<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>c10kfy01.txt
<DESCRIPTION>CULP, INC. 10-K   4-29-01
<TEXT>





                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D. C. 20549

                                   FORM 10-K

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

                   For the fiscal year ended April 29, 2001

                          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)

       Securities registered pursuant to Section 12(b) of the Act: NONE

          Securities registered pursuant to Section 12(g) of the Act:

                      Common Stock, Par Value $.05/Share

     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 ____

     Indicate by check mark if  disclosure of  delinquent  filers  pursuant to
Item 405 of Regulation SK is not contained herein,  and will not be contained,
to the best of  registrant's  knowledge,  in definitive  proxy or  information
statements  incorporated  by  reference  in Part III of this  Form 10-K or any
amendment to this Form 10-K. [   ]

     As  of  July  23,   2001,   11,221,158    shares  of  common  stock  were
outstanding.   The  aggregate  market  value  of  the  voting  stock  held  by
non-affiliates  of the  registrant on that date was  $30,563,511  based on the
closing  sales  price of such stock as quoted on the New York  Stock  Exchange
(NYSE),  assuming,  for purposes of this report,  that all executive  officers
and directors of the registrant are affiliates.

                      DOCUMENTS INCORPORATED BY REFERENCE

Part III
     Portions  of the  Company's  Proxy  Statement  dated  August 20,  2001 in
connection  with its Annual  Meeting of  Shareholders  to be held on September
26, 2000 are incorporated by reference into Items 10, 11, 12 and 13.




<PAGE>

                                    CULP, INC.
                               FORM 10-K REPORT
                               TABLE OF CONTENTS

Item No.                                                                  Page
                                    PART I

1.    Business
         Overview............................................................3
         Segments............................................................4
         Business Strategy...................................................5
         Capital Expenditures................................................6
         Overview of Industry................................................6
         Overview of Residential Furniture Industry..........................6
         Overview of Commercial Furniture Industry...........................7
         Overview of Bedding Industry........................................7
         Products............................................................8
         Manufacturing......................................................10
         Product Design and Styling.........................................10
         Distribution.......................................................11
         Sources and Availability of Raw Materials..........................11
         Competition........................................................12
         Technology.........................................................12
         Environmental and Other Regulations................................13
         Employees..........................................................13
         Customers and Sales................................................13
         Net Sales by Geographic Area.......................................14
         Backlog............................................................14

2.    Properties............................................................15

3.    Legal Proceedings.....................................................16

4.    Submission of Matters to a Vote of Security Holders...................16


                                    PART II

5.    Market for the Registrant's Common Stock
        and Related Stockholder Matters.....................................16

6.    Selected Financial Data...............................................17

7.    Management's Discussion and Analysis of
        Financial Condition and Results of Operations.......................18

7A.   Quantitative and Qualitative Disclosures
        About Market Risk...................................................24


<PAGE>


8.    Consolidated Financial Statements and Supplementary Data..............25

9.    Changes in and Disagreements with Accountants
        on Accounting and Financial Disclosure..............................43




                                   PART III

10.   Directors and Executive Officers of the
        Registrant..........................................................43

11.   Executive Compensation................................................43

12.   Security Ownership of Certain
        Beneficial Owners and Management....................................43

13.   Certain Relationships and Related
        Transactions........................................................43


                                    PART IV

14.   Exhibits, Financial Statement Schedules
        and Reports on Form 8-K.............................................44

      Documents filed as part of this report................................44

      Exhibits..............................................................45

      Reports on Form 8-K...................................................50

      Financial Statement Schedules.........................................50

      Signatures ...........................................................51

<PAGE>
                                    PART I

                               ITEM 1. BUSINESS

Overview

      Culp, Inc. (the Company)  manufactures  and markets  upholstery  fabrics
and  mattress  tickings  primarily  for  use  in the  furniture  (residential,
commercial  and juvenile) and bedding  industries  on a worldwide  basis.  The
Company's  executive  offices are located in High Point,  North Carolina.  The
Company was  organized as a North  Carolina  corporation  in 1972 and made its
initial  public  offering in 1983.  Since 1997, the Company has been listed on
the New York Stock Exchange and traded under the symbol "CFI."

      Culp is one of the largest integrated  marketers of furniture upholstery
fabrics in the world and is a leading  global  producer  of  mattress  fabrics
(known as mattress  ticking).  The Company's  fabrics are used  principally in
the production of residential and commercial  furniture and bedding  products,
including sofas, recliners, chairs, loveseats,  sectionals,  sofa-beds, office
seating,  panel  systems and mattress  sets.  Culp markets one of the broadest
product  lines in its  industry,  with a wide  range of fabric  constructions,
patterns,  colors,  textures and  finishes.  This breadth is made  possible by
Culp's  extensive  manufacturing   capabilities  that  include  a  variety  of
weaving,  printing and finishing operations and the ability to produce various
yarns  and  unfinished  base  fabrics  (known  as  greige  goods)  used in its
products.   Although   most  of  the  Company's   competitors   emphasize  one
particular  type of fabric,  Culp  competes  in every  major  category  except
leather,  which  accounts for a relatively  small  portion of the  residential
furniture  market.  Culp's  staff of over 60 designers  and support  personnel
utilize  Computer  Aided Design  (CAD)  systems to develop the  Company's  own
patterns and styles.  Culp's product line  currently  includes more than 3,000
upholstery fabric patterns and 1,000  mattress-ticking  styles.  Although Culp
markets fabrics at most price levels,  the Company has emphasized fabrics that
have a broad appeal in the "good" and "better"  price  categories of furniture
and bedding.

      Culp markets its products worldwide,  with sales to customers in over 50
countries.  Total sales were $409.8  million in fiscal 2001, and the Company's
international  sales totaled $77.8  million  during fiscal 2001.  Shipments to
U.S.-based  customers continue to account for most of the Company's sales, but
Culp's  global  presence  has led to a  significant  proportion  of  sales  to
international  accounts  (19% of net sales for  fiscal  2001).  The  Company's
network of 22 international  sales agents  represents Culp's products in major
furniture and bedding markets outside the United States.

      Culp has twelve (12) manufacturing facilities,  with a combined total of
2.2  million  square  feet,  that are  located in North  Carolina  (8),  South
Carolina   (2),   Tennessee   (1)  and  Quebec,   Canada  (1).  The  Company's
distribution   system  is  designed  to  offer  customers   fast,   responsive
delivery.  Products  are shipped  directly  to  customers  from the  Company's
manufacturing   facilities,  as  well  as  from  three  regional  distribution
facilities  strategically located in High Point, North Carolina,  Los Angeles,
California,   and   Tupelo,   Mississippi,   which  are  areas   with  a  high
concentration   of   furniture   manufacturing.   Additionally,   the  Company
maintains an inventory of upholstery  fabrics at a warehouse facility in Grand
Rapids,  Michigan to supply large commercial  furniture  manufacturers in that
area.

Segments

      The Company's  operating  segments are  upholstery  fabrics and mattress
ticking,   with  related  divisions  organized  within  those  segments.   The
divisions  within  upholstery  fabrics  are  Culp  Decorative  Fabrics,   Culp
Velvets/Prints  and Culp Yarn. The division  within  mattress  ticking is Culp
Home  Fashions.  Each  division  is  accorded  considerable  autonomy  and  is
responsible for designing,  manufacturing and marketing its respective product
lines. Significant synergies exist among the divisions,  including the sharing
of common raw materials made internally,  such as polypropylene yarns, certain
dyed and spun yarns, greige goods and printed  heat-transfer  paper.  Products
manufactured  at one division's  facility are commonly  transferred to another
division's   facility  for  additional   value-added   processing  steps.  The
following  table  sets forth  certain  information  for each of the  Company's
segments/divisions.


                          Culp's Segments/Divisions

                                            FISCAL 2001     PRODUCT LINES
                                             NET SALES      (BASE CLOTH, IF
      SEGMENT              DIVISION        (in millions)    APPLICABLE)
------------------  ----------------------- -----------     --------------------
Upholstery Fabrics  Culp Decorative Fabrics   $170.3        Woven jacquards
                                                            Woven dobbies

                    Culp Velvets/Prints       $122.1        Wet prints (flocks)
                                                            Heat-transfer prints
                                                            (jacquard, flock)
                                                            Cotton prints
                                                            Woven velvets
                                                            Tufted velvets
                                                            (woven polyester)

                    Culp Yarn                 $ 12.6        Pre-dyed spun yarns
                                                            Chenille yarns

Mattress Ticking    Culp Home Fashions        $104.8        Woven jacquards
                                                            Heat-transfer prints
                                                            (jacquard, knit,
                                                            sheeting)
                                                            Pigment prints
                                                            (jacquard, knit,
                                                            sheeting, non-woven)



      Culp  Decorative  Fabrics.  Culp  Decorative  Fabrics  manufactures  and
markets  jacquard and dobby woven fabrics used primarily for  residential  and
commercial  furniture.  During 2001, the Company  implemented a  restructuring
plan  designed  to  increase  efficiencies  and  eliminate  cost.  The Company
consolidated  the  operations  from  the  Monroe,   North  Carolina  and  West
Hazleton,   Pennsylvania  facilities  into  the  remaining  facilities,  which
resulted  in  the  closure  of  these  operations.  Culp  Decorative  Fabrics'
manufacturing   facilities  are  located  in  Burlington  and  Graham,   North
Carolina,   Pageland,  South  Carolina,  and  Chattanooga,   Tennessee.   Culp
Decorative   Fabrics   has   become   increasingly    vertically   integrated,
complementing its extensive weaving  capabilities with the ability to extrude,
dye and  texturize  yarn.  The  designs  marketed by Culp  Decorative  Fabrics
range  from  intricate,  complicated  patterns  such as  floral  and  abstract
designs to  patterns  associated  with casual  living  styles that are popular
with motion  furniture.  Culp Decorative  Fabrics accounts for the majority of
the  Company's  sales  to  the  commercial   furniture  market.   The  Company
maintains an inventory at a third-party  warehouse in Grand  Rapids,  Michigan
to supply  fabrics  marketed by Culp  Decorative  Fabrics to large  commercial
furniture manufacturers on a "just in time" basis.

      Culp  Velvets/Prints.  Culp  Velvets/Prints  manufactures  and markets a
broad range of printed and velvet fabrics.  These include  wet-printed designs
on flock  base  fabrics,  heat-transfer  prints on  jacquard  and  flock  base
fabrics,  cotton  prints,  woven  velvets and tufted  velvets.  These  fabrics
typically offer  manufacturers  richly colored patterns and textured surfaces.
Recent  product  development  improvements  in  manufacturing  processes  have
significantly  enhanced  the  quality  of  printed  flock  fabrics  which  are
principally  used for residential  furniture.  These fabrics are also used for
other  upholstered  products  such  as  baby  car  seats.  These  fabrics  are
manufactured at Burlington,  North  Carolina,  Anderson,  South Carolina,  and
Lumberton, North Carolina.

      Culp Yarn.  Culp Yarn  manufactures  and  markets a variety of  pre-dyed
spun yarns, including WrapSpun(TM), open-end spun and chenille yarns. In 2001,
as part of the Company's  restructuring  plans,  the Company exited the carpet
and  ring-spun  apparel  markets.  This action  resulted in the closure of the
facility in Wetumpka,  Alabama.  Culp Yarn operates  manufacturing  facilities
in  Shelby,  Cherryville,   and  Lincolnton,   North  Carolina.  Most  of  the
production  of Culp  Yarn is used  internally  by other  Culp  divisions.  The
external sales are directed to the upholstery fabric market,  and a portion of
these  shipments are to competitors of Culp.  Culp Yarn has provided Culp more
control  over its  supply  of spun and  chenille  yarns and  complemented  the
Company's increased emphasis on developing new designs.

      Culp Home  Fashions.  Culp Home Fashions  principally  markets  mattress
ticking to bedding  manufacturers.  These  fabrics  encompass  woven  jacquard
ticking as well as heat-transfer and  pigment-printed  ticking on a variety of
base fabrics,  including jacquard,  knit,  poly/cotton  sheeting and non-woven
materials.  Culp Home Fashions has  successfully  blended its diverse printing
and  finishing  capabilities  with its access to a variety of base  fabrics to
offer  innovative  designs to bedding  manufacturers  for  mattress  products.
Printed  jacquard  fabrics  offer  customers  better  values with  designs and
textures of more  expensive  fabrics.  Jacquard  greige goods  printed by Culp
Home  Fashions are primarily  provided by the  division's  Rayonese  facility.
Culp Home Fashions' manufacturing facilities are located in Stokesdale,  North
Carolina and St. Jerome, Quebec.

Business Strategy

      The  Company's  plan to  maintain  leadership  in the global  upholstery
fabric and  mattress  ticking  segments is based on a business  strategy  that
includes four main initiatives:

      Customer  Service and Vertical  Integration  - continuing to enhance the
competitive  value of its upholstery  fabrics and mattress  ticking  through a
company-wide  initiative to raise  efficiency  and improve  customer  service.
Important  aspects of this program have  included  attaining  more  consistent
product  quality,  improving  delivery  standards and offering more innovative
designs.  The  Company's  ability to realize  progress  in these  areas in the
past has been aided  significantly  by  becoming  more  vertically  integrated
through    capital    expansion    projects   and   strategic    acquisitions.
Representative  steps have included adding  capacity for producing  unfinished
jacquard  greige  goods,  extruding  polypropylene  yarn  and  most  recently,
manufacturing spun and specialty yarn.

      Broad  Product  Offering  -  continuing  to market  one of the  broadest
product  lines in upholstery  fabrics and mattress  ticking,  consistent  with
customer  demand.  Through  its  extensive  manufacturing  capabilities,   the
Company competes in every major category except leather.

      Diverse  Global  Customer Base - increasing its  penetration  into other
end-use markets in addition to U.S.  residential  furniture,  such as bedding,
international, commercial furniture and juvenile furniture.

      Design  Innovation  -  continuing  to  invest  in  personnel  and  other
resources  for the design of  upholstery  fabrics and ticking  with  appealing
patterns and  textures.  An integral  component of the value Culp  provides to
customers is supplying  fabrics that are fashionable and meet current consumer
preferences.  The Company's  principal  design  resources are now consolidated
in a single  facility  that  provides  advanced  CAD  systems  and  promotes a
sharing of innovative designs among the divisions.

Capital Expenditures

      Since fiscal 1996,  the Company has invested  $104.1  million in capital
expenditures  to expand its  manufacturing  capacity,  install more  efficient
production   equipment  and  vertically   integrate  its   operations.   These
expenditures  have included,  among other things,  the  installation of narrow
and wide-width  weaving machines and additional  printing equipment to support
the growth in woven and printed upholstery  fabrics and mattress ticking.  The
Company  spent  approximately  $8.1  million  in capital  expenditures  during
fiscal 2001,  primarily for modernization.  This level of capital spending was
below the $22.6 million in capital  expenditures  during fiscal 2000. Projects
to modernize existing facilities  encompassed several investments in looms and
finishing  equipment  throughout  the  Company's  operations.  The  Company is
currently  planning on capital  expenditures  for fiscal 2002 of approximately
$4 million.

Overview of Industry

      Culp markets products  worldwide to a broad array of manufacturers  that
operate in three principal markets and several specialty markets:

      Residential  furniture.  This market includes upholstered furniture sold
      to   consumers.   Products   include   sofas,   sleep   sofas,   chairs,
      motion/recliners, sectionals and occasional furniture items.

      Commercial  furniture.  This market includes  upholstered office seating
      and modular office systems sold primarily for use in offices  (including
      home offices) and other institutional settings.

      Bedding.  This market  includes  mattress  sets as well as other related
      home furnishings.

      Specialty  markets.  These markets include juvenile  furniture (baby car
      seats and other baby items),  hospitality  (furniture used in hotels and
      other  lodging  establishments),   "top  of  the  bed"  (comforters  and
      bedspreads),   outdoor   furniture,    recreational   vehicle   seating,
      automotive  aftermarket (slip-on seat covers),  retail fabric stores and
      specialty yarn.

Overview of Residential Furniture Industry

      The  upholstery  fabric  industry  is highly  competitive,  particularly
among   manufacturers   in   similar   market   niches.   American   Furniture
Manufacturers Association, a trade association,  reports that manufacturers of
residential  furniture  in  the  United  States  shipped  products  valued  at
approximately $26 billion  (wholesale) during 2000.  Approximately 42% of this
furniture  is believed to consist of  upholstered  products.  The  upholstered
furniture market has grown from $5.4 billion in 1991 to $10.9 billion in 2000.

      Trends in demand for upholstery  fabric and mattress  ticking  generally
parallel  changes in consumer  purchases  of furniture  and  bedding.  Factors
influencing  consumer  purchases  of home  furnishings  include  the number of
household  formations,  growth  in the  general  population,  the  demographic
profile of the population, consumer confidence,  employment levels, the amount
of disposable income,  geographic  mobility,  housing starts and existing home
sales.  The  long-term  trend in demand for furniture and bedding has been one
of moderate  growth,  although  there have been some  occasional  periods of a
modest downturn in sales due principally to changes in economic conditions.


      The Company  believes that  demographic  trends  support the outlook for
continued  long-term  growth in the U.S.  residential  furniture  and  bedding
industries.  In particular,  as "baby  boomers"  (people born between 1946 and
1964)  mature to the 35-to-64  year age range over the next decade,  they will
be reaching their highest  earning  power.  Consumers in these age groups tend
to  spend  more on  home  furnishings,  and the  increasing  number  of  these
individuals  favors higher demand for furniture and related home  furnishings.
Statistics  also show that the  average  size of new  homes has  increased  in
recent years, and that is believed to have resulted in increased  purchases of
furniture per home.

      There is an established trend toward  consolidation at all levels within
the home  furnishings  industry.  Furniture/Today  has  reported  that the ten
largest  residential  furniture   manufacturers   accounted  for  41%  of  the
industry's  total  shipments in 2000, up from a 23% share in 1985.  This trend
is  expected  to  continue,   particularly  because  of  the  need  to  invest
increasing   capital  to  maintain  modern   manufacturing   and  distribution
facilities as well as to provide the sophisticated  computer-based systems and
processes  necessary to interface in the supply chain  between  retailers  and
suppliers.  This  trend  toward  consolidation  is  resulting  in  fewer,  but
larger,  customers for upholstery fabric  manufacturers.  The Company believes
that this environment  favors larger upholstery fabric  manufacturers  capable
of  supplying  a broad  range of product  choices at the  volumes  required by
major furniture manufacturers on a timely basis.

      Culp's  international  sales  declined  30% in  2001 to  $77.8  million,
following an industry-wide  trend.  Although Culp's  international  sales will
continue  to be  influenced  significantly  by the  value of the  U.S.  dollar
relative to other  currencies,  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.  Production costs of fabrics
involve a relatively  low labor  component,  which provides an advantage for a
company with  modern,  efficient  manufacturing  equipment  and  systems.  The
large  size of the  furniture  market  within  the  United  States  has helped
establish an  upholstery  fabrics  industry  that  features  ready access to a
variety of raw  materials,  larger  manufacturers  with lower costs  resulting
from  economies  of scale and the  availability  of new designs and  patterns.
The Company  believes that these  characteristics  assist Culp in competing in
international markets.

Overview of Commercial Furniture Industry

      The commercial  furniture market in the United States  represents annual
shipments by  manufacturers  valued at  approximately  $13.3 billion.  Seating
and office  systems,  which  represent  the primary uses of upholstery in this
industry,  represented  annual sales of approximately  $8.1 billion  annually.
At the  manufacturing  level,  the  industry is highly  concentrated.  The top
five  manufacturers  of  commercial  furniture  account  for over 70% of total
industry shipments.  Although demand for commercial  furniture can be affected
by general economic trends,  the historical  pattern has been one of generally
steady growth.

      Dealers aligned with specific  furniture brands account for over half of
industry  shipments of commercial  furniture.  Some shift in the  distribution
of commercial  furniture has occurred in recent years in conjunction  with the
growth in national and regional chains featuring office supplies.

Overview of Bedding Industry

      According  to  data  compiled  by  the   International   Sleep  Products
Association   ("ISPA"),   the  domestic  conventional  bedding  market,  which
generated  estimated  wholesale  revenues of $4.5 billion during calendar year
2000,   includes   approximately  800  manufacturers  of  mattress  sets.  The
conventional  bedding market  accounts for  approximately  90% of the domestic
bedding market.  Approximately 71% of the conventional bedding manufactured in
the U.S. is sold to furniture  stores and specialty  sleep shops.  Most of the
remaining  29% is sold to  department  stores,  national  mass  merchandisers,
membership   clubs  and   factory   direct   stores.   Approximately   70%  of
conventional  bedding is sold for  replacement  purposes  and the average time
lapse between mattress purchases is approximately 11 years.

Products

      As described above, the Company's  products include  upholstery  fabrics
and mattress ticking.

      UPHOLSTERY  FABRICS.  The Company  derives the  majority of its revenues
from  the  sale  of  upholstery  fabrics  primarily  to  the  residential  and
commercial  (contract) furniture markets.  Sales of upholstery fabrics totaled
74% of  sales  for  fiscal  2001.  The  Company  has  emphasized  fabrics  and
patterns that have broad appeal at  promotional  to medium  prices,  generally
ranging from $2.20 per yard to $9.50 per yard.

      MATTRESS  TICKING.  The  Company  also  manufactures   mattress  ticking
(fabric  used for  covering  mattresses  and box  springs) for sale to bedding
manufacturers.  Sales of mattress  ticking  constituted 26% of sales in fiscal
2000.  The  Company  has  emphasized  fabrics  and  patterns  which have broad
appeal at prices generally ranging from $1.20 to $8.00 per yard.

      The  Company's  upholstery  fabrics  and  mattress  ticking  can each be
broadly  grouped  under  the three  main  categories  of  wovens,  prints  and
velvets.  The  following  table  indicates  the product  lines  within each of
these   categories,   a  brief  description  of  their   characteristics   and
identification of their principal end-use markets.

<PAGE>


                            Culp Fabric Categories
                            ----------------------
Upholstery Fabrics            Characteristics                  Principal Markets
------------------            ---------------                 ------------------
Wovens:
Jacquards         Elaborate, complex designs such as florals   Residential
                  and tapestries in traditional, transitional  furniture
                  and contemporary styles.  Woven on           Commercial
                  intricate looms using a wide variety of      furniture
                  synthetic and natural yarns.

Dobbies           Geometric designs such as plaids, stripes    Residential
                  and solids in traditional and country        furniture
                  styles.  Woven on less complicated looms     Commercial
                  using a variety of weaving constructions     furniture
                  and primarily synthetic yarns.

Prints:
Wet prints        Contemporary patterns with deep, rich        Residential
                  colors on a nylon flock base fabric for a    furniture
                  very soft texture and excellent              Juvenile
                  wearability.  Produced by screen printing    furniture
                  directly onto the base fabric.

Heat-transfer     Sharp, intricate designs on flock or         Residential
prints            jacquard base fabrics.  Plush feel           furniture
                  (flocks), deep colors (jacquards) and        Juvenile
                  excellent wearability.  Produced by using    furniture
                  heat and pressure to transfer color from
                  printed paper onto base fabric.

Cotton prints     A broad variety of designs featuring deep,   Residential
                  rich colors printed on woven cotton base     furniture
                  fabrics with excellent wearability.
                  Produced by screen printing directly onto
                  the base fabric.

Velvets:
Woven velvets     Basic designs such as plaids and             Residential
                  semi-plains in traditional and               furniture
                  contemporary styles with a plush feel.
                  Woven with a short-cut pile using various
                  weaving methods and synthetic yarns.

Tufted velvets    Lower cost production process of velvets in  Residential
                  which synthetic yarns are punched into a     furniture
                  base polyester fabric for texture.  Similar
                  designs as woven velvets.


Mattress Ticking                Characteristics                Principal Markets
----------------                ---------------                -----------------
Wovens:
Jacquards         Florals and other intricate  designs.  Woven Bedding
                  on  complex  looms  using a wide  variety of
                  synthetic and natural yarns.

Prints:
Heat-transfer     Sharp,  detailed designs.  Produced by using Bedding
prints            heat and  pressure  to  transfer  color from
                  printed paper onto base  fabrics,  including
                  woven   jacquards,   knits  and  poly/cotton
                  sheetings.

Pigment prints    Variety of designs produced  economically by Bedding
                  screen  printing  pigments onto a variety of
                  base fabrics,  including  jacquards,  knits,
                  poly/cotton sheeting and non-wovens.
================================================================================

      Although  fabrics  marketed for upholstery  applications  and those used
for mattress  ticking may have similar  appearances,  mattress ticking must be
manufactured on weaving and printing  equipment in wider widths to accommodate
the  physical  size of box  springs and  mattresses.  The  Company's  products
include all major types of coverings,  except for leather,  that manufacturers
use today for  furniture  and bedding.  The Company  also markets  fabrics for
certain  specialty  markets,  but these do not currently  represent a material
portion of the Company's business.

Manufacturing

      Substantially   all  of  the  upholstery  fabric  and  mattress  ticking
currently   marketed  by  Culp  is  produced  at  the  Company's  twelve  (12)
manufacturing  facilities.  These  plants  encompass  a total  of  2.2-million
square feet and  include  yarn  extrusion,  spinning,  dyeing and  texturizing
equipment,  narrow  and  wide-width  jacquard  looms,  dobby and woven  velvet
looms,  tufting machines,  printing  equipment for pigment,  heat-transfer and
wet  printing,  fabric  finishing  equipment  and  various  types  of  surface
finishing  equipment (such as washing,  softening and embossing).  The Company
maintains ISO-9002  registration at the facilities that service the commercial
market, which include its weaving plants in Graham, North Carolina,  Pageland,
South Carolina and Chattanooga,  Tennessee,  as well as its finishing plant in
Burlington, North Carolina.

      The  Company's  woven  fabrics are made from various  types of synthetic
and natural yarn, such as polypropylene,  polyester,  acrylic, rayon, nylon or
cotton.  Yarn is woven  into  various  fabrics  on  jacquard,  dobby or velvet
weaving  equipment.  Once the weaving is completed,  the fabric can be printed
or finished using a variety of processes.  The Company currently  extrudes and
spins a portion of its own needs for yarn and  purchases  the  remainder  from
outside  suppliers.  Culp  produces  internally  a  substantial  amount of its
needs for spun and  chenille  yarns.  The Company also  supplies  other fabric
manufacturers  with spun yarns  manufactured  by Culp Yarn.  Culp  purchases a
significant amount of greige goods  (unfinished,  uncolored base fabrics) from
other suppliers to be printed at the Company's  plants,  but has increased its
internal  production  capability  for  jacquard  greige  goods at  Rayonese in
Quebec, Canada.

      The Company's  flock coating line produces flock greige goods to be used
primarily  as  the  base  cloth  for  wet  and   heat-transfer-printed   flock
products.  Flock fabrics are produced by the  application  of very short nylon
fibers  onto a  poly/cotton  woven  base  fabric  to  create a velvet  effect.
During the flock coating  process,  the fibers are bonded onto the base fabric
with an adhesive  substance by utilizing an electrostatic  charging  procedure
which causes the fibers to vertically align with the base fabric.

      Tufted velvet  fabrics are produced by tufting  machines which insert an
acrylic or  polypropylene  yarn through a polyester woven base fabric creating
loop pile surface  material which is then sheared to create a velvet  surface.
Tufted  velvet  fabrics  are  typically  lower-cost  fabrics  utilized  in the
Company's lower-priced product mix.

      The Company's  printing  operations  include  pigment and  heat-transfer
methods,  as well as wet  printing.  The Company also produces its own printed
heat-transfer paper, another component of vertical integration.

Product Design and Styling

      Consumer  tastes and  preferences  related to upholstered  furniture and
bedding  change,  albeit  gradually,  over time.  The use of new  fabrics  and
designs remains an important  consideration  for  manufacturers to distinguish
their  products at retail and to capitalize on even small changes in preferred
colors,  patterns and  textures.  Culp's  success is largely  dependent on the
Company's  ability to market  fabrics  with  appealing  designs and  patterns.
Culp has a staff of over 60 designers  and support  personnel  involved in the
design and  development of new patterns and styles,  including  designers with
experience  in designing  products for specific  international  markets.  Culp
uses computer  aided design (CAD) systems in the  development  of new fabrics,
which assists the Company in providing a very flexible design  program.  These
systems have enabled the Company's  designers to experiment with new ideas and
involve  customers  more actively in the process.  The use of CAD systems also
has   supported   the   Company's   emphasis  on   integrating   manufacturing
considerations  into the early phase of a new design. The Company's  designers
are located in the Howard L. Dunn,  Jr.  design  center to support the sharing
of  design  ideas  and CAD and  other  technologies.  The  design  center  has
enhanced the Company's  merchandising  and  marketing  efforts by providing an
environment  in  which  customers  can  be  shown  new  products  as  well  as
participate in product development initiatives.

      The process of developing new designs involves  maintaining an awareness
of  broad   fashion  and  color   trends   both  in  the  United   States  and
internationally.  These  concepts  are blended  with input from the  Company's
customers  to develop new fabric  designs and  styles.  Most of these  designs
are introduced by Culp at major trade  conferences  that occur twice a year in
the  United   States   (January  and  July)  and  annually  in  several  major
international markets.

Distribution

      The majority of the  Company's  products are shipped  directly  from its
distribution centers at or near manufacturing  facilities.  This "direct ship"
program is primarily  utilized by large  manufacturers.  Generally,  small and
medium-size  residential  furniture  manufacturers  use  one of the  Company's
three  regional   distribution   facilities  which  have  been   strategically
positioned in areas which have a high  concentration of residential  furniture
manufacturers  - High Point,  North  Carolina,  Los  Angeles,  California  and
Tupelo,  Mississippi.  In  addition,  the Company  maintains  an  inventory of
upholstery  fabric at a warehouse  in Grand  Rapids,  Michigan to supply large
commercial  furniture  manufacturers  in that area on a "just in time"  basis.
The Company closely monitors demand in each  distribution  territory to decide
which  patterns and styles to hold in inventory.  These products are available
on demand by customers and are usually  shipped  within 48 hours of receipt of
an order.  Substantially  all of the Company's  shipments of mattress  ticking
are made from its manufacturing  facilities in Stokesdale,  North Carolina and
St. Jerome, Quebec, Canada.

      In  international  markets,  Culp sells primarily to  distributors  that
maintain   inventories   of   upholstery   fabrics  for  resale  to  furniture
manufacturers.

Sources and Availability of Raw Materials

      Raw  materials  account  for  more  than  half  of the  Company's  total
production  costs.  The  Company  purchases  various  types of  synthetic  and
natural yarns (polypropylene,  polyester,  acrylic,  nylon, rayon and cotton),
synthetic staple fibers (acrylic, rayon,  polypropylene,  polyester),  various
types of greige  goods  (poly/cotton  wovens  and  flocks,  polyester  wovens,
poly/rayon and  poly/cotton  jacquard  wovens,  polyester  knits,  poly/cotton
sheeting and  non-wovens),  polypropylene  resins,  nylon flock fibers,  rayon
staple, latex adhesives,  dyes and chemicals from a variety of suppliers.  The
Company  has  made  a  significant  investment  in  becoming  more  vertically
integrated  and producing  more of its jacquard  greige  goods,  polypropylene
yarns,  package dyed yarns and printed  heat-transfer  paper internally.  As a
result,  a larger  portion of its raw  materials  are  comprised of more basic
commodities  such as rayon staple,  undyed yarns,  polypropylene  resin chips,
certain  polyester  warp yarns,  unprinted  heat-transfer  paper and unflocked
poly/cotton  base fabric.  Although the Company is dependent upon one supplier
for all of its nylon flock  fibers and upon one  supplier  of acrylic  staple,
most of the Company's  raw materials are available  from more than one primary
source. The prices of such materials  fluctuate  depending upon current supply
and  demand  conditions  and  the  general  rate  of  inflation.  Many  of the
Company's basic raw materials are petrochemical  products or are produced from
such   products,   and  therefore   the  Company's  raw  material   costs  are
particularly  sensitive to changes in  petrochemical  prices.  Generally,  the
Company has not had significant difficulty in obtaining raw materials.


Competition

      In spite of the trend  toward  consolidation  in the  upholstery  fabric
market,  the Company  competes  against a large number of  producers,  ranging
from large manufacturers  comparable in size to the Company to small producers
and  marketers  of  specialty  fabrics.  The Company  believes  its  principal
upholstery  fabric  competitors are the Burlington  House Fabrics  division of
Burlington   Industries,   Inc.,  Joan  Fabrics  Corporation   (including  its
Mastercraft division), Microfibres, Inc., and Quaker Fabric Corporation.

      Conversely,  the  mattress  ticking  market  is  concentrated  in a  few
relatively  large  suppliers.  The Company  believes  its  principal  mattress
ticking  competitors are Bekaert Textiles B.V.,  Blumenthal Print Works, Inc.,
the  Burlington  House  Fabrics  division of Burlington  Industries,  Inc. and
Tietex,  Inc.  Although  the  Company  is  one  of the  largest  suppliers  of
furniture  upholstery  fabrics and a leading  supplier of mattress  ticking to
the bedding  industry,  some of the Company's  competitors  are larger overall
and have greater  financial  resources than the Company.  Competition  for the
Company's  products is based primarily on price,  design,  quality,  timing of
delivery and service.

Technology

      Culp  views the  proper  use of  technology  as an  integral  part of an
effective  and  responsive  business.  The Company  continues  to evaluate and
employ  technology  that will help to  achieve  higher  levels of  service  to
customers  and bring  operating  efficiencies  to the  manufacturing  process.
Some key initiatives include:

-     Use of the  Internet has  continued to be an important  component of our
      work.   CulpLink  provides  real-time   information  for  the  Company's
      customers  including order status,  shipping and invoice  documentation,
      sales history, and inventory  availability.  Additionally,  CulpLink has
      been expanded to satisfy some key business to business  strategies  with
      the Company's customers.

-     Our  Intranet  initiative,   named  CulpNet,  was  deployed  to  improve
      efficiency  within the  company and reduce  paper.  Forms,  charts,  and
      other internal  reporting have been converted to CulpNet to achieve cost
      savings and improve communications.

-     Culp has continued to invest in  technology  to aid the design  process.
      CAD,  digital  imaging,  and  electronic  interfaces  to the  production
      equipment  have allowed  significant  savings in terms of speed and ease
      of development.

-     Culp  continues  to expand  shop floor  systems in the use of  scanners,
      radio  frequency   devices,   bar-coding,   and  process   documentation
      throughout  the  Company's   manufacturing  and  distribution   systems.
      Inventories and manufacturing  processes are tracked by these systems to
      provide  customer  service  and  operational  management  with real time
      information   for  better   customer   service  and  a  more   efficient
      operation.  All of these systems operate on redundant  computer hardware
      and fiber  optic  backbones  to  effectively  minimize  downtime  to the
      Company's production processes.

<PAGE>

Environmental and Other Regulations

      The   Company  is  subject  to  various   federal  and  state  laws  and
regulations,  including the Occupational Safety and Health Act and federal and
state  environmental  laws,  as well as similar  laws  governing  its Rayonese
facility in Canada.  The Company  periodically  reviews  its  compliance  with
such laws and regulations in an attempt to minimize the risk of violations.

      The  Company's  operations  involve a variety of materials and processes
that  are   subject  to   environmental   regulation.   Under   current   law,
environmental liability can  arise from  previously owned  properties,  leased
properties and properties owned by third parties,  as well as  from properties
currently  owned and leased by the Company. Environmental liabilities can also
be  asserted  by  adjacent  landowners  or  other  third parties in toxic tort
litigation.

      In   addition,   under   the   Comprehensive   Environmental   Response,
Compensation,  and Liability Act of 1980, as amended ("CERCLA"), and analogous
state  statutes,  liability  can be imposed for the disposal of waste at sites
targeted for cleanup by federal and state  regulatory  authorities.  Liability
under CERCLA is strict as well as joint and several.

      The Company has accrued  reserves  for  environmental  matters  based on
information  presently available.  Based on this information and the Company's
established reserves,  the Company does not believe that environmental matters
will  have a  material  adverse  effect  on  either  the  Company's  financial
condition or results of  operations.  However,  there can be no assurance that
the costs  associated  with  environmental  matters  will not  increase in the
future.

Employees

      As of April 29, 2001,  the Company had  approximately  3,100  employees,
compared to  approximately  3,800 at the end of fiscal 2000. All of the hourly
employees  at  the  Rayonese  facility  in  Canada  (approximately  7% of  the
Company's  workforce) are  represented by a union.  The collective  bargaining
agreement with respect to the Rayonese  hourly  employees  expires in February
2002.  The  Company is not aware of any  efforts to  organize  any more of its
employees and believes its relations with its employees are good.

Customers and Sales

      Culp's  size,  broad  product  line,  diverse   manufacturing  base  and
effective  distribution  system  enable it to market  products  to over  2,000
customers.   Major   customers  are  leading   manufacturers   of  upholstered
furniture,   including  Bassett,  Furniture  Brands  International  (Broyhill,
Thomasville  and  Action),  Lifestyles  International  (Berkline,  Benchcraft,
Drexel,    Henredon   and   others),    Flexsteel   and   La-Z-Boy   (Bauhaus,
England/Corsair,  LADD  Furniture  and others).  Representative  customers for
the Company's  fabrics for commercial  furniture  include  Herman Miller,  HON
Industries and Steelcase.  In the mattress ticking area,  Culp's customer base
includes  leading  bedding  manufacturers  such as Sealy,  Serta,  Simmons and
Spring  Air.  Culp's   customers  also  include  many  small  and  medium-size
furniture and bedding  manufacturers.  In  international  markets,  Culp sells
upholstery  fabrics  primarily to distributors  that maintain  inventories for
resale to furniture manufacturers.


      The  following  table sets forth the  Company's  net sales by geographic
area by amount and  percentage  of total net sales for the three  most  recent
fiscal years.

                         Net Sales by Geographic Area
                         ----------------------------
                            (dollars in thousands)
                      Fiscal 2001          Fiscal 2000          Fiscal 1999
                      -----------          -----------          -----------

United States       $331,986   81.0%     $376,975   77.2%      $369,730   76.5%
North America
(excluding U.S.)      34,049    8.3        36,032    7.4         31,102    6.5
Europe                 6,262    1.5        16,351    3.4         19,578    4.1
Middle East           17,831    4.4        32,929    6.7         33,996    7.0
Asia and Pacific Rim  15,497    3.8        19,102    3.9         21,371    4.4
South America          1,028    0.2         2,343    0.5          3,484    0.7
All other areas        3,157    0.8         4,347    0.9          3,823    0.8
                    ---------  ----      --------  -----       --------  -----
Subtotal
(International)       77,824   19.0       111,104   22.8        113,354   23.5
                    ---------  ----      --------  -----       --------  -----

Total               $409,810  100.0%     $488,079  100.0%      $483,084  100.0%
                    ========= ======     ========  ======      ========  ======


Backlog

      Because a large portion of the Company's  customers  have an opportunity
to cancel  orders,  it is  difficult to predict the amount of the backlog that
is "firm."  Many  customers  may cancel  orders  before  goods are placed into
production,  and some may cancel at a later  time.  In  addition,  the Company
markets a  significant  portion of its sales  through its  regional  warehouse
system from in-stock  order  positions.  On April 29, 2001, the portion of the
backlog  with  confirmed  shipping  dates  prior  to June 3,  2001  was  $32.3
million,  and on April 30,  2000,  the portion of the backlog  with  confirmed
shipping dates prior to June 4, 2000 was $39.1 million.

<PAGE>
                              ITEM 2. PROPERTIES


      The Company's  headquarters  are located in High Point,  North Carolina,
and the Company currently  operates twelve (12)  manufacturing  facilities and
three (3) regional distribution facilities.  The following is a summary of the
Company's   principal    administrative,    manufacturing   and   distribution
facilities. The manufacturing facilities are organized by segment.

                                                         Approx.
                                                        Total Area  Expiration
Location                        Principal Use           (Sq. Ft.)   of Lease (2)
--------                        -------------           ----------  ------------

- Headquarters and Distribution
  Centers:  (1)
   High Point, North Carolina   Corporate headquarters    40,000        2015
   Burlington, North Carolina   Design Center             30,000       Owned
   Los Angeles, California      Regional distribution     33,000        2007

- Upholstery Fabrics:
   Graham, North Carolina       Manufacturing            341,000       Owned
   Burlington, North Carolina   Manufacturing and
                                distribution             302,000       Owned
   Pageland, South Carolina     Manufacturing             96,000       Owned
   Burlington, North Carolina   Distribution and Yarn
                                Warehouse                112,500       Owned
   Chattanooga, Tennessee       Manufacturing and
                                distribution             290,000        2018
   Burlington, North Carolina   Manufacturing and
                                distribution             275,000        2021
   Lumberton, North Carolina    Manufacturing            107,000       Owned
   Anderson, South Carolina     Manufacturing             99,000       Owned
   High Point, North Carolina   Regional distribution     65,000        2008
   Tupelo, Mississippi          Regional distribution     57,000        2018
   Shelby, North Carolina       Manufacturing            101,000       Owned
   Lincolnton, North Carolina   Manufacturing             78,000       Owned
   Cherryville, North Carolina  Manufacturing            135,000       Owned

- Mattress Ticking:
   Stokesdale, North Carolina   Manufacturing and
                                distribution             220,000       Owned
   St. Jerome, Quebec, Canada   Manufacturing and
                                distribution             202,000       Owned


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

(1)    Properties are used jointly by Upholstery Fabrics and Mattress Ticking

(2)    Includes all options to renew

<PAGE>

                          ITEM 3. LEGAL PROCEEDINGS

            There  are no legal  proceedings  to  which  the  Company,  or its
subsidiaries,  is a party or of which  any of their  property  is the  subject
that are required to be disclosed under this item.


                      ITEM 4.  SUBMISSION OF MATTERS TO A
                           VOTE OF SECURITY HOLDERS

            There were no matters  submitted to a vote of shareholders  during
the fourth quarter ended April 29, 2001.

                                    PART II

                 ITEM 5.   MARKET FOR THE REGISTRANT'S COMMON
                     STOCK AND RELATED STOCKHOLDER MATTERS

      Registrar and Transfer Agent
      EquiServe Trust Company, N.A.
      c/o EquiServe
      Post Office Box 43012
      Providence, Rhode Island  02940-3012
      (800) 633-4236
      www.equiserve.com

      Stock Listing
      Culp,  Inc.  common stock is traded on the New York Stock Exchange under
the symbol CFI. As of April 29,  2001,  Culp,  Inc.  had  approximately  2,400
shareholders  based on the  number of holders  of record  and an  estimate  of
individual participants represented by security position listings.

      Analyst Coverage
      These analysts cover Culp, Inc.:

      BB&T Capital Markets - Joel Havard
      First Union Capital Markets - John Baugh, CFA
      C.L. King & Associates - Tom Lewis
      Raymond, James & Associates - Budd Bugatch, CFA
      Wachovia Securities, Inc. - Kay Norwood, CFA

      See  Item  6,  Selected   Financial   Data,   for  market  and  dividend
information regarding the Company's common stock.

<PAGE>


ITEM 6.  SELECTED FINANCIAL DATA (SELECTED ANNUAL DATA)
<TABLE>
<CAPTION>
                                                                                                           percent  five-year
                                                                                                           change     growth
                                                fiscal       fiscal      fiscal      fiscal       fiscal  2001/2000     rate
(amounts in thousands, except per share amounts) 2001         2000        1999        1998         1997        (6)      (6)
---------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT DATA (5)
<S>                                        <C>            <C>         <C>         <C>          <C>         <C>       <C>
   net sales                               $  409,810      488,079     483,084     476,715      398,879     (16.0)%    3.1%
   cost of sales                              353,823      403,414     406,976     393,154      326,394     (12.3)     4.1
---------------------------------------------------------------------------------------------------------------------------
     gross profit                              55,987       84,665      76,108      83,561       72,485     (33.9)    (2.2)
   S G & A expenses                            50,366       59,935      59,968      52,987       45,058     (16.0)     5.2
   restructuring expense                        5,625            0           0           0            0     100.0    100.0
---------------------------------------------------------------------------------------------------------------------------
     income (loss) from operations                 (4)      24,730      16,140      30,574       27,427       N.M      N.M
   interest expense                             9,114        9,521       9,615       7,117        4,671      (4.3)    11.4
   interest income                                (46)         (51)       (195)       (304)        (280)     (9.8)   (12.9)
   other expense                                3,336        1,566       1,864       1,358        1,521     113.0     28.4
---------------------------------------------------------------------------------------------------------------------------
     income (loss) before income taxes        (12,408)      13,694       4,856      22,403       21,515       N.M      N.M
   income taxes                                (4,097)       4,314       1,206       6,336        7,745       N.M      N.M
---------------------------------------------------------------------------------------------------------------------------
     net income (loss)                         (8,311)       9,380       3,650      16,067       13,770       N.M      N.M
---------------------------------------------------------------------------------------------------------------------------
   EBITDA (3)                              $   18,002       44,472      34,645      45,645       39,404     (59.5)   (12.8)
   depreciation                                19,391       19,462      18,549      14,808       12,688      (0.4)     9.4
   cash dividends                               1,177        1,611       1,788       1,786        1,513     (26.9)    (1.0)
---------------------------------------------------------------------------------------------------------------------------
   weighted average shares outstanding         11,210       11,580      12,909      12,744       11,624      (3.2)     0.0
   weighted average shares outstanding,
     assuming dilution                         11,210       11,681      13,064      13,042       11,929      (4.0)    (1.2)
---------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA (5)
   net income (loss)                       $    (0.74)        0.81        0.28        1.26         1.18       N.M%     N.M%
   net income (loss), assuming dilution         (0.74)        0.80        0.28        1.23         1.15       N.M      N.M
   cash dividends                               0.105         0.14        0.14        0.14         0.13     (25.0)    (0.9)
   book value                                   10.85        11.57       10.63       10.15         8.79      (6.2)     8.5
---------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET DATA (5)
   working capital                         $   78,629       99,977      99,324     102,730       69,777     (21.4)%    6.7%
   property, plant and equipment, net         112,322      126,407     123,310     128,805       91,231     (11.1)     7.9
   total assets                               289,580      343,980     331,714     355,369      243,952     (15.8)     6.5
   capital expenditures                         8,050       22,559      10,689      35,879       26,958     (64.3)   (11.0)
   long-term debt                             109,168      135,808     140,312     152,312       76,541     (19.6)     7.8
   funded debt (1)                            111,656      137,486     138,650     151,616       65,623     (18.8)     7.8
   shareholders' equity                       121,802      129,640     128,428     132,073      110,789      (6.0)     8.4
   capital employed (4)                       233,458      267,126     267,078     283,689      176,412     (12.6)     8.1
---------------------------------------------------------------------------------------------------------------------------
RATIOS & OTHER DATA (5)
   gross profit margin                           13.7%        17.3%       15.8%       17.5%        18.2%
   operating income (loss) margin                (0.0)         5.1         3.3         6.4          6.9
   net income (loss) margin                      (2.0)         1.9         0.8         3.4          3.5
   EBITDA margin                                  4.4          9.1         7.2         9.6          9.9
   effective income tax rate                     33.0         31.5        24.8        28.3         36.0
   funded debt-to-total capital ratio (1)        47.8         51.5        51.9        53.4         37.2
   return on average total capital               (0.9)         6.0         3.6         8.6         10.1
   return on average equity                      (6.6)         7.3         2.8        13.5         15.2
   working capital turnover                       4.0          4.4         4.3         4.7          5.3
   days sales in receivables                       50           49          49          49           49
   inventory turnover                             5.1          5.4         5.6         5.8          6.4
---------------------------------------------------------------------------------------------------------
STOCK DATA
   stock price
     high                                  $     7.25        11.06       19.13       22.19        19.63
     low                                         1.63         5.00        5.13       16.50        11.50
     close                                       4.95         5.81        8.25       18.88        16.63
   P/E ratio (2)
     high (6)                                     N.M         13.7        67.6        17.6         16.6
     low (6)                                      N.M          6.2        18.1        13.1          9.7
   daily average trading volume (shares)         16.2         15.8        30.4        16.0         19.7
---------------------------------------------------------------------------------------------------------
(1)   Funded debt includes long- and short-term debt, less restricted investments.
(2)   P/E ratios based on trailing 12-month net income (loss) per share.
(3)   EBITDA represents earnings before interest, income taxes, depreciation and amortization.
(4)   Capital employed includes funded debt and shareholders' equity.
(5)   Phillips, Wetumpka and Artee included in consolidated results from their fiscal 1998 acquisitions by Culp.
(6)   N.M - Not meaningful

</TABLE>



               ITEM 7.   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 thereto.

Overview
      Culp  is  one of the  largest  integrated  marketers  in the  world  for
upholstery  fabrics for furniture and is one of the leading  global  producers
of mattress  fabrics  (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.
      The company's  operating  segments are  upholstery  fabrics and mattress
ticking,   with  related  divisions   organized  within  those  segments.   In
upholstery  fabrics,  Culp Decorative Fabrics markets jacquard and dobby woven
fabrics  for  residential  and  commercial   furniture.   Culp  Velvets/Prints
markets a broad  range of  printed  and  velvet  fabrics  used  primarily  for
residential and juvenile furniture.  Culp Yarn manufactures  specialty filling
yarn that is primarily used by Culp. In mattress  ticking,  Culp Home Fashions
markets a broad array of fabrics used by bedding manufacturers.

Results of Operations
      The   following   table  sets  forth  certain  items  in  the  company's
consolidated statements of income (loss) as a percentage of net sales.

                                              2001     2000     1999
                                             ------   ------   ------
Net sales                                    100.0%   100.0%   100.0%
Cost of sales                                 86.3     82.7     84.2
                                             ------   ------   ------
     Gross profit                             13.7     17.3     15.8
Selling, general and administrative
  expenses                                    12.3     12.3     12.4
Restructuring expense                          1.4      0.0      0.0
                                             ------   ------   ------
     Income (loss) from operations            (0.0)     5.1      3.3
Interest expense                               2.2      2.0      2.0
Interest income                               (0.0)    (0.0)    (0.0)
Other expense                                  0.8      0.3      0.4
                                             ------   ------   ------
     Income (loss) before income taxes        (3.0)     2.8      1.0
     Income taxes *                           33.0     31.5     24.8
     Net income (loss)                        (2.0)%    1.9%     0.8%
                                              ======  ======   ======

*  Calculated as a percent of income (loss) before income taxes.


      The  following  table sets  forth the  company's  sales by  segment  and
division for each of the  company's  three most recent  years.  The table sets
forth the change in net sales for the segments  and  divisions as a percentage
for comparative periods included in the table.

(dollars in thousands)              Amounts                      Percent change
--------------------------------------------------------------------------------
                                                                 2000-   1999-
segment/division             2001      2000      1999            2001    2000
--------------------------------------------------------------------------------
Upholstery Fabrics:
  Culp Decorative Fabrics  $170,326  $213,197  $222,058         (20.1)%  (4.0)%
  Culp Velvets/Prints       122,105   151,543   144,073         (19.4)    5.2
  Culp Yarn                  12,581    17,570    21,513         (28.4)  (18.3)
                           --------  --------  --------         ------- -------
                            305,012   382,310   387,644         (20.2)   (1.4)
Mattress Ticking:
  Culp Home Fashions        104,798   105,769    95,440          (0.9)   10.8
                           --------  --------  --------         ------- -------
                           $409,810  $488,079  $483,084         (16.0)%   1.0%
                           --------  --------  --------         ------- -------
Restructuring Actions

      During  2001 the  company  initiated a  restructuring  plan  intended to
lower  costs,   increase  efficiency  and  position  the  company  to  operate
profitably  within  the  current  environment  of  reduced  demand.  The  plan
involves the consolidation of certain manufacturing  capacity,  the closure of
some   facilities  and  an  extensive   reduction  in  selling,   general  and
administrative   expenses.  The  company  also  recognized  certain  inventory
write-downs   as  part  of  this   initiative.   The  total  charge  from  the
restructuring,   cost  reduction  and  inventory  write-down   initiatives  is
expected  to total  $8.5  million,  about  $3.4  million  of which  represents
non-cash  items.  The company  recognized  $7.4 million of  restructuring  and
related  charges  during  2001 and  expects  to record the  remaining  charges
related to  restructuring  during the first half of 2002. The company  expects
to realize  annualized  cost  reductions  of at least $12  million  when these
steps  are  fully  implemented.  See  Note  2 to  the  consolidated  financial
statements.

2001 Compared with 2000

      Net Sales.  Net sales for 2001  decreased  by $78.3  million,  or 16.0%,
compared  with 2000.  The  company's  sales of  upholstery  fabrics  decreased
20.2% to $305.0  million and mattress  ticking sales  decreased 0.9% to $104.8
million.  Key factors influencing the year-to-year  comparison were the sharp,
persistent  weakness in consumer spending on home  furnishings,  especially in
promotional price categories,  and the strength in the U.S. dollar that had an
adverse  impact on  exports.  Culp's  international  sales  declined  30.0% in
2001,  following an industry-wide  trend.  Although Culp's international sales
will continue to be influenced  significantly  by the value of the U.S. dollar
relative to other  currencies,  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.

      After a  number  of  years  of  increasing  sales,  Culp  Home  Fashions
(primarily  mattress  ticking)  during  2001  recorded  a decline  in sales of
0.9%.  The company  believes that this decline was less than that  experienced
for the  industry as a whole,  which was  affected by the slowdown in consumer
spending.

      Since the close of fiscal 2001,  the company has continued to experience
weakness in U.S. and  international  demand.  Looking  forward to fiscal 2002,
the company  recognizes  that  persistent weak demand will continue to present
challenges,   but   management   is  hopeful  that  reduced   costs  from  its
restructuring plan will enable it to report a profit for 2002 as a whole.

      Gross Profit and Cost of Sales.  Gross profit  declined 33.9% for fiscal
2001 and  decreased  as a  percentage  of net sales from  17.3% to 13.7%.  The
decline  was due  principally  to lower sales  volume that led to  unfavorable
cost variances in the company's  upholstery fabrics operation.  The company is
taking  steps  to lower  expenses  by  consolidating  certain  operations  and
reducing  personnel,  but does not expect to realize the full benefit of these
actions until the second half of 2002.

      Selling,  General  and  Administrative  Expenses.  Selling,  general and
administrative  expenses  for 2001  decreased  16.0%  from the prior  year and
accounted  for 12.3% of sales for 2001 and 2000.  Reflecting  the  momentum of
the company's actions to reduce expenses,  selling, general and administrative
expenses for the fourth quarter  declined 28.8% from the  year-earlier  period
and, as a percentage of sales, declined from 11.5% to 10.5%.

      Interest  Expense.  Net  interest  expense for 2001  declined  from $9.5
million to $9.1 million due to lower average  borrowings,  partially offset by
higher interest rates.

      Other  Expense.  Other  expense for 2001 totaled  $3.3 million  compared
with $1.6  million in the prior year.  The  increase  was  principally  due to
lower  investment  income  on assets  related  to the  company's  nonqualified
deferred compensation plan,  mark-to-market losses on foreign currency forward
contracts for anticipated  purchases in the Euro and mark-to-market  losses on
interest  rate swaps that no longer  serve as a hedge due to the  repayment of
debt.

        Income Taxes.  The effective tax rate for 2001 was 33.0% compared with
31.5% in the prior year.  The lower  rates for 2001 and 2000 as compared  with
the federal  statutory rate of 35% are due principally to tax benefits related
to the company's  international  sales and to a higher  proportion of earnings
from the  company's  Canadian  subsidiary  that is taxed at a lower  effective
rate.   The  company   expects  the   effective   tax  rate  for  2001  to  be
approximately 34%.

      Net  Income  (Loss)  Per  Share.  Diluted  net loss per  share  for 2001
totaled $0.74 compared with net income for 2000 of $0.80.

2000 Compared with 1999

      Net  Sales.  Net  sales for 2000  increased  by $5.0  million,  or 1.0%,
compared with 1999. The company's sales of upholstery  fabrics  decreased 1.4%
to  $382.3  million  and  mattress  ticking  sales  increased  10.8% to $105.8
million.  This was the first full year in which the company  operated with its
current  structure  of four  divisions.  This  corporate  organization,  which
evolved  from one in which  there  were six  business  units,  groups  related
operations  together;  and its  adoption  in 1999 was  accompanied  by several
changes  in  managerial   positions.   The  company  believes  that  this  new
structure  is  yielding  a number  of  benefits  including  improved  customer
service,  more effective use of design  resources and increased  manufacturing
efficiency.  Culp  believes  that these  factors  aided its total net sales to
U.S.-based accounts for 2000, which rose 2.0% for the year.

      This  growth  was offset by a decline  of 2.0% in  international  sales.
After  several  years of  above-average  growth,  Culp's  international  sales
declined 17.4% in 1999,  following an  industry-wide  trend.  The company took
steps  to  mitigate  the  impact  of this  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 appeared more  favorable.  The company
believes that the  significantly  smaller decline in  international  sales for
2000 reflects the results of these actions.

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

      Gross Profit and Cost of Sales.  Gross profit for 2000  increased  11.2%
to $84.7  million and  increased  as a  percentage  of net sales from 15.8% to
17.3%.  The company has taken a number of actions to  increase  gross  profit,
including a shift of its production  capacity  toward more  profitable  fabric
categories  and  substantial  steps to  reduce  operating  expenses  and raise
productivity.

      Selling,  General  and  Administrative  Expenses.  Selling,  general and
administrative  expenses for 2000  decreased  0.1% and  accounted for 12.3% of
sales  versus  12.4%  in  the  prior  year.  The  company  has  increased  its
resources for the design of new fabrics and for enhanced information systems.

      Interest  Expense.  Net  interest  expense  of  $9.5  million  for  2000
compared with $9.4 million in the prior year.  Although the company  generally
had lower  average  borrowings  during  2000,  the reduced  debt was offset by
lower capitalized  interest related to capital expenditures and higher average
interest rates.

      Other  Expense.  Other  expense for 2000 totaled  $1.6 million  compared
with $1.9  million in the prior  year.  The  decrease  is  principally  due to
lower losses on disposal of fixed assets.

        Income Taxes.  The effective tax rate for 2000 was 31.5% compared with
24.8% in the prior year.  The lower  rates for 2000 and 1999 as compared  with
the federal  statutory rate of 35% are due principally to tax benefits related
to the  company's  international  sales,  non-taxable  gains  related  to life
insurance  contracts and to a higher proportion of earnings from the company's
Canadian subsidiary that is taxed at a lower effective rate.

      Net  Income  Per Share.  Diluted  net income per share for 2000  totaled
$0.80 compared with $0.28 in fiscal 1999.

Liquidity and Capital Resources

      Liquidity.  Cash and cash  investments were $1.2 million as of April 29,
2001  compared  with $1.0 million at the end of 2000.  Funded debt  (long-term
debt,  including current  maturities)  amounted to $111.7 million at the close
of 2001 versus  $137.5  million at the end of 2000.  As a percentage  of total
capital  (funded  debt  plus  total  shareholders'   equity),   the  company's
borrowings  amounted to 47.8% as of April 29, 2001  compared with 51.5% at the
end of 2000.  The  company's  working  capital as of April 29,  2001 was $78.6
million compared with $100.0 million at the close of 2000.

      The  company's  cash flow from  operations  was $36.1  million for 2001,
consisting  of $13.3  million  from  operations  (net loss plus  depreciation,
amortization,  deferred  income taxes and  restructuring  expense)  plus $22.8
million from changes in working capital.

      In separate  authorizations in June 1998, March 1999, September 1999 and
December 1999,  the board of directors of the company  authorized the use of a
total of $20.0 million to repurchase the company's  common stock.  During 2000
and 1999,  the company  invested  $12.2  million to  repurchase a total of 1.8
million   shares.   There  were  no   purchases   during   2001  under   these
authorizations,  and the company is currently  restricted  from any additional
stock repurchases under the terms of its bank credit facility.

      Financing  Arrangements.  Culp has $75 million of senior unsecured notes
with a fixed  coupon  rate of 6.76%  and an  average  remaining  term of seven
years. In addition,  the company has a $25 million syndicated,  mulit-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.  In January  2001,  the  company  amended the credit
facility to amend certain  covenants.  Additionally,  the amendment  increased
the  interest  rate from  LIBOR  plus  1.10% to 1.60% to LIBOR  plus  2.50% to
4.25%.  The  interest  rate  matrix is based on the  company's  debt to EBITDA
ratio, as defined by the facility,  such that a lower ratio allows for a lower
interest  rate.  The amended  facility also limits  capital  expenditures  and
restricts  dividends and common stock  repurchases.  As of April 29, 2001, the
company had outstanding  balances of approximately $1 million under the credit
facility.  See Note 10 to the company's consolidated financial statements.

      The company also has a total of $33.0  million in currently  outstanding
industrial  revenue  bonds  ("IRBs")  which have been used to finance  capital
expenditures.  The IRBs  bear  interest  at  variable  rates  with a  weighted
average of 8.93%,  including  the letter of credit  fee  percentage.  The IRBs
are  collateralized  by letters of credit for the  outstanding  balance of the
IRBs  and  certain  interest   payments  due  thereunder.   The  January  2001
amendment to the credit  facility also  increased the letter of credit fees to
a range from 2.50% to 4.25%, based on the company's debt to EBITDA ratio.

      The company's  loan  agreements  require,  among other things,  that the
company maintain  compliance with certain  financial  ratios.  As of April 29,
2001, the company was in compliance with these amended financial covenants.

      As of April 29, 2001, the company had two interest rate swap  agreements
with a $10 million  notional  amount.  During  2001,  the  company  recorded a
mark-to-market  loss of $219,000  because the interest rate swap agreements no
longer  serve as a hedge  due to the  repayment  of  debt.  The  company  also
enters into foreign  exchange  forward and option  contracts to hedge  against
currency  fluctuations  with  respect  to  firm  commitments  and  anticipated
transactions to purchase certain machinery, equipment and raw materials.

      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,  primarily  for  modernization,
totaled  $8.1  million for 2001  compared  with $22.6  million  for 2000.  The
company anticipates capital spending of approximately $4 million in 2002.

      The  company   believes  that  cash  flows  from  operations  and  funds
available  under its credit  facilities will be sufficient for the foreseeable
future to meet its needs for normal  working  capital and capital  spending as
permitted under the terms of the company's loan agreements.

Inflation

      The cost of certain of the company's raw materials,  principally  fibers
from petroleum derivatives,  and utility/energy costs have increased somewhat;
but overall operating  expenses are remaining  generally stable.  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.

New Accounting Pronouncements

      Effective April 30, 2001, the company adopted SFAS No. 133,  "Accounting
for  Derivative   Instruments  and  Hedging  Activities,"  as  amended,  which
establishes  accounting and reporting standards for derivative instruments and
hedging  activities.  SFAS No.  133  requires  that an  entity  recognize  all
derivatives as either assets or liabilities in the consolidated  balance sheet
and measure those  instruments  at fair value.  The adoption of this statement
will not have a  material  effect  on the  Company's  financial  condition  or
results of operations.  However,  its  application may increase the volatility
of other  expense in the  consolidated  statements  of income (loss) and other
comprehensive  income (loss) in the  consolidated  statements of shareholders'
equity.

Forward-Looking Information

      The company's  annual report on Form 10-K contains  statements  that may
be deemed  "forward-looking  statements"  within the  meaning  of the  federal
securities laws,  including the Private  Securities  Litigation  Reform Act of
1995.  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  international  areas could affect the
demand for the company's products.

<PAGE>

              ITEM 7A.   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.   See  additional
disclosures   about  interest  rate  swap   agreements  in  the   Management's
Discussion  and Analysis of Financial  Condition  and Results of Operations in
item 7 above. 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 April 29, 2001.

            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  industrial  revenue  bonds.  To lower  or limit  overall
borrowing  costs,  the Company  entered 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 monthly  basis,  the  amounts,  if any,  by which  the  Company's
interest  payments  covered  by  swap  agreements  differ  from  those  of the
counterparty.   These  amounts  were  recorded  as   adjustments  to  interest
expense.  As of April 29,  2001,  the fair  value of the swap  agreements  and
changes in fair value  resulting  from  changes in market  interest  rates are
recognized in the consolidated  financial statements because the interest rate
swaps no longer  serve as a hedge due to the  repayment  of debt.  The  annual
impact on the Company's  results of  operations of a 100 basis point  interest
rate change on the April 29, 2001  outstanding  balance of the  variable  rate
debt would be approximately $320,000 irrespective of any interest rate swaps.

            The  Company's   exposure  to  fluctuations  in  foreign  currency
exchange  rates is due primarily to a foreign  subsidiary  domiciled in Canada
and  firmly  committed  and  anticipated   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  firmly  committed  and  anticipated   purchases  of  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 April 29, 2001 would not have
a  significant  impact on the  Company's  results of  operations  or financial
position.  Additionally,  as the Company utilizes foreign currency instruments
for hedging  anticipated  and firmly  committed  transactions,  a loss in fair
value for those  instruments is generally  offset by increases in the value of
the  underlying  exposure.  During  2001,  mark-to-market  losses  on  foreign
currency  forward  contracts  for  anticipated  purchases  in the Euro totaled
$643,000,  which  was  included  in  other  expense.  Other  foreign  currency
fluctuations  did not have a  material  impact  on the  Company's  results  of
operations and financial position during fiscal years 2001, 2000 and 1999.

<PAGE>

                  ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS
                            AND SUPPLEMENTARY DATA

Management's Statement of Responsibility

The management of Culp,  Inc. is responsible  for the accuracy and consistency
of all  the  information  contained  in  this  annual  report  on  Form  10-K,
including the financial  statements.  These  statements  have been prepared to
conform with accounting  principles generally accepted in the United States of
America.  The  preparation  of financial  statements and related data involves
estimates and the use of judgment.

Culp,  Inc.  maintains  internal   accounting  controls  designed  to  provide
reasonable assurance that the financial records are accurate,  that the assets
of the company are  safeguarded,  and that the  financial  statements  present
fairly the financial position and results of operations of the Company.

KPMG LLP, the Company's independent auditors,  conducts an audit in accordance
with  auditing  standards  generally  accepted in the United States of America
and provides an opinion on the financial  statements  prepared by  management.
Their report for 2001 is presented below.

The Audit  Committee of the Board of Directors  reviews the scope of the audit
and the findings of the  independent  auditors.  The internal  auditor and the
independent  auditors  meet  with the Audit  Committee  to  discuss  audit and
financial  reporting  issues.  The Audit  Committee also reviews the company's
principal accounting policies,  significant internal accounting controls,  the
Annual Report and annual SEC filings (Form 10-K and Proxy Statement).



          Robert G. Culp, III                       Franklin N. Saxon
          Chairman and Chief Executive Officer      Executive Vice President and
          May 31, 2001                              Chief Financial Officer
                                                    May 31, 2001
<PAGE>

REPORT OF INDEPENDENT AUDITORS


To the Board of Directors and Shareholders of Culp, Inc.:

We have audited the accompanying consolidated balance sheets of Culp, Inc.
and subsidiary as of April 29, 2001 and April 30, 2000, and the related
consolidated statements of income (loss), shareholders' equity, and cash
flows for each of the years in the three-year period ended April 29, 2001.
These consolidated financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Culp,
Inc. and subsidiary as of April 29, 2001 and April 30, 2000, and the results
of their operations and their cash flows for each of the years in the
three-year period ended April 29, 2001, in conformity with accounting
principles generally accepted in the United States of America.



KPMG LLP
Greensboro, North Carolina
May 31, 2001


<PAGE>

CONSOLIDATED BALANCE SHEETS



April 29, 2001 and April 30, 2000 (dollars in thousands, except share data)
                                                               2001      2000
------------------------------------------------------------------------------
ASSETS
   current assets:
      cash and cash investments                             $  1,207     1,007
      accounts receivable                                     57,849    75,223
      inventories                                             59,997    74,471
      other current assets                                     7,856    10,349
------------------------------------------------------------------------------
         total current assets                                126,909   161,050

   property, plant and equipment, net                        112,322   126,407
   goodwill                                                   48,478    49,873
   other assets                                                1,871     6,650
------------------------------------------------------------------------------
         total assets                                       $289,580   343,980
------------------------------------------------------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
   current liabilities:
      current maturities of long-term debt                  $  2,488     1,678
      accounts payable                                        27,371    37,287
      accrued expenses                                        17,153    22,108
      income taxes payable                                     1,268         0
------------------------------------------------------------------------------
         total current liabilities                            48,280    61,073

   long-term debt                                            109,168   135,808
   deferred income taxes                                      10,330    17,459
------------------------------------------------------------------------------
         total liabilities                                   167,778   214,340
------------------------------------------------------------------------------

   commitments and contingencies (notes 10 and 11)
   shareholders' equity:
      preferred stock, $.05 par value, authorized 10,000,000
         shares                                                    0         0
      common stock, $.05 par value, authorized 40,000,000
         shares, issued and outstanding 11,221,158 at
         April 29, 2001 and 11,208,720 at April 30, 2000         561       560
      capital contributed in excess of par value              36,915    35,266
      retained earnings                                       84,326    93,814
------------------------------------------------------------------------------
         total shareholders' equity                          121,802   129,640
------------------------------------------------------------------------------
         total liabilities and shareholders' equity         $289,580   343,980
------------------------------------------------------------------------------

The accompanying notes are an integral part of the consolidated financial
statements.
<PAGE>

CONSOLIDATED STATEMENTS OF INCOME (LOSS)
<TABLE>
<CAPTION>


For the years ended April 29, 2001, April 30, 2000,
and May 2, 1999 (dollars in thousands, except per share data)     2001      2000      1999
-------------------------------------------------------------------------------------------
<S>                                                          <C>          <C>      <C>
net sales                                                    $  409,810    488,079  483,084
cost of sales                                                   353,823    403,414  406,976
-------------------------------------------------------------------------------------------
   gross profit                                                  55,987     84,665   76,108
selling, general and administrative expenses                     50,366     59,935   59,968
restructuring expense                                             5,625          0        0
-------------------------------------------------------------------------------------------
   income (loss) from operations                                     (4)    24,730   16,140
interest expense                                                  9,114      9,521    9,615
interest income                                                     (46)       (51)    (195)
other expense                                                     3,336      1,566    1,864
-------------------------------------------------------------------------------------------
   income (loss) before income taxes                            (12,408)    13,694    4,856
income taxes                                                     (4,097)     4,314    1,206
-------------------------------------------------------------------------------------------
   net income (loss)                                         $   (8,311)     9,380    3,650
===========================================================================================
net income (loss) per share                                  $    (0.74)      0.81     0.28
-------------------------------------------------------------------------------------------
net income (loss) per share, assuming dilution               $    (0.74)      0.80     0.28
===========================================================================================

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

<PAGE>

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
                                                               capital
For the years ended April 29, 2001         common    common  contributed                 total
April 30, 2000 and May 2, 1999             stock     stock   in excess of   retained  shareholders'
(dollars in thousands, except share data)  shares    amount   par value     earnings     equity
--------------------------------------------------------------------------------------------------
<S>                                   <C>          <C>        <C>           <C>        <C>
balance, May 3, 1998                   13,007,021   $  650     40,882        90,541     132,073
   cash dividends ($0.14 per share)                                          (1,788)     (1,788)
   net income                                                                 3,650       3,650
   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        89,858     128,428
   cash dividends ($0.14 per share)                                          (1,611)     (1,611)
   net income                                                                 9,380       9,380
   common stock issued in connection
      with stock option plans              13,813        1         78                        79
   common stock purchased                (884,264)     (45)    (2,778)       (3,813)     (6,636)
--------------------------------------------------------------------------------------------------
balance, April 30, 2000                11,208,720      560     35,266        93,814     129,640
   cash dividends ($0.105 per share)                                         (1,177)     (1,177)
   net loss                                                                  (8,311)     (8,311)
   common stock issued in connection
      with stock option plans              12,438        1      1,649                     1,650
--------------------------------------------------------------------------------------------------
balance, April 29, 2001                11,221,158   $  561     36,915        84,326     121,802
--------------------------------------------------------------------------------------------------

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

For the years ended April 29, 2001, April 30, 2000, and May 2, 1999
(dollars in thousands)                                               2001        2000        1999
--------------------------------------------------------------------------------------------------
<S>                                                               <C>            <C>         <C>
cash flows from operating activities:
   net income (loss)                                              $ (8,311)      9,380       3,650
   adjustments to reconcile net income (loss) to net cash
     provided by operating activities:
       depreciation                                                 19,391      19,462      18,549
       amortization of intangible assets                             1,591       1,596       1,570
       amortization of deferred compensation                           360         250         250
       provision for deferred income taxes                          (5,394)      2,176       1,064
       restructuring expense                                         5,625           -           -
       changes in assets and liabilities:
         accounts receivable                                        17,374      (4,720)      3,133
         inventories                                                14,474      (7,401)     12,124
         other current assets                                          827         (16)        522
         other assets                                                  171        (770)       (654)
         accounts payable                                           (4,530)      1,029      (8,893)
         accrued expenses                                           (6,767)        890       2,486
         income taxes payable                                        1,268           -      (1,282)
--------------------------------------------------------------------------------------------------
            net cash provided by operating activities               36,079      21,876      32,519
--------------------------------------------------------------------------------------------------

cash flows from investing activities:
   capital expenditures                                             (8,050)    (22,559)    (10,689)
   purchase of restricted investments                                    -         (40)       (119)
   sale (purchase) of investments related to deferred
     compensation plan                                               4,547           -        (735)
   sale of restricted investments                                        -       3,380         800
--------------------------------------------------------------------------------------------------
            net cash used in investing activities                   (3,503)    (19,219)    (10,743)
--------------------------------------------------------------------------------------------------

cash flows from financing activities:
   proceeds from issuance of long-term debt                            564       9,543       2,637
   principal payments on long-term debt                            (26,394)    (14,047)    (16,284)
   cash dividends paid                                              (1,177)     (1,611)     (1,788)
   proceeds from common stock issued                                    17          21          35
   payments to acquire common stock                                      -      (6,636)     (5,542)
   change in accounts payable - capital expenditures                (5,386)     10,571      (2,637)
--------------------------------------------------------------------------------------------------
            net cash used in financing activities                  (32,376)     (2,159)    (23,579)
--------------------------------------------------------------------------------------------------

increase (decrease) in cash and cash investments                       200         498      (1,803)
cash and cash investments, beginning of year                         1,007         509       2,312
--------------------------------------------------------------------------------------------------
cash and cash investments, end of year                             $ 1,207       1,007         509
--------------------------------------------------------------------------------------------------

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.  GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
    Principles of Consolidation - The consolidated financial statements
    include the accounts of the company and its subsidiary, which is
    wholly-owned.  All significant intercompany balances and transactions
    are eliminated in consolidation.

    Description of Business - The company primarily manufactures and markets
    furniture upholstery fabrics and mattress ticking for the furniture,
    bedding, and related industries, with the majority of its business
    conducted in the United States.

    Fiscal Year - The company's fiscal year is the 52 or 53 week period
    ending on the Sunday closest to April 30.  Fiscal years 2001, 2000 and
    1999 included 52 weeks.

    Statements of Cash Flows - For purposes of reporting cash flows, the
    company considers all highly liquid debt instruments purchased with a
    maturity of three months or less to be cash investments.

    Accounts Receivable - Substantially all of the company's accounts
    receivable are due from manufacturers and distributors in the markets
    noted above.  The company grants credit to customers, a substantial
    number of which are located in the United States.  Management performs
    credit evaluations of the company's customers and generally does not
    require collateral.

    Inventories - Principally all inventories are valued at the lower of
    last-in, first-out (LIFO) cost or market.

    Property, Plant and Equipment - Property, plant and equipment is
    recorded at cost.  Depreciation is generally computed using the
    straight-line method over the estimated useful lives of the respective
    assets.  Major renewals and betterments are capitalized.  Maintenance,
    repairs and minor renewals are expensed as incurred.  When properties
    are retired or otherwise disposed of, the related cost and accumulated
    depreciation are removed from the accounts.  Amounts received on
    disposal less the book value of assets sold are charged or credited to
    income (loss).

    Interest costs of $99,000, $146,000 and $365,000 incurred during the
    years ended April 29, 2001, April 30, 2000 and May 2, 1999,
    respectively, for the construction of qualifying fixed assets were
    capitalized and are being amortized over the related assets' estimated
    useful lives.

    Foreign Currency Translation - The United States dollar is the
    functional currency for the company's Canadian subsidiary.  Translation
    gains or losses for this subsidiary are reflected in net income (loss).

    Goodwill and Other Intangible Assets - Goodwill, which represents the
    unamortized excess of the purchase price over the fair values of the net
    assets acquired, is being amortized using the straight-line method over
    40 years.  The company assesses the recoverability of goodwill by
    determining whether the amortization of the balance over its remaining
    life can be recovered through undiscounted future operating cash flows
    of the acquired businesses.  The assessment of the recoverability of
    goodwill will be impacted if estimated cash flows are not achieved.

    Other intangible assets are included in other assets and consist
    principally of debt issue costs.  Amortization is computed using the
    straight-line method over the respective terms of the debt agreements.

    Income Taxes - Deferred taxes are recognized for the temporary
    differences between the financial statement carrying amounts and the tax
    bases of the company's assets and liabilities and operating loss and tax
    credit carryforwards at income tax rates expected to be in effect when
    such amounts are realized or settled.  The effect on deferred taxes of a
    change in tax rates is recognized in income (loss) in the period that
    includes the enactment date.

    No provision is made for income taxes which may be payable if
    undistributed income of the company's Canadian subsidiary were to be
    paid as dividends to the company, since the company intends that such
    earnings will continue to be invested.  At April 29, 2001, the amount of
    such undistributed income was $21.2 million.  Foreign tax credits may be
    available as a reduction of United States income taxes in the event of
    such distributions.

    Revenue Recognition - Revenue is recognized when products are shipped to
    customers.  Provision is made currently for estimated product returns,
    claims and allowances.

    Stock Option Plans - SFAS No. 123, Accounting for Stock-Based
    Compensation, requires disclosure of the fair value and other
    characteristics of stock options (see note 12).  The company has chosen
    under the provisions of SFAS No. 123 to continue using the
    intrinsic-value method of accounting for employee stock-based
    compensation in accordance with Accounting Principles Board ("APB")
    Opinion No. 25, Accounting for Stock Issued to Employees.

    Fair Value of Financial Instruments - The carrying amount of cash and
    cash investments, accounts receivable, other current assets, accounts
    payable and accrued expenses approximates fair value because of the
    short maturity of these financial instruments.

    The fair value of the company's long-term debt is estimated by
    discounting the future cash flows at rates currently offered to the
    company for similar debt instruments of comparable maturities.  The fair
    value of the company's long-term debt is approximately $104 million at
    April 29, 2001.  See notes 10 and 16 for fair value disclosures related
    to interest rate swaps and foreign currency forward contracts,
    respectively.

    Interest Rate Swap Agreements - Interest rate swap agreements generally
    involve the exchange of fixed and floating rate interest payment
    obligations without the exchange of the underlying principal amounts.
    These agreements are used to effectively fix the interest rates on
    certain variable rate borrowings. Net amounts paid or received are
    reflected as adjustments to interest expense.  During 2001, the interest
    rate swaps no longer serve as a hedge due to the repayment of debt,
    consequently the interest rate swaps were recorded at fair value (see
    note 10).

    Forward Contracts - Gains and losses related to qualifying hedges of
    firm commitments to purchase fixed assets are deferred and included in
    the measurement of the related foreign currency transaction when the
    hedged transaction occurs.  During 2001, the company adopted a policy to
    manage the exposure related to purchases of inventories denominated in
    the Euro through the use of forward foreign currency exchange
    contracts.  At April 29, 2001, the duration of these contracts is 12
    months and attempts to match the anticipated payable payments.

    Per Share Data - Statement of Financial Accounting Standards No. 128
    requires the reporting of both net income (loss) per share and net
    income (loss) per share, assuming dilution.  The following table
    reconciles the numerators and denominators of net income (loss) per
    share and net income (loss) per share, assuming dilution:
<TABLE>
<CAPTION>

                                         2001                                 2000                               1999
------------------------------------------------------------------------------------------------------------------------------------
(Amounts in thousands,      (Loss)       Shares     Per Share    Income       Shares     Per Share   Income      Shares    Per Share
 except per share data)  (Numerator) (Denominator)   Amount    (Numerator) (Denominator)  Amount  (Numerator) (Denominator)  Amount
------------------------------------------------------------------------------------------------------------------------------------
<S>                        <C>           <C>       <C>           <C>          <C>        <C>       <C>           <C>         <C>
Net income (loss)
 per share                 $ (8,311)     11,210    $  (0.74)     $ 9,380      11,580     $  0.81   $  3,650      12,909      $  0.28
Effect of dilutive
 securities:
    Options                       0           0                        0         101                      0         155
                           ---------    -------    ---------     -------      ------     -------   --------      ------      -------
Net income (loss) per
 share, assuming dilution  $ (8,311)     11,210    $  (0.74)     $ 9,380      11,681     $  0.80   $  3,650      13,064      $  0.28
                           =========    =======    =========     =======      ======     =======   ========      ======      =======
</TABLE>

    Use of Estimates - The preparation of financial statements in conformity
    with generally accepted accounting principles requires management to
    make estimates and assumptions that affect the reported amounts of
    assets and liabilities and disclosure of contingent assets and
    liabilities at the date of the financial statements and the reported
    amounts of revenues and expenses during the reporting period.  Actual
    results could differ from those estimates.

    Reclassification - Certain items in the 2000 and 1999 consolidated
    financial statements have been reclassified to conform with the
    presentation adopted in the current year.  The reclassifications did not
    impact net income as previously reported.

2.  RESTRUCTURING
    To reduce costs and improve efficiency, the company is streamlining
    corporate structure, consolidating manufacturing operations and closing
    certain facilities.  In fiscal 2001, the company recorded restructuring
    charges of $6.5 million.  A portion of this restructuring charge,
    related to the write-down of inventories ($0.9 million), has been
    classified as a component of cost of sales.  In addition, the company
    recognized restructuring related charges, primarily costs related to
    moving equipment, of $0.9 million in 2001.  The company expects to
    recognize additional restructuring related charges, primarily costs
    related to moving equipment, of approximately $1.1 million in 2002.


    The following summarizes the fiscal 2001 restructuring (amounts in
    thousands):

                                          Non-cash     Paid in    April 29, 2001
                                Charges  Write-downs    2001     Reserve Balance
                                -------  -----------   -------    ------------
    Non-cash write-downs
       of fixed assets to net
       realizable value          $2,540     2,540          -             -
    Non-cash write-downs
      of inventories                874       874          -             -
    Employee termination
       benefits (110 salaried
       associates)                  969         -         491           478
    Lease termination costs
      and other contractual
      obligations                 1,260         -         176         1,084
    Other costs                     856         -          35           821
                                -------  -----------   -------    ------------
           Total                 $6,499     3,414         702         2,383
                                -------  -----------   -------    ------------

3.  ACCOUNTS RECEIVABLE
    A summary of accounts receivable follows:

    (dollars in thousands)                             2001        2000
-----------------------------------------------------------------------
    customers                                     $  60,218      77,981
    allowance for doubtful accounts                  (1,282)     (1,477)
    reserve for returns and allowances               (1,087)     (1,281)
-----------------------------------------------------------------------
                                                  $  57,849      75,223
-----------------------------------------------------------------------

4.  INVENTORIES
    A summary of inventories follows:

    (dollars in thousands)                             2001        2000
-----------------------------------------------------------------------
    inventories on the FIFO cost method
       raw materials                              $  31,489      43,661
       work-in-process                                4,748       5,970
       finished goods                                24,148      25,733
-----------------------------------------------------------------------
         total inventories on the FIFO cost method   60,385      75,364
    adjustments of certain inventories to the LIFO
       cost method                                     (388)       (893)
-----------------------------------------------------------------------
                                                  $  59,997      74,471
-----------------------------------------------------------------------

5.  PROPERTY, PLANT AND EQUIPMENT
    A summary of property, plant and equipment follows:

                                depreciable lives
    (dollars in thousands)         (in years)         2001        2000
-----------------------------------------------------------------------
    land and improvements                 10      $   2,243       2,325
    buildings and improvements          7-40         30,620      31,065
    leasehold improvements              7-10          2,534       2,659
    machinery and equipment             3-12        200,976     195,387
    office furniture and equipment      3-10         11,517      11,583
    capital projects in progress                      1,125       7,930
-----------------------------------------------------------------------
                                                    249,015     250,949
    accumulated depreciation                       (136,693)   (124,542)
-----------------------------------------------------------------------
                                                  $ 112,322     126,407
-----------------------------------------------------------------------

6.  GOODWILL
    A summary of goodwill follows:

    (dollars in thousands)                             2001        2000
-----------------------------------------------------------------------
    goodwill                                      $  55,547      55,547
    accumulated amortization                         (7,069)     (5,674)
-----------------------------------------------------------------------
                                                  $  48,478      49,873
-----------------------------------------------------------------------


7.  ACCOUNTS PAYABLE
    A summary of accounts payable follows:

    (dollars in thousands)                            2001        2000
----------------------------------------------------------------------
    accounts payable - trade                     $  21,949      26,479
    accounts payable - capital expenditures          5,422      10,808
----------------------------------------------------------------------
                                                 $  27,371      37,287
----------------------------------------------------------------------

8.  ACCRUED EXPENSES
    A summary of accrued expenses follows:

    (dollars in thousands)                            2001        2000
----------------------------------------------------------------------
    compensation and benefits                    $   6,503      14,748
    restructuring                                    2,383           0
    other                                            8,267       7,360
----------------------------------------------------------------------
                                                 $  17,153      22,108
----------------------------------------------------------------------

9.  INCOME TAXES
    A summary of income taxes follows:

    (dollars in thousands)                2001        2000        1999
----------------------------------------------------------------------
    current
      federal                           $ (315)        657      (1,508)
      state                                 11          45        (442)
      Canadian                           1,601       1,436       2,092
----------------------------------------------------------------------
                                         1,297       2,138         142
----------------------------------------------------------------------
    deferred
      federal                           (4,565)      1,514         612
      state                               (905)        378         279
      Canadian                              76         284         173
----------------------------------------------------------------------
                                        (5,394)      2,176       1,064
----------------------------------------------------------------------
                                        $(4,097)     4,314       1,206
----------------------------------------------------------------------

Income before income taxes related to the company's Canadian operation
for the years ended April 29,  2001,  April 30,  2000,  and May 2, 1999
was  $4,400,000, $4,900,000 and $6,900,000, respectively.

The following schedule summarizes the principal differences between
income taxes at the federal income tax rate and the effective income tax
rate reflected in the consolidated financial statements:

                                          2001        2000        1999
----------------------------------------------------------------------
    federal income tax rate              (35.0)%      35.0%       35.0%
    state income taxes, net of federal
      income tax benefit                  (4.7)        2.0        (2.2)
    exempt income of foreign sales
      corporation                         (0.4)       (3.6)       (2.8)
    gains on life insurance contracts      5.0        (1.5)       (3.9)
    other                                  2.1        (0.4)       (1.3)
----------------------------------------------------------------------
                                         (33.0)%      31.5%       24.8%
----------------------------------------------------------------------
    The tax effects of temporary differences that give rise to significant
    portions of the deferred tax assets and liabilities consist of the
    following:

    (dollars in thousands)                            2001        2000
----------------------------------------------------------------------
    deferred tax liabilities:
       property, plant and equipment, net        $ (15,753)    (14,987)
       goodwill                                     (3,938)     (3,175)
       other                                        (1,095)     (1,324)
----------------------------------------------------------------------
          total deferred tax liabilities           (20,786)    (19,486)
    deferred tax assets:
       accounts receivable                             724         843
       inventories                                   3,295       2,396
       compensation                                    556       2,358
       liabilities and reserves                      2,021       1,381
       alternative minimum tax                       1,061       1,485
       net operating loss carryforwards              8,028         528
----------------------------------------------------------------------
          gross deferred tax assets                 15,685       8,991
          valuation allowance                            0           0
----------------------------------------------------------------------
          total deferred tax assets                 15,685       8,991
----------------------------------------------------------------------
                                                 $  (5,101)    (10,495)
======================================================================

    Deferred taxes are classified in the accompanying consolidated balance
    sheet captions as follows:

    (dollars in thousands)                            2001        2000
----------------------------------------------------------------------
    other current assets                         $   5,229       6,964
    deferred income taxes                          (10,330)    (17,459)
----------------------------------------------------------------------
                                                 $  (5,101)    (10,495)
======================================================================

    At April 29, 2001, the company had an alternative minimum tax credit
    carryforward of approximately $1,061,000 for federal income tax
    purposes.  Federal and state net operating loss carryforwards with
    related tax benefits of $8,028,000 at April 29, 2001 expire in varying
    amounts through fiscal 2021.  The company believes that it is more
    likely than not that the results of future operations will generate
    sufficient taxable income to realize the existing deferred tax assets.

    Income tax refunds, net of income tax payments, were $369,000 in 2001.
    Income taxes paid, net of income tax refunds, were $2,027,000 in 2000
    and $2,217,000 in 1999.

10. LONG-TERM DEBT
    A summary of long-term debt follows:

    (dollars in thousands)                            2001        2000
----------------------------------------------------------------------
    senior unsecured notes                        $ 75,000      75,000
    industrial revenue bonds and other obligations  32,959      32,452
    revolving credit facility                          999      25,000
    obligations to sellers                           2,698       5,034
----------------------------------------------------------------------
                                                   111,656     137,486
    current maturities                              (2,488)     (1,678)
----------------------------------------------------------------------
                                                  $109,168     135,808
----------------------------------------------------------------------
    The senior unsecured notes have a fixed coupon rate of 6.76% and an
    average remaining term of 7 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 a 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 $25,000,000.  The
    agreement requires payment of a quarterly facility fee.  In January
    2001, the company amended the Credit Agreement to amend certain
    covenants.  Additionally, the amendment increased the interest rate from
    LIBOR plus 1.10% to 1.60% to LIBOR plus 2.50% to 4.25%.  The interest
    rate matrix is based on the company's debt to EBITDA ratio, as defined
    by the agreement.  The amended agreement also limits capital
    expenditures and restricts dividends and common stock repurchases.  On
    borrowings outstanding at April 29, 2001, the interest rate was 9.06%
    (LIBOR plus 4.00%).

    The company's $2,000,000 revolving line of credit expires in April
    2002.  At April 29, 2001, no borrowings were outstanding under the
    revolving line of credit.

    The industrial revenue bonds (IRB) are generally due in balloon
    maturities which occur at various dates from 2009 to 2013.  At April 29,
    2001, the bonds bear interest at variable rates with a weighted average
    of 8.93%, including the letter of credit fee percentage. The IRBs are
    collateralized by letters of credit for the outstanding balance of the
    IRBs and certain interest payments due thereunder.  The January 2001
    amendment to the Credit Agreement also increased the letter of credit
    fees to a range from 2.50% to 4.25%, based on the company's debt to
    EBITDA ratio.  The letter of credit fee percentage as of April 29, 2001
    was 4.00%.

    The company's loan agreements require, among other things, that the
    company maintain compliance with certain financial ratios.  At April 29,
    2001, the company was in compliance with these amended financial
    covenants.

    At April 29, 2001, the company had two interest rate swap agreements
    with a bank.  The following table summarizes certain data regarding the
    interest rate swaps:

    notional amount    interest rate    expiration date
    ---------------------------------------------------
      $5,000,000            6.9%          June 2002
      $5,000,000            6.6%          July 2002

    During 2001, the company recorded a mark-to-market loss of $219,000
    because the interest rate swaps no longer serve as a hedge due to the
    repayment of debt.  Net amounts received/paid under the interest rate
    swaps decreased interest expense by approximately $6,000 in 2001 and
    increased interest expense by approximately $262,000 in 2000 and
    $308,000 in 1999.  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.

    The principal payment requirements of long-term debt during the next
    five years are: 2002 - $2,488,000; 2003 - $2,147,000; 2004 - $470,000;
    2005 - $470,000; and 2006 - $11,469,000.

    Interest paid during 2001, 2000 and 1999 totaled $8,950,000, $9,920,000,
    and $9,579,000, respectively.

11. COMMITMENTS AND CONTINGENCIES
    The company leases certain office, manufacturing and warehouse
    facilities and equipment, primarily computer, and vehicles, under
    noncancellable operating leases. Lease terms related to real estate
    range from five to ten years with renewal options for additional periods
    ranging from five to fifteen years. The leases generally require the
    company to pay real estate taxes, maintenance, insurance and other
    expenses. Rental expense for operating leases, net of sublease income,
    was $7,907,000 in 2001; $8,162,000 in 2000; and $7,440,000 in 1999.
    Future minimum rental commitments for noncancellable operating leases
    are $5,375,000 in 2002; $3,796,000 in 2003; $2,841,000 in 2004;
    $2,414,000 in 2005; $1,636,000 in 2006; and $2,186,000 in later years.

    The company is involved in several legal proceedings and claims which
    have arisen in the ordinary course of its business.  These actions, when
    ultimately concluded and settled, will not, in the opinion of
    management, have a material adverse effect upon the financial position,
    results of operations or liquidity of the company.

    The company has outstanding capital expenditure commitments of
    approximately $312,000 as of April 29, 2001.

12. STOCK OPTION PLANS
    The company has a fixed stock option plan under which options to
    purchase common stock may be granted to officers, directors and key
    employees.  At April 29, 2001, 1,130,176 shares of common stock were
    authorized for issuance under the plan.  Options are generally
    exercisable from one to five years after the date of grant and generally
    expire beginning five to ten years after the date of grant.

    No compensation cost has been recognized for this stock option plan as
    options are granted under the plan at an option price not less than fair
    market value at the date of grant.

    A summary of the status of the plan as of April 29, 2001, April 30, 2000
    and May 2, 1999 and changes during the years ended on those dates is
    presented below:

<TABLE>
<CAPTION>
                                           2001                    2000                  1999
------------------------------------------------------------------------------------------------
                                           Weighted-              Weighted-            Weighted-
                                             Average                Average              Average
                                            Exercise               Exercise             Exercise
                                 Shares        Price      Shares     Price     Shares     Price
------------------------------------------------------------------------------------------------
<S>                            <C>          <C>          <C>        <C>       <C>        <C>
    Outstanding at
      beginning of year         661,114      $ 9.98       622,052    $10.04     429,427   $11.06
    Granted                     130,250        3.11        49,375      8.80     209,375     7.62
    Exercised                    (2,438)       2.82        (7,313)     2.82     (10,750)    3.28
    Canceled/expired                  -           -        (3,000)    20.25      (6,000)   10.56
------------------------------------------------------------------------------------------------
    Outstanding at
      end of year               788,926        8.87       661,114      9.98     622,052    10.04
------------------------------------------------------------------------------------------------
    Options exercisable at
      year-end                  549,926       10.41       461,114     10.88     422,052    11.18
    Weighted-average fair value
      of options granted during
      the year                    $1.60                      3.54                 $2.88
================================================================================================
</TABLE>

<TABLE>
<CAPTION>

                            Options Outstanding                   Options Exercisable
--------------------------------------------------------------------------------------------
                     Number    Weighted-Avg.                      Number
    Range of      Outstanding   Remaining        Weighted-Avg.  Exercisable    Weighted-Avg.
Exercise Prices    at 4/29/01  Contractual Life  Exercise Price  at 4/29/01   Exercise Price
--------------------------------------------------------------------------------------------
<S>                 <C>          <C>                 <C>          <C>            <C>
$  3.03 - $  3.03   119,000      4.9 years           $3.03           -           $      -
$  4.00 - $  7.50   118,926      3.0                  4.91        118,926            4.91
$  7.63 - $  7.63   200,000      7.4                  7.63         80,000            7.63
$  7.75 - $ 12.75   235,375      4.6                 10.11        235,375           10.11
$ 13.34 - $ 20.94   115,625      5.7                 18.58        115,625           18.58
                    -------      ---                 -----        -------           -----
                    788,926      5.3                  8.87        549,926           10.41
                    =======      ===                 =====        =======           =====
</TABLE>

    During fiscal 1995, the company adopted a stock option plan which
    provided for the one-time grant to officers and certain senior managers
    of options to purchase 121,000 shares of the company's common stock at
    $.05 (par value) per share.  As of April 29, 2001, the 58,500 options
    outstanding under the plan have exercise prices of $0.05 and a
    weighted-average remaining contractual life of 2.7 years.  Options
    exercised during fiscal 2001, 2000 and 1999 were 0, 6,500 and 0,
    respectively.

    During September 1997, the company's shareholders approved the 1997
    performance-based option plan which provides for the one-time grant to
    certain officers and certain senior managers of options to purchase
    106,000 shares of the company's common stock at $1.00 per share.
    Options under the plan are generally exercisable on January 1, 2006.
    During fiscal 2001, 2000 and 1999, the compensation expense recorded
    under APB Opinion No. 25 was $360,000, $250,000 and $250,000,
    respectively.

    As of April 29, 2001, the 96,000 options outstanding under the plan have
    exercise prices of $1.00 and a weighted-average remaining contractual
    life of 5.7 years.  Options exercised during fiscal 2001, 2000 and 1999
    were 10,000, 0 and 0, respectively.  Had compensation cost for this
    stock-based compensation plan and the fixed stock option plan with
    788,926 options outstanding at April 29, 2001 been determined consistent
    with SFAS No. 123, the company's net income (loss), net income (loss)
    per share and net income (loss) per share, assuming dilution would have
    been changed to the pro forma amounts indicated below:

    (in thousands, except per share data)          2001       2000       1999
    ---------------------------------------------------------------------------
    Net income (loss)      As reported         $(8,311)      9,380       3,650
                           Pro forma            (8,548)      9,145       3,375
    ---------------------------------------------------------------------------
    Net income (loss) per  As reported         $ (0.74)      0.81         0.28
      share                Pro forma             (0.76)      0.79         0.26
    ---------------------------------------------------------------------------
    Net income (loss) per  As reported         $ (0.74)      0.80         0.28
      share, assuming      Pro forma             (0.76)      0.78         0.26
      dilution
    ---------------------------------------------------------------------------

    The fair value of each option grant is estimated on the date of grant
    using the Black Scholes option-pricing model with the following
    weighted-average assumptions used for grants in 2001, 2000 and 1999,
    respectively:  dividend yield of 0%, 1.5% and 1.5%; risk-free interest
    rates of 4.6%, 5.7% and 5.4%; expected volatility of 54%, 49% and 47%;
    and expected lives of 5 years, 4 years and 4 years.

13. BENEFIT PLANS
    The company has a defined contribution plan which covers substantially
    all employees and provides for participant contributions on a pre-tax
    basis and discretionary matching contributions by the company, which are
    determined annually.  Company contributions to the plan were $2,301,000
    in 2001; $2,423,000 in 2000; and $1,612,000 in 1999.

    In addition to the defined contribution plan, the company had a
    nonqualified deferred compensation plan covering officers and certain
    other associates.  During 2001, the company terminated the nonqualified
    deferred compensation plan.  As a result, the company surrendered the
    life insurance contracts related to the nonqualified plan in order to
    pay the participants.  The proceeds from those life insurance contracts
    totaled $4,747,000.  The company's nonqualified plan liability of $0 and
    $4,788,000 at April 29, 2001 and April 30, 2000, respectively, was
    included in accrued expenses in the accompanying consolidated balance
    sheets.  The company also had assets related to the nonqualified plan of
    $0 and $4,864,000 at April 29, 2001 and April 30, 2000, respectively,
    which were included in other assets in the accompanying consolidated
    balance sheets.

14. 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.

    International sales, of which 91%, 94% and 94% were denominated in U.S.
    dollars in 2001, 2000, and 1999, respectively, accounted for 19% of net
    sales in 2001 and 23% in 2000 and 1999, and are summarized by geographic
    area as follows:

    (dollars in thousands)                       2001        2000        1999
------------------------------------------------------------------------------
    North America (excluding USA)            $  34,049      36,032      31,102
    Europe                                       6,262      16,351      19,578
    Middle East                                 17,831      32,929      33,996
    Asia and Pacific Rim                        15,497      19,102      21,371
    South America                                1,028       2,343       3,484
    All other areas                              3,157       4,347       3,823
------------------------------------------------------------------------------
                                             $  77,824     111,104     113,354
------------------------------------------------------------------------------

    In 2001, one customer represented approximately 11% of consolidated net
    sales.  In 2000 and 1999, no customer represented over 10% of
    consolidated net sales.  In addition, company assets located outside the
    United States are not material for any of the three years presented.

    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)                      2001        2000        1999
------------------------------------------------------------------------------
    Net sales
        Upholstery Fabrics                   $ 305,012     382,310     387,644
        Mattress Ticking                       104,798     105,769      95,440
------------------------------------------------------------------------------
                                             $ 409,810     488,079     483,084
==============================================================================

    Gross profit
        Upholstery Fabrics                   $  29,511      58,547      52,286
        Mattress Ticking                        26,476      26,118      23,822
------------------------------------------------------------------------------
                                             $  55,987      84,665      76,108
==============================================================================

    Inventories
        Upholstery Fabrics                   $  47,129      60,305      55,565
        Mattress Ticking                        12,868      14,166      11,505
------------------------------------------------------------------------------
                                             $  59,997      74,471      67,070
==============================================================================

15. RELATED PARTY TRANSACTIONS
    A director of the company is also an officer and director of a major
    customer of the company. The amount of sales to this customer was
    approximately $45,230,000 in 2001; $39,479,000 in 2000; and $34,313,000
    in 1999.  The amount due from this customer at April 29, 2001 was
    approximately $5,399,000 and at April 30, 2000 was approximately
    $3,797,000.

    A director of the company is also an officer and director of the lessor
    of the company's office facilities in High Point.  Rent expense for the
    company's office facilities was approximately $562,000 in 2001; $522,000
    in 2000; and $555,000 in 1999.

    Rents paid to entities owned by certain shareholders and officers of the
    company and their immediate families were $695,000 in 2001 and 2000; and
    $752,000 in 1999.

16. 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 $1,547,000 and $4,761,000 of outstanding
    foreign exchange forward contracts as of April 29, 2001 and April 30,
    2000, respectively (denominated in Euros at April 29, 2001).  Due to the
    short maturity of these financial instruments, the fair values of these
    contracts approximate the contract amounts at April 29, 2001 and April
    30, 2000, respectively.

    During 2001, the company adopted a policy to manage the exposure related
    to purchases of inventories denominated in the Euro through the use of
    forward exchange contracts.  At April 29, 2001, the duration of these
    contracts is 12 months and attempts to match the anticipated payable
    payments.  At April 29, 2001, the amount of the remaining contracts was
    $11,715,000 and unrealized mark-to-market losses, recorded in accrued
    expenses in the balance sheet, were $643,000.  These transactions do not
    qualify as hedges for financial reporting purposes and, as a result,
    changes in the fair value of the contracts are recorded as other expense
    in the statement of income (loss).
<PAGE>

SELECTED QUARTERLY DATA
<TABLE>
<CAPTION>

                                        fiscal     fiscal     fiscal      fiscal       fiscal       fiscal      fiscal      fiscal
(amounts in thousands,                   2001       2001       2001        2001         2000         2000        2000        2000
 except per share amounts)           4th quarter 3rd quarter 2nd quarter 1st quarter 4th quarter 3rd quarter 2nd quarter 1st quarter
-----------------------------------------------------------------------------------------------------------------------------------
<S>                                   <C>           <C>       <C>        <C>           <C>        <C>         <C>          <C>
INCOME STATEMENT DATA
   net sales                          $ 101,071     95,880    110,981    101,878       129,419    113,181     129,542      115,937
   cost of sales                         85,978     86,047     94,094     87,704       107,342     94,712     105,835       95,525
-----------------------------------------------------------------------------------------------------------------------------------
     gross profit                        15,093      9,833     16,887     14,174        22,077     18,469      23,707       20,412
   SG & A expenses                       10,617     12,480     13,491     13,778        14,913     13,949      16,035       15,038
   restructuring expense                  3,121      2,504          0          0             0          0           0            0
-----------------------------------------------------------------------------------------------------------------------------------
     income (loss) from operations        1,355     (5,151)     3,396        396         7,164      4,520       7,672        5,374
   interest expense                       2,284      2,222      2,285      2,323         2,255      2,366       2,484        2,416
   interest income                           (6)       (18)       (15)        (7)          (10)        (8)        (16)         (17)
   other expense                          1,209        811        575        741           366        229         416          555
-----------------------------------------------------------------------------------------------------------------------------------
     income (loss) before income taxes   (2,132)    (8,166)       551     (2,661)        4,553      1,933       4,788        2,420
   income taxes                            (705)    (2,696)       209       (905)        1,362        501       1,628          823
-----------------------------------------------------------------------------------------------------------------------------------
     net income (loss)                   (1,427)    (5,470)       342     (1,756)        3,191      1,432       3,160        1,597
--------------------------------------- -------------------------------------------------------------------------------------------
   EBITDA (3)                         $   5,208       (648)     8,265      5,177        12,248      9,715      12,472       10,037
   depreciation                           4,610      4,738      4,983      5,060         4,981      4,965       4,757        4,759
   cash dividends                             0        392        393        392           393        396         399          423
--------------------------------------- -------------------------------------------------------------------------------------------
   weighted average shares outstanding   11,212     11,211     11,209     11,209        11,213     11,296      11,749       12,063
   weighted average shares outstanding,
     assuming dilution                   11,212     11,211     11,270     11,209        11,298     11,389      11,868       12,219
-----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
   net income (loss)                  $   (0.13)     (0.49)      0.03      (0.16)         0.28       0.13        0.27         0.13
   net income (loss), assuming dilution   (0.13)     (0.49)      0.03      (0.16)         0.28       0.13        0.27         0.13
   cash dividends                             0      0.035      0.035      0.035         0.035      0.035       0.035        0.035
   book value                             10.85      10.85      11.37      11.37         11.57      11.31       11.17        10.73
-----------------------------------------------------------------------------------------------------------------------------------
BALANCE SHEET DATA
   working capital                    $  78,629     90,968     94,272    100,288        99,977     97,440      92,800      100,394
   property, plant and equipment, net   112,322    116,207    120,023    123,636       126,407    123,303     124,318      120,971
   total assets                         289,580    302,918    324,412    326,483       343,980    337,308     339,778      328,924
   capital expenditures                   1,518      2,873      1,370      2,289         8,085      3,950       8,104        2,420
   long-term debt                       109,168    119,213    125,079    135,150       135,808    137,052     133,875      136,228
   funded debt (1)                      111,656    121,372    126,757    136,828       137,486    137,683     134,468      136,222
   shareholders' equity                 121,802    121,586    127,441    127,492       129,640    126,867     126,482      129,229
   capital employed (4)                 233,458    242,958    254,198    264,320       267,126    264,550     260,950      265,451
-----------------------------------------------------------------------------------------------------------------------------------
RATIOS & OTHER DATA
   gross profit margin                     14.9%      10.3%      15.2%      13.9%         17.1%      16.3%       18.3%        17.6%
   operating income (loss) margin           1.3       (5.4)       3.1        0.4           5.5        4.0         5.9          4.6
   net income (loss) margin                (1.4)      (5.7)       0.3       (1.7)          2.5        1.3         2.4          1.4
   EBITDA margin                            5.2       (0.7)       7.4        5.1           9.5        8.6         9.6          8.7
   effective income tax rate               33.1       33.0       37.9       34.0          29.9       25.9        34.0         34.0
   funded debt-to-total capital ratio (1)  47.8       50.0       49.9       51.8          51.5       52.0        51.5         51.3
   working capital turnover                 4.0        4.1        4.2        4.3           4.4        4.5         4.4          4.4
   days sales in receivables                 52         48         52         49            53         49          49           45
   inventory turnover                       5.4        4.9        5.1        4.7           5.5        4.8         5.5          5.4
----------------------------------------------------------------------------------------------------------------------------------
STOCK DATA
   stock price
     high                             $    5.25       4.13       5.69       7.25          9.88       7.50       10.31        11.06
     low                                   2.37       1.63       3.63       4.94          5.00       5.88        6.69         7.25
     close                                 4.95       3.63       3.88       5.81          5.81       6.00        6.94        10.13
   P/E ratio (2)
     high  (5)                              N.M        N.M       19.9       13.7          12.2        9.7        12.8         17.7
     low (5)                                N.M        N.M       12.7        9.3           6.2        7.6         8.3         11.6
   daily average trading volume (shares)   13.0       39.1        6.6        6.7          12.0       10.0        18.8         21.9
----------------------------------------------------------------------------------------------------------------------------------
(1)  Funded debt includes long- and short-term debt, less restricted investments.
(2)  P/E ratios based on trailing 12-month net income (loss) per share.
(3)  EBITDA represents earnings before interest, income taxes, depreciation and amortization.
(4)  Capital employed includes funded debt and shareholders' equity.
(5)  N.M - Not meaningful
</TABLE>

<PAGE>


            ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
                       ON ACCOUNTING AND FINANCIAL DISCLOSURE

            During  the two  years  ended  April 29,  2001 and any  subsequent
interim periods,  there were no changes of accountants and/or disagreements on
any matters of  accounting  principles  or practices  or  financial  statement
disclosures.

                                    PART III

         ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

            Information  with respect to executive  officers and  directors of
the Company is included in the  Company's  definitive  Proxy  Statement  filed
within  120 days  after  the end of the  Company's  fiscal  year  pursuant  to
Regulation 14A of the Securities  and Exchange  Commission,  under the caption
"Nominees,  Directors and Executive  Officers,"  which  information  is herein
incorporated by reference.


                       ITEM 11.  EXECUTIVE COMPENSATION

            Information with respect to executive  compensation is included in
the Company's  definitive  Proxy Statement filed within 120 days after the end
of the Company's  fiscal year pursuant to Regulation 14A of the Securities and
Exchange  Commission,   under  the  caption  "Executive  Compensation,"  which
information is herein incorporated by reference.


             ITEM  12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
                             OWNERS AND MANAGEMENT

            Information  with  respect to the  security  ownership  of certain
beneficial  owners and  management  is  included in the  Company's  definitive
Proxy  Statement  filed within 120 days after the end of the Company's  fiscal
year pursuant to Regulation  14A of the  Securities  and Exchange  Commission,
under  the  caption   "Voting   Securities,"   which   information  is  herein
incorporated by reference.

           ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

            Information  with  respect to certain  relationships  and  related
transactions  is included in the Company's  definitive  Proxy  Statement filed
within  120 days  after  the end of the  Company's  fiscal  year  pursuant  to
Regulation  14A  of  the  Securities  and  Exchange   Commission,   under  the
subcaption   "Certain   Relationships   and   Related   Transactions,"   which
information is herein incorporated by reference.
<PAGE>

                                    PART IV

               ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES
                            AND REPORTS ON FORM 8-K

a)    DOCUMENTS FILED AS PART OF THIS REPORT:

      1.    Consolidated Financial Statements

            The following  consolidated financial statements of Culp, Inc. and
subsidiary are filed as part of this report.

                                                               Page of Annual
                                                                  Report on
Item                                                              Form 10-K
----                                                              ---------
Consolidated Balance Sheets - April 29, 2001 and.................    27
   April 30, 2000

Consolidated Statements of Income (Loss) -
  for the years ended April 29, 2001,
  April 30, 2000, and May 2, 1999 ...............................    28

Consolidated Statements of Shareholders' Equity -
  for the years ended April 29, 2001,
  April 30, 2000 and May 2, 1999 ................................    29

Consolidated Statements of Cash Flows -
  for the years ended April 29, 2001,
  April 30, 2000, and May 2, 1999 ...............................    30

Consolidated Notes to Financial Statements.......................    31

Report of Independent Auditors ..................................    26


      2.    Financial Statement Schedules

            All financial  statement  schedules  are omitted  because they are
not  applicable,  or not  required,  or because the  required  information  is
included in the consolidated financial statements or notes thereto.

<PAGE>


      3.    Exhibits

            The following  exhibits are attached at the end of this report, or
incorporated by reference herein.  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.

     3(iii)     Articles of Amendment  of Culp,  Inc.  dated  October 5,
                1999 for the purpose of amending  its  Restated  Charter
                to fix the  designation,  preferences,  limitations  and
                relative  rights  of a series  of its  Preferred  Stock.
                The Articles of Amendment  of Culp,  Inc.  were filed as
                Exhibit  3(iii)  to the  Company's  Form  10-Q  for  the
                quarter  ended  October 31,  1999,  filed  December  15,
                1999, 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 29,  1990,
                filed on July 25, 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)      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(j)      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(k)      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(l)      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(m)      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(n)      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(o)      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(p)      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(q)      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(r)      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(s)      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(t)      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(u)      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(v)      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(w)      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(x)      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(y)      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(z)      $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(aa)    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.

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

     10(bb)    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(cc)     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(dd)     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(ee)     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.

     10(ff)     Rights Agreement,  dated as of October 8, 1999,  between
                Culp, Inc. and EquiServe Trust Company,  N.A., as Rights
                Agent,  including the form of Articles of Amendment with
                respect to the Series A  Participating  Preferred  Stock
                included  as  Exhibit  A to the  Rights  Agreement,  the
                forms of Rights  Certificate  included  as  Exhibit B to
                the Rights Agreement,  and the form of Summary of Rights
                included  as  Exhibit  C to the  Rights  Agreement.  The
                Rights  Agreement  was  filed  as  Exhibit  99.1  to the
                Company's  Form  8-K  dated  October  12,  1999,  and is
                incorporated herein by reference.

     10(gg)     Third  Amendment  to Credit  Agreement  dated  April 28,
                2000, 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, as lenders.  This amendment was filed as
                Exhibit  10(pp) to the Company's  Form 10-K for the year
                ended  April 30,  2000,  and is  incorporated  herein by
                reference.

     10(hh)     Fourth  Amendment  to Credit  Agreement  dated  July 30,
                2000, 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, as lenders.  This amendment was filed as
                Exhibit  10(qq)  to the  Company's  Form  10-Q  for  the
                quarter ended July 30, 2000, and is incorporated  herein
                by reference.

     10(ii)     Amendments   to  1993  Stock  Option   Agreement   dated
                September  26,  2000.   This   amendment  was  filed  as
                Exhibit  10(rr)  to the  Company's  Form  10-Q  for  the
                quarter  ended  October 29,  2000,  and is  incorporated
                herein by reference. (*)

     10(jj)     Fifth  Amendment to Credit  Agreement  dated January 26,
                2001, 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, as lenders.  This amendment was filed as
                Exhibit  10(ss)  to the  Company's  Form  10-Q  for  the
                quarter  ended  January 28,  2001,  and is  incorporated
                herein by reference.

     10(kk)     Second   Amendment   to   Reimbursement   and   Security
                Agreements  dated January 26, 2001,  made by and between
                Culp,  Inc. and Wachovia  Bank,  N.A. This amendment was
                filed as Exhibit  10(tt) to the Company's  Form 10-Q for
                the quarter ended January 28, 2001, and is  incorporated
                herein by reference.

     21        List of subsidiaries of the Company

     23(a)     Consent of  Independent  Public  Auditors in connection  with
               the  registration  statements  of  Culp,  Inc.  on  Form  S-8
               (File Nos. 33-13310, 33-37027, 33-80206, 33-62843, 333-27519,
               333-59512 and 333-59514), dated March 20, 1987, September 18,
               1990,  June 13, 1994, September 22, 1995, May 21, 1997, April
               25, 2001, and April 25, 2001.

     24(a)     Power of Attorney of Howard L. Dunn, Jr., dated June 29, 2001

     24(b)     Power of Attorney of H. Bruce English, dated June 25, 2001

     24(c)     Power of Attorney of Patrick B. Flavin, dated July 18, 2001

     24(d)     Power of Attorney of Patrick H. Norton, dated July 5,  2001

     24(e)     Power of Attorney of Earl N. Phillips, Jr., dated June 29, 2001

     24(f)     Power of Attorney of Judith C. Walker, dated June 27, 2001

b)    Reports on Form 8-K:

      The  Company  filed  the  following  report  on Form  8-K  during  the
quarter ended April 29, 2001:

      (1)         Form 8-K dated  February 20, 2001,  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 January 28, 2001.

c)    Exhibits:

          The  exhibits to this Form 10-K are filed at the end of this Form
     10-K immediately  preceded by an index. A list of the  exhibits begins
     on page 52 under the subheading "Exhibits Index".

d)    Financial Statement Schedules:

      See Item 14(a) (2)

<PAGE>
                                SIGNATURES

                 Pursuant  to  the   requirements   of  Section  13  of  the
Securities  Exchange  Act of 1934,  CULP,  INC. has caused this report to be
signed on its behalf by the undersigned,  thereunto duly authorized,  on the
26th day of July 2001.

                        CULP, INC.
                        By /s/    Robert G. Culp, III
                                  Robert G. Culp, III
                                 (Chairman and Chief Executive Officer)

                        By: /s/   Franklin N. Saxon
                                  Franklin N. Saxon
                                  (Executive Vice President and Chief Financial
                                  and Accounting Officer)

            Pursuant to the  requirements of the Securities  Exchange Act of
1934,  this report has been signed below by the following  persons on behalf
of the registrant  and in the  capacities  indicated on the 26th day of July
2001.

/s/   Robert G. Culp, III           /s/   Patrick H. Norton *
      Robert G. Culp, III                 Patrick H. Norton
      (Chairman of the                    (Director)
       Board of Directors)

/s/   Franklin N. Saxon             /s/   Judith C. Walker *
      Franklin N. Saxon                   Judith C. Walker
         (Director)                         (Director)

/s/   Howard L. Dunn, Jr.*          /s/   H. Bruce English*
      Howard L. Dunn, Jr.                 H. Bruce English
         (Director)                         (Director)

/s/   Patrick B. Flavin*            /s/   Earl N. Phillips, Jr.*
      Patrick B. Flavin                   Earl N. Phillips, Jr.
         (Director)                         (Director)

*     By  Franklin  N.  Saxon,  Attorney-in-Fact,   pursuant  to  Powers  of
Attorney filed with the Securities and Exchange Commission.


<PAGE>

                             EXHIBITS INDEX


Exhibit Number  Exhibit

     21        List of subsidiaries of the Company

     23(a)     Consent of  Independent  Public  Auditors in connection  with
               the  registration  statements of Culp, Inc. on Form S-8 (File
               Nos. 33-13310, 33-37027,   33-80206,   33-62843,   333-27519,
               333-59512  and  333-59514),  dated March 20, 1987,  September
               18, 1990,  June 13, 1994,  September 22, 1995,  May 21, 1997,
               April 25, 2001, and April 25, 2001.

     24(a)     Power of Attorney of Howard L. Dunn, Jr., dated June 29, 2001

     24(b)     Power of Attorney of H. Bruce English, dated June 25, 2001

     24(c)     Power of Attorney of Patrick B. Flavin, dated July 18, 2001

     24(d)     Power of Attorney of Patrick H. Norton, dated July 5,  2001

     24(e)     Power of Attorney of Earl N. Phillips, Jr., dated June 29, 2001

     24(f)     Power of Attorney of Judith C. Walker, dated June 27, 2001





</TEXT>
</DOCUMENT>
