CULP TO ACQUIRE THE UPHOLSTERY FABRICS DIVISION OF PHILLIPS INDUSTRIES; TRANSACTION VALUED AT $47 MILLION.

HIGH POINT, N.C.--(BUSINESS WIRE)--April 30, 1997--Culp, Inc. (NYSE: CFI) today announced that it has signed a letter of intent to acquire the business and certain assets relating to the upholstery fabric businesses operating as Phillips Weaving Mills, Phillips Velvet Mills, Phillips Printing and Phillips Mills. These operating units are owned by Phillips Industries, Inc. which is a privately owned corporation based in High Point, North Carolina and owned by Dave Phillips, former Secretary of Commerce for the State of North Carolina. Closing of the transaction, which is subject to a definitive asset purchase agreement and certain other conditions set forth in the letter of intent, is expected within the next 60 days. The transaction is valued at approximately $47 million and involves the purchase of assets for cash, notes, consulting services and a non-compete agreement. In addition, there is the assumption of certain liabilities and contracts as well as the issuance of an option for 100,000 shares of stock valued at the market price on the day of closing.

"We are excited about the opportunity to acquire this outstanding company and for Phillips to operate as a new business unit of Culp," remarked Robert G. Culp, III, chief executive officer. "Phillips is a successful, well-managed company that has achieved a strong competitive position as one of the nation's leading suppliers of upholstery fabrics. Phillips generated sales of approximately $53 million in 1996 from a broad line of woven jacquards, prints and velvets with innovative designs. These are product categories in which Culp also has an extensive marketing effort. The addition of Phillips will expand the range of our designs and our product versatility and thereby equip us to meet more of the needs of customers. Dave Phillips said, "Culp is a great company that provides an excellent opportunity for Phillips to utilize Culp's manufacturing resources, accelerate its growth and expand the volume of international sales."

Culp commented, "The acquisition of Phillips would represent the latest in a series of acquisitions over the past several years that have helped position Culp as the world's largest manufacturer and marketer of upholstery fabrics for furniture. Coupled with a major capital investment initiative, these transactions have served not only to establish us as a vertically integrated marketing organization but also to broaden our product line. The trend is clearly toward further consolidation within the home furnishings industry, making it imperative for us to meet the standards imposed on suppliers by large furniture manufacturers. We are pleased that Culp's strong balance sheet has supported our continuing programs to meet higher product quality and delivery requirements as well as our interest in pursuing strategic acquisitions of complementary businesses."

The assets that Culp has agreed to acquire include manufacturing facilities in Monroe and Jamestown, North Carolina. The facilities at Monroe produce woven jacquards, and the plant at Jamestown manufactures woven and tufted velvets. Additionally, the purchase includes a printed fabrics converting business located in High Point. The transaction also includes distribution centers in High Point, North Carolina, Tupelo, Mississippi and Los Angeles, California.

Culp is the largest manufacturer and marketer of furniture upholstery fabrics in the world and is a leading producer of mattress ticking. The company's fabrics are used principally in the production of residential and commercial furniture and bedding products.

CONTACT: Culp, Inc., High Point

Franklin N. Saxon, 910/888-6266