bank,  and
             SunTrust  Bank,  Atlanta,  as lenders.  This  amendment  was
             filed as Exhibit  10(nn) to the Company's  Form 10-Q for the
             quarter ended November 1, 1998, and is  incorporated  herein
             by reference.

     27      Financial Data Schedule

(b)  Reports on Form 8-K:

The following report on Form 8-K was filed during the period covered by this
report:

   (1)      Form 8-K dated June 2, 1999, included under Item 5, Other Events,
      included the Company's press release for quarterly earnings and the
      Financial Information Release relating to certain financial information
      for the quarter ended May 2, 1999.




                                   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 thereunto duly authorized.


                               CULP, INC.
                               (Registrant)


Date:   September 15, 1999 By:  s/s Phillip W. Wilson
                                    Phillip W. Wilson
                                    Vice President and Chief Financial
                                    and Accounting Officer

                                    (Authorized to sign on behalf
                                    of the registrant and also sign-
                                    ing as principal financial officer)

  


                     5
                                   1000

                                        
                                  3-MOS
                              Apr-30-2000
                                 May-03-1999
                                   Aug-01-1999
                                           1,097
                                         0
                                   64,690
                                    (2,706)
                                     75,337
                               149,278
                                         237,180
                                (116,209)
                                 327,822
                           48,884
                                              0
                                0
                                          0
                                           602
                                     127,525
                   327,822
                                        115,937
                               115,937
                                           95,525
                                   95,525
                                15,038
                                     0
                               2,416
                                  2,420
                                       823
                              1,597
                                       0
                                      0
                                            0
                                     1,597
                                     0.13
                                     0.13