Culp Reports Second Quarter Earnings; Results Signal Improvement Compared With First Period.

HIGH POINT, N.C.--(BUSINESS WIRE)--Nov. 18, 1998--Culp, Inc. (NYSE: CFI) today reported net sales and net income for the second quarter of its 1999 fiscal year.

For the three months ended November 1, 1998, Culp reported that net sales increased 4.3% to $128.2 million compared with $122.9 million a year ago. Net income for the quarter was $1.3 million, or $0.10 per share diluted, compared with $4.5 million, or $0.35 per share diluted, a year ago.

Net sales for the first half of fiscal 1999 totaled $238.8 million, up 7.4% from $222.4 million in the first six months of fiscal 1998. The company reported a loss for the first half of $1.3 million, or $0.10 per share, compared with net income of $7.4 million, or $0.57 per share diluted, in the year-earlier period.

"The net income for the second quarter represents a gratifying improvement compared with our corporate performance in the first period," said Robert G. Culp, III, chief executive officer. "We are encouraged by the progress realized to date through the actions taken to restore Culp's profitability. Our focus has included reducing costs and lowering manufacturing capacity, especially related to our international business, to match the lower level of demand that has persisted this year. We did achieve higher sales for the second quarter and first half; but those gains were due to the contributions from acquired operations.

"Our goal is to realize further progress over the remainder of this fiscal year, but we do not expect the full impact of the changes we have made to become apparent until during fiscal 2000. During the second quarter, we restructured the sales organizations for two of our four business units, Culp Decorative Fabrics and Culp Velvets/Prints. This realignment in marketing personnel was a logical extension of the corporate reorganization that was implemented earlier this year to reflect the expanded size of our business units and to support the company's planned future expansion. The response within our organization has been very supportive of these moves, and that commitment further supports our fundamental confidence about Culp's prospects."

Culp added, "Some forecasts have emerged that suggest concern about an overall economic slowdown over the next several quarters. The latest trends in factors such as consumer confidence, employment levels and mortgage rates, however, suggest a favorable outlook for overall consumer spending on home furnishings. We are very pleased with the response to the new patterns and textures that Culp introduced to retailers at the recent trade conference. Enhancing the value of our fabrics to manufacturers of furniture and bedding remains our mission, and the continued integration of our expanded design resources with the company's broad manufacturing capabilities is a vital component in our strategy."

Culp, Inc. is the world's largest manufacturer and marketer of upholstery fabrics for furniture and is a leading producer of mattress ticking for bedding. The Company's fabrics are used primarily in the production of residential and commercial furniture and bedding products. -0-

                             CULP, INC.
                   Condensed Financial Highlights
                             (Unaudited)
                                           Three Months Ended
                                       ---------------------------
                                        November 1,    November 2,
                                           1998           1997
                                       ------------   ------------
Net sales                              $128,159,000   $122,926,000
Net income                             $  1,307,000   $  4,505,000
Net income per share:
  Basic                                $       0.10   $       0.36
  Diluted                              $       0.10   $       0.35
Average shares outstanding:
  Basic                                  12,995,000     12,668,000
  Diluted                                13,120,000     12,980,000

                                            Six Months Ended
                                       ---------------------------
                                        November 1,    November 2,
                                           1998           1997
                                       -------------  ------------
Net sales                              $238,826,000   $222,424,000
Net income (loss)                      $ (1,333,000)  $  7,355,000
Net income (loss) per share:
  Basic                                $      (0.10)  $       0.58
  Diluted                              $      (0.10)  $       0.57
Average shares outstanding:
  Basic                                  12,998,000     12,649,000
  Diluted                                13,175,000     12,953,000

This release 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 increasing percentage of the company's sales derived by 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 international areas could affect the demand for the company's products.