10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 30, 2016

Commission File No. 1-12597

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)
1823 Eastchester Drive
High Point, North Carolina	27265-1402
(Address of principal executive offices)	(zip code)

(336) 889-5161

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to the filing requirements for at least the past 90 days.☒YES   ☐ NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period after the registrant was required to submit and post such files).  ☒YES  ☐ NO

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "accelerated filer, large accelerated filer, and smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one);

Large accelerated filer    ☐	Accelerated filer    ☒	Non-accelerated filer    ☐
	Smaller Reporting Company    ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  ☐ YES   ☒ NO

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

Common shares outstanding at October 30, 2016:  12,311,756

Par Value: $0.05 per share

INDEX TO FORM 10-Q

For the period ended October 30, 2016

Page

Part I - Financial Statements

	Consolidated Statements of Net Income — Three and Six Months Ended October 30, 2016 and November 1, 2015	I-1
	Consolidated Statements of Comprehensive Income – Three and Six Months Ended October 30, 2016 and November 1, 2015	I-2
	Consolidated Balance Sheets — October 30, 2016, November 1, 2015, and
	May 1, 2016	I-3
	Consolidated Statements of Cash Flows — Six Months Ended October 30, 2016 and November 1, 2015	I-4
	Consolidated Statements of Shareholders' Equity	I-5
	Notes to Consolidated Financial Statements	I-6
	Cautionary Statement Concerning Forward-Looking Information	I-28
Item 2.     Management's Discussion and Analysis of Financial Condition and Results of Operations		I-29
Item 3.     Quantitative and Qualitative Disclosures About Market Risk		I-46
Item 4.     Controls and Procedures		I-46
Part II - Other Information
Item 1.     Legal Proceedings		II-1
Item 1A.  Risk Factors		II-1
Item 2.     Unregistered Sales of Equity Securities and Use of Proceeds		II-1
Item 6.     Exhibits		II-2
Signatures		II-3

Item 1:  Financial Statements

CULP, INC.

CONSOLIDATED STATEMENTS OF NET INCOME  

FOR THE THREE AND SIX MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015

UNAUDITED

(Amounts in Thousands, Except for Per Share Data)

	THREE MONTHS ENDED
	October 30,				November 1,
	2016				2015
Net sales		$	75,343			76,956
Cost of sales			58,442			61,223
Gross profit			16,901			15,733
Selling, general and
administrative expenses			9,602			9,433
Income from operations			7,299			6,300
Interest income			(15	)		(69	)
Other expense			155			225
Income before income taxes			7,159			6,144
Income taxes			2,684			2,373
Net income		$	4,475			3,771
Net income per share, basic		$	0.36			0.31
Net income per share, diluted			0.36			0.30
Average shares outstanding, basic			12,308			12,343
Average shares outstanding, diluted			12,507			12,484
	SIX MONTHS ENDED
			October 30,			November 1,
			2016			2015
Net sales		$	156,026			157,141
Cost of sales			120,705			125,206
Gross profit			35,321			31,935
Selling, general and
administrative expenses			19,348			18,175
Income from operations			15,973			13,760
Interest income			(40	)		(112	)
Other expense			307			320
Income before income taxes			15,706			13,552
Income taxes			5,917			5,081
Net income		$	9,789			8,471
Net income per share, basic		$	0.80			0.69
Net income per share, diluted			0.78			0.68
Average shares outstanding, basic			12,297			12,310
Average shares outstanding, diluted			12,495			12,481
See accompanying notes to consolidated financial statements.

I-1

CULP, INC.   

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE AND SIX MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015

(UNAUDITED)

 (AMOUNTS IN THOUSANDS)  

	THREE MONTHS ENDED
	October 30,		November 1,
	2016		2015
Net income	$	4,475	$	3,771
Other comprehensive income (loss)
Unrealized gains (losses) on investments
Unrealized holding gains (losses) on investments		4		(29	)
Reclassification adjustment for realized loss included in net income		-		56
Total other comprehensive income		4		27
Comprehensive income	$	4,479	$	3,798
	SIX MONTHS ENDED
		October 30,		November 1,
		2016		2015
Net income	$	9,789	$	8,471
Other comprehensive gain (loss)
Unrealized gains (losses) on investments
Unrealized holding gains (losses) on investments		88		(118	)
Reclassification adjustment for realized loss included in net income		12		56
Total other comprehensive gain (loss)		100		(62	)
Comprehensive income	$	9,889	$	8,409
See accompanying notes to consolidated financial statements.

I-2

CULP, INC.

CONSOLIDATED BALANCE SHEETS

OCTOBER 30, 2016, NOVEMBER 1, 2015 AND MAY 1, 2016

UNAUDITED  

(Amounts in Thousands)

		October 30,			November 1,			* May 1,
		2016			2015			2016
Current assets:
Cash and cash equivalents		$	13,910			31,176			37,787
Short-term investments			2,430			6,320			4,359
Accounts receivable, net			19,039			23,314			23,481
Inventories			45,954			46,479			46,531
Income taxes receivable			-			75			155
Other current assets			1,675			2,614			2,477
	Total current assets		83,008			109,978			114,790
Property, plant and equipment, net			45,537			38,319			39,973
Goodwill			11,462			11,462			11,462
Deferred income taxes			581			3,415			2,319
Long-term investments - Held-To-Maturity			31,050			-			-
Long-term investments - Rabbi Trust			4,994			3,279			4,025
Other assets			2,495			2,494			2,573
	Total assets	$	179,127			168,947			175,142
Current liabilities:
Accounts payable-trade			20,183			25,221			23,994
Accounts payable - capital expenditures			3,000			1,269			224
Accrued expenses			8,878			9,895			11,922
Income taxes payable - current			513			305			180
	Total current liabilities		32,574			36,690			36,320
Income taxes payable - long-term			3,734			3,655			3,841
Deferred income taxes			1,699			1,206			1,483
Deferred compensation			5,171			4,421			4,686
	Total liabilities		43,178			45,972			46,330
Commitments and Contingencies (Note 15)
Shareholders' equity
Preferred stock, $0.05 par value, authorized
10,000,000
Common stock, $0.05 par value, authorized
40,000,000 shares, issued and outstanding
12,311,756 at October 30, 2016; 12,350,265
at November 1, 2015; and 12,265,489 at
May 1, 2016			615			618			614
Capital contributed in excess of par value			45,349			44,708			43,795
Accumulated earnings			90,029			77,806			84,547
Accumulated other comprehensive loss			(44	)		(157	)		(144	)
Total shareholders' equity			135,949			122,975			128,812
Total liabilities and shareholders' equity		$	179,127			168,947			175,142
* Derived from audited financial statements.
See accompanying notes to consolidated financial statements.

I-3

CULP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED OCTOBER 30, 2016 AND NOVEMBER 1, 2015

UNAUDITED

(Amounts in Thousands)

	SIX MONTHS ENDED
	October 30,			November 1,
	2016			2015
Cash flows from operating activities:
Net income	$	9,789			8,471
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation		3,511			3,184
Amortization of other assets		80			86
Stock-based compensation		1,657			1,339
Excess tax benefit related to stock-based compensation		(167	)		(838	)
Deferred income taxes		2,121			2,816
Realized loss on sale of short-term investments		12			56
Loss (gain) on sale of equipment		9			(60	)
Foreign currency exchange gains		(53	)		(13	)
Changes in assets and liabilities:
Accounts receivable		4,142			4,892
Inventories		219			(4,135	)
Other current assets		751			(302	)
Other assets		-			8
Accounts payable - trade		(3,274	)		(2,921	)
Accrued expenses and deferred compensation		(2,749	)		(1,547	)
Income taxes		554			168
Net cash provided by operating activities		16,602			11,204
Cash flows from investing activities:
Capital expenditures		(6,308	)		(5,255	)
Proceeds from the sale of equipment		-			225
Proceeds from the sale of short-term investments		2,000			3,612
Purchase of short-term investments		(23	)		(46	)
Purchase of long-term investments (Held-To-Maturity)		(31,050	)		-
Purchase of long-term investments (Rabbi Trust)		(929	)		(864	)
Net cash used in investing activities		(36,310	)		(2,328	)
Cash flows from financing activities:
Proceeds from line of credit		7,000			-
Payments on line of credit		(7,000	)		-
Payments on long-term debt		-			(2,200	)
Excess tax benefit related to stock-based compensation		167			838
Dividends paid		(4,307	)		(6,417	)
Payments on debt issuance costs		(2	)		(43	)
Proceeds from common stock issued		11			126
Net cash used in financing activities		(4,131	)		(7,696	)
Effect of exchange rate changes on cash and cash equivalents		(38	)		271
(Decrease) increase in cash and cash equivalents		(23,877	)		1,451
Cash and cash equivalents at beginning of period		37,787			29,725
Cash and cash equivalents at end of period	$	13,910			31,176
See accompanying notes to consolidated financial statements.

I-4

CULP, INC.          

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY   

UNAUDITED         

(Dollars in thousands, except share data)

							Capital						Accumulated
							Contributed						Other			Total
	Common Stock						in Excess			Accumulated			Comprehensive			Shareholders'
	Shares			Amount			of Par Value			Earnings			Loss			Equity
Balance,  May 3, 2015		12,219,121		$	611			43,159			75,752			(95	)	$	119,427
Net income		-			-			-			16,935			-			16,935
Stock-based compensation		-			-			2,742			-			-			2,742
Unrealized loss on investments		-			-			-			-			(49	)		(49	)
Excess tax benefit related to stock
based compensation		-			-			841			-			-			841
Common stock repurchased		(100,776	)		(5	)		(2,392	)		-			-			(2,397	)
Common stock issued in connection
with performance based units		115,855			6			(6	)		-			-			-
Fully vested common stock award		3,000			-			-			-			-			-
Common stock issued in connection														.
with exercise of stock options		54,500			3			197			-			-			200
Common stock surrendered for
withholding taxes payable		(26,211	)		(1	)		(746	)		-			-			(747	)
Dividends paid		-			-			-			(8,140	)		-			(8,140	)
Balance,  May 1, 2016  *		12,265,489			614			43,795			84,547			(144	)		128,812
Net income		-			-			-			9,789			-			9,789
Stock-based compensation		-			-			1,657			-			-			1,657
Unrealized gain on investments		-			-			-			-			100			100
Excess tax benefit related to stock
based compensation		-			-			167			-			-			167
Common stock issued in connection
with performance based units		49,192			2			(2	)		-			-			-
Fully vested common stock award		4,800			-			-			-			-			-
Common stock issued in connection
with exercise of stock options		2,000			-			11			-			-			11
Common stock surrendered for
withholding taxes payable		(9,725	)		(1	)		(279	)		-			-			(280	)
Dividends paid		-			-			-			(4,307	)		-			(4,307	)
Balance, October 30, 2016		12,311,756		$	615			45,349			90,029			(44	)	$	135,949
*  Derived from audited financial statements.
See accompanying notes to consolidated financial statements.

I-5

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.  Basis of Presentation

The accompanying unaudited consolidated financial statements of Culp, Inc. and subsidiaries (the "company") include all adjustments, which are, in the opinion of management, necessary for fair presentation of the results of operations and financial position.  All of these adjustments are of a normal recurring nature. Results of operations for interim periods may not be indicative of future results.  The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements, which are included in the company's annual report on Form 10-K filed with the Securities and Exchange Commission on July 15, 2016, for the fiscal year ended May 1, 2016.

The company's six months ended October 30, 2016, and November 1, 2015, represent 26 week periods, respectively.

2. Significant Accounting Policies

As of October 30, 2016, there were no changes in the nature of our significant accounting policies or the application of those policies from those reported in our annual report on Form 10-K for the year ended May 1, 2016.

Recently Adopted Accounting Pronouncements

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, an amendment to FASB ASC Topic 740, which simplifies the presentation of deferred income taxes on an entity's classified balance sheet. Currently, entities that are required to issue a classified balance sheet present a net current and net noncurrent deferred income tax asset or liability for each tax jurisdiction. The amendments in this ASU require entities to offset all deferred income tax assets and liabilities for each tax jurisdiction and present a net deferred income tax asset or liability as a single noncurrent amount. The recognition and measurement guidance for deferred income tax assets and liabilities are not affected by this amendment. This amended guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted and the standard may be applied either retrospectively or on a prospective basis to all deferred income tax assets and liabilities.

We early adopted this amendment during the third quarter of fiscal 2016 on a retrospective basis. Accordingly, we reclassified our current deferred income taxes to noncurrent on our November 1, 2015 Consolidated Balance Sheet, which increased noncurrent deferred income taxes $3.0 million and decreased noncurrent deferred tax liabilities $4.7 million.

In June 2014, the Financial Accounting Standards Board ("FASB") amended its authoritative guidance on accounting for certain share-based payment awards. The amended guidance requires that share-based compensation awards with terms of a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. The guidance will permit an entity to apply the amendments in the update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the consolidated financial statements and to all new or modified awards thereafter.

I-6

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

This guidance was effective for the first quarter of fiscal 2017 and did not have any impact on our consolidated financial statements as we currently do not have any share-based payment awards with terms of a performance target that affects vesting and could be achieved after the requisite service period.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, which amends ASC Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are intended to enhance the comparability of revenue recognition practices and will be applied to all contracts with customers. Improved disclosures related to the nature, amount, timing, and uncertainty of revenue that is recognized are requirements under the amended guidance. In April 2015, the FASB issued ASU 2015-24, Revenue from Contracts with Customers: Deferral of the Effective Date which proposed a deferral of the effective date by one year, and on July 7, 2015, the FASB decided to delay the effective date by one year. The deferral results in the new revenue standard being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We are therefore required to apply the new revenue guidance in our fiscal 2019 interim and annual financial statements. This ASU can be adopted either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which changed the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016. We are therefore required to apply this guidance in our fiscal 2018 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which increases transparency and comparability among companies accounting for lease transactions. The most significant change of this update will require the recognition of lease assets and liabilities on the balance sheet for operating lease arrangements with lease terms greater than twelve months for lessees. This update will require a modified retrospective application which includes a number of optional practical expedients related to the identification and classification of leases commenced before the effective date. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018. We are therefore required to apply this guidance in our fiscal 2020 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Shares-Based Payment Accounting." ASU 2016-09 is intended to improve the accounting for share-based payment transactions as part of the FASB's simplification initiative. ASU 2016-09 changes several aspects of the accounting for share-based payment award transactions, including: (1) accounting for income taxes; (2) classification of excess tax benefits on the statement of cash flows; (3) forfeitures; (4) minimum statutory tax withholding requirements; and (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years for public companies. We are therefore required to apply this guidance in our fiscal 2018 interim and annual financial statements. We are currently assessing the impact that ASU 2016-09 will have on its consolidated financial statements.

I-7

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to address the diversity in how certain cash receipts and cash payments are presented in the statement of cash flows. This new guidance provides clarity around the cash flow classification for eight specific issues in an effort to reduce the current and potential future diversity in practice. This standard, which is to be applied retrospectively, will be effective for the first interim period within annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are therefore required to apply this new guidance in our fiscal 2019 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Than Inventory, to reduce the diversity in practice and complexity associated with accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Current GAAP prohibits recognition of deferred income taxes for an intra-entity transfer until the asset has been sold to an outside party. The new pronouncement stipulates that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, with early adoption permitted in the first interim period only. We are therefore required to apply this new guidance in our fiscal 2019 interim and annual financial statements. The amendments are to applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

There are no other new accounting pronouncements that are expected to have a significant impact on our consolidated financial statements.

3.  Stock-Based Compensation

Equity Incentive Plan Description

On September 16, 2015, our shareholders approved an equity incentive plan entitled the Culp, Inc. 2015 Equity Incentive Plan (the "2015 Plan"). The 2015 Plan updated and replaced our 2007 Equity Incentive Plan (the "2007 Plan") as the vehicle for granting new equity based awards substantially similar to those authorized under the 2007 Plan. In general, the 2015 Plan authorizes the grant of stock options intended to qualify as incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, and other equity and cash related awards as determined by our Compensation Committee. An aggregate of 1,200,000 shares of common stock were authorized for issuance under the 2015 Plan, with certain sub-limits that would apply with respect to specific types of awards that may be issued as defined in the 2015 Plan. In connection with the approval of the 2015 Plan, no further awards will be granted under the 2007 Plan, but outstanding awards under the 2007 Plan will be settled in accordance with their terms.

At October 30, 2016, there were 980,486 shares available for future equity based grants under our 2015 plan.

I-8

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Incentive Stock Option Awards

We did not grant any incentive stock option awards through the second quarter of fiscal 2017.

At October 30, 2016, options to purchase 81,600 shares of common stock were outstanding and exercisable, had a weighted average exercise price of $8.44 per share, and a weighted average contractual term of 0.8 years. At October 30, 2016, the aggregate intrinsic value for options outstanding and exercisable was $1.6 million.

The aggregate intrinsic value for options exercised for the six months ending October 30, 2016 and November 1, 2015, was $43,000 and $1.0 million, respectively.

At October 30, 2016, there were no unvested incentive stock option awards. Therefore, there was no unrecognized compensation cost related to incentive stock option awards at October 30, 2016.

No compensation expense was recorded for incentive stock options for the six months ended October 30, 2016 and November 1, 2015, respectively.

Common Stock Awards

On October 3, 2016, we granted a total of 4,800 shares of common stock to our outside directors. These shares of common stock vest immediately and were measured at $29.80 per share, which represents the closing price of our common stock at the date of grant.

On October 1, 2015, we granted a total of 3,000 shares of common stock to our outside directors. These shares of common stock vest immediately and were measured at $31.77 per share, which represents the closing price of our common stock at the date of grant.

We recorded $143,000 and $95,000 within selling, general, and administrative expense for these common stock awards for the six months ending October 30, 2016, and November 1, 2015, respectively.

Performance Based Restricted Stock Units

Fiscal 2017 Grant

On July 14, 2016, certain key members of management were granted performance-based restricted stock units which could earn up to 107,880 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $28 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

On July 14, 2016, a non-employee was granted performance-based restricted stock units which could earn up to 11,549 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreement. The fair value of this award is measured at the earlier date of when the performance criteria are met or the end of the reporting period. At October 30, 2016, this grant was unvested and was measured at $28.15 per share, which represents the closing price of our common stock at the end of the reporting period. The vesting of this award is over the requisite service period of three years.

I-9

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Fiscal 2016 Grant

On July 15, 2015, certain key members of management were granted performance-based restricted stock units which could earn up to 107,554 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $32.23 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

On July 15, 2015, a non-employee was granted performance-based restricted stock units which could earn up to 10,364 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreement. The fair value of this award is measured at the earlier date of when the performance criteria are met or the end of the reporting period. At October 30, 2016, this grant was unvested and was measured at $28.15 per share, which represents the closing price of our common stock at the end of the reporting period. The vesting of this award is over the requisite service period of three years.

Fiscal 2015 Grants

On June 24, 2014, certain key members of management were granted performance-based restricted stock units which could earn up to 102,845 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $17.70 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

On March 3, 2015, a non-employee was granted performance-based restricted stock units which could earn up to 28,000 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. The fair value of this award is measured at the earlier date of when the performance criteria are met or the end of the reporting period. At October 30, 2016, 16,000 restricted stock units associated with this grant were unvested and were measured at $28.15 per share, which represents the closing price of the company's common stock at the end of the reporting period. The vesting of these 16,000 restricted stock units vest over their requisite service period of 28 months.

During the first quarter of fiscal 2017, 12,000 shares of common stock associated with the grant vested and had a weighted average fair value of $345,000 or $28.77 per share.

2014 Grant

On June 25, 2013, certain key members of management were granted performance-based restricted stock units which could earn up to 72,380 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $17.12 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

I-10

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

During the first quarter of fiscal 2017, 37,192 shares of common stock associated with this grant vested and had a weighted average fair value of $637,000 or $17.12 per share. Our fiscal 2014 grant is fully vested.

Fiscal 2013 Grant

On July 11, 2012, certain key members of management were granted performance based restricted stock units which could earn up to 120,000 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $10.21 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

During the first quarter of fiscal 2016, 115,855 shares of common stock associated with our fiscal 2013 grant vested and had a weighted average fair value of $1.2 million or $10.21 per share. Our fiscal 2013 grant is fully vested.

Overall

We recorded compensation expense of $1.5 million and $1.2 million within selling, general, and administrative expense for our performance based restricted stock unit awards for the six month periods ending October 30, 2016 and November 1, 2015, respectively. Compensation cost is recorded based on an assessment each reporting period of the probability if certain performance goals will be met during the vesting period. If performance goals are not probable of occurrence, no compensation cost will be recognized and any recognized compensation cost would be reversed.

As of October 30, 2016, the remaining unrecognized compensation cost related to our performance based restricted stock unit awards was $5.0 million, which is expected to be recognized over a weighted average vesting period of 2.0 years.

Time Vested Restricted Stock Units

On July 14, 2016, an employee was granted 1,200 shares of time vested restricted stock units. This award was valued based on the fair market value on the date of grant. The fair value of this award was $28 per share, which represents the closing price of our common stock on the date of grant. The vesting of this award is over the requisite service period of 11 months.

We recorded compensation expense of $11,000 within selling, general, and administrative expense for our time vested restricted stock unit awards for the six months ending October 30, 2016. There were not any time vested restricted stock unit awards granted or unvested during the six months ending November 1, 2015 and, therefore, no compensation expense was recorded.

At October 30, 2016, the remaining unrecognized compensation cost related to unvested time vested restricted stock awards was $23,000, which is expected to be recognized over the next 7.5 months.

I-11

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

4.  Accounts Receivable

A summary of accounts receivable follows:

(dollars in thousands)	October 30, 2016			November 1, 2015			May 1, 2016
Customers	$	20,580		$	25,045		$	25,531
Allowance for doubtful accounts		(420	)		(826	)		(1,088	)
Reserve for returns and allowances and discounts		(1,121	)		(905	)		(962	)
	$	19,039		$	23,314		$	23,481

A summary of the activity in the allowance for doubtful accounts follows:

	Six months ended
(dollars in thousands)	October 30, 2016			November 1, 2015
Beginning balance	$	(1,088	)	$	(851	)
Provision for bad debts		216			(81	)
Net write-offs, net of recoveries		452			106
Ending balance	$	(420	)	$	(826	)

A summary of the activity in the allowance for returns and allowances and discounts accounts follows:

	Six months ended
(dollars in thousands)	October 30, 2016			November 1, 2015
Beginning balance	$	(962	)	$	(738	)
Provision for returns, allowances
and discounts		(1,620	)		(1,561	)
Credits issued		1,461			1,394
Ending balance	$	(1,121	)	$	(905	)

5.  Inventories

Inventories are carried at the lower of cost or market.  Cost is determined using the FIFO (first-in, first-out) method.

A summary of inventories follows:

(dollars in thousands)	October 30, 2016		November 1, 2015		May 1, 2016
Raw materials	$	6,128	$	6,272	$	5,462
Work-in-process		2,518		2,779		2,972
Finished goods		37,308		37,428		38,097
	$	45,954	$	46,479	$	46,531

I-12

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

6.  Other Assets

A summary of other assets follows:

(dollars in thousands)	October 30, 2016		November 1, 2015		May 1, 2016
Cash surrender value – life insurance	$	358	$	339	$	357
Non-compete agreement, net		866		941		903
Customer relationships, net		689		740		715
Other		582		474		598
	$	2,495	$	2,494	$	2,573

Non-Compete Agreement

We recorded our non-compete agreement at its fair value based on a discounted cash flow valuation model. Our non-compete agreement is amortized on a straight-line basis over the fifteen year life of the respective agreement.

The gross carrying amount of our non-compete agreement was $2.0 million at October 30, 2016, November 1, 2015 and May 1, 2016, respectively. At October 30, 2016, November 1, 2015, and May 1, 2016, accumulated amortization for our non-compete agreement was $1.2 million, $1.1 million, and $1.1 million, respectively.

Amortization expense for our non-compete agreement was $38,000 for the six month periods ended October 30, 2016 and November 1, 2015. The remaining amortization expense for the next five fiscal years and thereafter follows: FY 2017 - $37,000; FY 2018 - $75,000; FY 2019- $75,000; FY 2020 - $75,000; FY 2021 - $75,000 and Thereafter - $529,000.

The weighted average amortization period for our non-compete agreement is 11.5 years as of October 30, 2016.

Customer Relationships

We recorded our customer relationships at their fair value based on a multi-period excess earnings valuation model. Our customer relationships are amortized on a straight-line basis over its seventeen year useful life.

The gross carrying amount of our customer relationships was $868,000 at October 30, 2016, November 1, 2015, and May 1, 2016, respectively. Accumulated amortization for our customer relationships was $179,000, $128,000, and $153,000 at October 30, 2016, November 1, 2015, and May 1, 2016, respectively.

Amortization expense for our customer relationships was $26,000 for the six months ending October 30, 2016 and November 1, 2015. The remaining amortization expense for the next five fiscal years and thereafter follows: FY 2017 - $25,000; FY 2018 - $51,000; FY 2019 - $51,000; FY 2020 - $51,000; FY 2021 - $51,000; and Thereafter - $460,000.

The weighted average amortization period for our customer relationships is 13.5 years as of October 30, 2016.

Cash Surrender Value – Life Insurance

At October 30, 2016, November 1, 2015, and May 1, 2016 we had one life insurance contract with a death benefit of $1.4 million.

Our cash surrender value – life insurance balances totaling $358,000, $339,000 and $357,000 at October 30, 2016, November 1, 2015, and May 1, 2016, respectively, are collectible upon death of the respective insured.

I-13

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

7.  Accrued Expenses

A summary of accrued expenses follows:

(dollars in thousands)	October 30, 2016		November 1, 2015		May 1, 2016
Compensation, commissions and related benefits	$	7,111	$	6,657	$	10,011
Advertising rebates		734		2,536		870
Interest		5		-		-
Other accrued expenses		1,028		702		1,041
	$	8,878	$	9,895	$	11,922

8. Lines of Credit

Revolving Credit Agreement – United States

Our Credit Agreement with Wells Fargo Bank, N.A. ("Wells Fargo") provides a revolving loan commitment of $30 million. Interest was charged at a rate (applicable interest rate of 1.98% at October 30, 2016) as a variable spread over LIBOR based on our ratio of debt to EBITDA. The Credit Agreement contains certain financial and other covenants as defined in the agreement and is set to expire on August 15, 2018.

The purpose of our revolving credit line is to support potential short term cash needs in different jurisdictions within our global operations, mitigate our risk associated with foreign currency exchange rate fluctuations, and ultimately repatriate earnings and profits from our foreign subsidiaries to the U.S. for various strategic purposes.

Outstanding borrowings are secured by a pledge of 65% of the common stock of Culp International Holdings Ltd. (our subsidiary located in the Cayman Islands), as required by the Credit Agreement. There were no borrowings outstanding under the Credit Agreement at October 30, 2016, November 1, 2015, and May 1, 2016, respectively.

At October 30, 2016, November 1, 2015, and May 1, 2016, there were $250,000 in outstanding letters of credit (all of which related to workers compensation) provided by the Credit Agreement.

Effective August 1, 2016, we entered into a Third Amendment to our Credit Agreement that will allow us to issue letters of credit not to exceed $7.5 million. On August 3, 2016, we issued a $5.0 million letter of credit (all of which is currently outstanding and in addition to the $250,000 letter of credit noted above) for the construction of a new building associated with our mattress fabrics segment (see Note 15 for further details). This $5.0 million letter of credit will be automatically reduced in increments of $1.25 million on August 1, 2017, November 1, 2017, February 1, 2018, and May 15, 2018, respectively.

I-14

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Revolving Credit Agreement – China

We have an unsecured credit agreement associated with our operations in China that provides for a line of credit of up to 40 million Chinese Yuan Renminbi (approximately $5.9 million USD at October 30, 2016), that expires on March 8, 2017. This agreement has an interest rate determined by the Chinese government and there were no borrowings outstanding as of October 30, 2016, November 1, 2015, and May 1, 2016.

Overall

Our loan agreements require, among other things, that we maintain compliance with certain financial covenants. At October 30, 2016, the company was in compliance with these financial covenants.

9. Fair Value of Financial Instruments

ASC Topic 820 establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the company's assumptions (unobservable inputs). Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either level 1 or level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy. The hierarchy consists of three broad levels as follows:

Level 1 – Quoted market prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than level 1 inputs that are either directly or indirectly observable, and

Level 3 – Unobservable inputs developed using the company's estimates and assumptions, which reflect those that market participants would use.

Recurring Basis

The following table presents information about assets measured at fair value on a recurring basis:

	Fair value measurements at October 30, 2016 using:
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash and Cash Equivalents	$	23,940		N/A		N/A	$	23,940
U.S. Corporate Bonds		-		7,110		N/A		7,110
Premier Money Market Fund		4,421		N/A		N/A		4,421
Low Duration Bond Fund		1,075		N/A		N/A		1,075
Intermediate Term Bond Fund		750		N/A		N/A		750
Strategic Income Fund		605		N/A		N/A		605
Large Blend Fund		319		N/A		N/A		319
Growth Allocation Fund		102		N/A		N/A		102
Other		152		N/A		N/A		152

I-15

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

	Fair value measurements at November 1, 2015 using:
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Premier Money Market Fund	$	2,703		N/A		N/A	$	2,703
Intermediate Term Bond Fund		2,144		N/A		N/A		2,144
Low Duration Bond Fund		2,098		N/A		N/A		2,098
Limited Term Bond Fund		1,094		N/A		N/A		1,094
Strategic Income Fund		984		N/A		N/A		984
Large Blend Fund		279		N/A		N/A		279
Growth Allocation Fund		125		N/A		N/A		125
Mid Cap Value Fund		94		N/A		N/A		94
Other		78		N/A		N/A		78

	Fair value measurements at May 1, 2016 using:
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Premier Money Market Fund	$	3,404		N/A		N/A	$	3,404
Low Duration Bond Fund		1,604		N/A		N/A		1,604
Intermediate Term Bond Fund		1,154		N/A		N/A		1,154
Strategic Income Fund		999		N/A		N/A		999
Limited Term Bond Fund		602		N/A		N/A		602
Large Blend Fund		289		N/A		N/A		289
Growth Allocation Fund		148		N/A		N/A		148
Mid Cap Value Fund		102		N/A		N/A		102
Other		82		N/A		N/A		82

The determination of where an asset or liability falls in the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter based on various factors and it is possible that an asset or liability may be classified differently from quarter to quarter. However, we expect that changes in classifications between different levels will be rare.

Short-Term Investments

At October 30, 2016, November 1, 2015, and May 1, 2016, our short-term investments totaled $2.4 million, $6.3 million, and $4.4 million, respectively, and consisted of short-term bond funds. Our short-term bond funds are recorded at their fair value, are classified as available-for-sale, and their unrealized gains or losses are included in other comprehensive income (loss). Our short-term bond investments had an accumulated unrealized loss totaling $45,000, $171,000, and $100,000 at October 30, 2016, November 1, 2015, and May 1, 2016, respectively. At October 30, 2016, November 1, 2015, and May 1, 2016, the fair value of our short-term bond funds approximated its cost basis.

I-16

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Long- Term Investments - Held-To-Maturity

During the second quarter of fiscal 2017, management decided to invest approximately $31.0 million in investment grade U.S. Corporate bonds with maturities primarily ranging from 2 to 2.5 years. The purpose of this investment was to earn a higher rate of return on our excess cash located in the Cayman Islands. These investments are classified as held-to-maturity as we have the positive intent and ability to hold these investments until maturity. Our held-to-maturity investments will be recorded as either current or noncurrent on the Consolidated Balance Sheet, based on contractual maturity date and stated at amortized cost.

At October 30, 2016, our held-to-maturity investments totaling $31.0 million consisted of invested cash and cash equivalents of $23.9 million and U.S. Corporate bonds of $7.1 million. The $23.9 million in invested cash and cash equivalents were used to purchase U.S. Corporate bonds during our third quarter of fiscal 2017 (all U.S. Corporate bond purchases were completed by November 3, 2016). The fair value of our held-to-maturity investments approximates their cost basis.

Long-Term Investments - Rabbi Trust

Effective January 1, 2014, we established a Rabbi Trust to set aside funds for participants of our deferred compensation plan (the "Plan") and enable the participants to credit their contributions to various investment options of the Plan. The investments associated with the Rabbi Trust consist of a money market fund and various mutual funds that are classified as available for sale.

Our long-term investments are recorded at their fair value of $5.0 million, $3.3 million, and $4.0 million at October 30, 2016, November 1, 2015, and May 1, 2016, respectively. Our long-term investments had an accumulated unrealized gain of $1,000 and $14,000 at October 1, 2016 and November 1, 2015, respectively, and an accumulated realized loss of $44,000 at May 1, 2016. The fair value of our long-term investments associated with our Rabbi Trust approximates its cost basis.

Other

The carrying amount of cash and cash equivalents, accounts receivable, other current assets, accounts payable, and accrued expenses approximates fair value because of the short maturity of these financial instruments.

10.  Cash Flow Information

Interest and income taxes paid are as follows:

	Six months ended
(dollars in thousands)	October 30, 2016		November 1, 2015
Interest	$	45	$	86
Income taxes		3,238		2,088

Interest costs charged to operations were $45,000 and $49,000 for the six months ended October 30, 2016 and November 1, 2015, respectively.

I-17

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Interest costs of $45,000 and $49,000 for the construction of qualifying fixed assets were capitalized and will be amortized over the related assets' useful lives for the six months ended October 30, 2016 and November 1, 2015, respectively.

11.  Net Income Per Share

Basic net income per share is computed using the weighted-average number of shares outstanding during the period.  Diluted net income per share uses the weighted-average number of shares outstanding during the period plus the dilutive effect of stock-based compensation calculated using the treasury stock method.  Weighted average shares used in the computation of basic and diluted net income per share follows:

	Three months ended
(amounts in thousands)	October 30, 2016		November 1, 2015
Weighted average common shares outstanding, basic		12,308		12,343
Dilutive effect of stock-based compensation		199		141
Weighted average common shares outstanding, diluted		12,507		12,484

All options to purchase shares of common stock were included in the computation of diluted net income for the three months ended October 30, 2016 and November 1, 2015, as the exercise price of the options was less than the average market price of the common shares.

	Six months ended
(amounts in thousands)	October 30, 2016		November 1, 2015
Weighted average common shares outstanding, basic		12,297		12,310
Dilutive effect of stock-based compensation		198		171
Weighted average common shares outstanding, diluted		12,495		12,481

All options to purchase shares of common stock were included in the computation of diluted net income for the six months ended October 30, 2016 and November 1, 2015, as the exercise price of the options was less than the average market price of the common shares.

12.  Segment Information

Our operations are classified into two business segments: mattress fabrics and upholstery fabrics.  The mattress fabrics segment manufactures, sources, and sells fabrics and mattress covers to bedding manufacturers.  The upholstery fabrics segment sources, manufactures, and sells fabrics primarily to residential furniture manufacturers.

I-18

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

We evaluate the operating performance of our segments based upon income from operations before certain unallocated corporate expenses and other non-recurring items. Cost of sales in both segments include costs to manufacture or source our products, including costs such as raw material and finished goods purchases, direct and indirect labor, overhead and incoming freight charges.  Unallocated corporate expenses primarily represent compensation and benefits for certain executive officers, all costs related to being a public company, and other miscellaneous expenses.  Segment assets include assets used in the operations of each segment and primarily consist of accounts receivable, inventories, and property, plant and equipment.  The mattress fabrics segment also includes in segment assets, goodwill, a non-compete agreement, and customer relationships associated with an acquisition.

Financial information for the company's operating segments follows:

	Three months ended
(dollars in thousands)	October 30, 2016			November 1, 2015
Net sales:
Mattress Fabrics	$	45,527		$	45,436
Upholstery Fabrics		29,816			31,520
	$	75,343		$	76,956
Gross profit:
Mattress Fabrics	$	10,756		$	9,456
Upholstery Fabrics		6,145			6,277
	$	16,901		$	15,733
Selling, general, and administrative expenses:
Mattress Fabrics	$	3,296		$	2,989
Upholstery Fabrics		3,652			3,813
Total segment selling, general, and
administrative expenses		6,948			6,802
Unallocated corporate expenses		2,654			2,631
	$	9,602		$	9,433
Income from operations:
Mattress Fabrics	$	7,460		$	6,467
Upholstery Fabrics		2,493			2,464
Total segment income from operations		9,953			8,931
Unallocated corporate expenses		(2,654	)		(2,631	)
Total income from operations		7,299			6,300
Interest income		15			69
Other expense		(155	)		(225	)
Income before income taxes	$	7,159		$	6,144

I-19

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

	Six months ended
(dollars in thousands)	October 30, 2016			November 1, 2015
Net sales:
Mattress Fabrics	$	96,057		$	93,245
Upholstery Fabrics		59,969			63,896
	$	156,026		$	157,141
Gross profit:
Mattress Fabrics	$	22,657		$	19,381
Upholstery Fabrics		12,664			12,554
	$	35,321		$	31,935
Selling, general, and administrative expenses:
Mattress Fabrics	$	6,795		$	5,912
Upholstery Fabrics		7,185			7,409
Total segment selling, general, and
administrative expenses		13,980			13,321
Unallocated corporate expenses		5,368			4,854
	$	19,348		$	18,175
Income from operations:
Mattress Fabrics	$	15,862		$	13,468
Upholstery Fabrics		5,479			5,146
Total segment income from operations		21,341			18,614
Unallocated corporate expenses		(5,368	)		(4,854	)
Total income from operations		15,973			13,760
Interest income		40			112
Other expense		(307	)		(320	)
Income before income taxes	$	15,706		$	13,552

I-20

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Balance sheet information for the company's operating segments follows:

(dollars in thousands)	October 30, 2016		November 1, 2015		May 1, 2016
Segment assets:
Mattress Fabrics
Current assets (1)	$	38,062	$	40,937	$	43,472
Non-compete agreement		866		941		903
Customer relationships		689		740		715
Goodwill		11,462		11,462		11,462
Property, plant and equipment (2)		43,228		36,050		37,480
Total mattress fabrics assets		94,307		90,130		94,032
Upholstery Fabrics
Current assets (1)		26,931		28,856		26,540
Property, plant and equipment (3)		1,480		1,474		1,564
Total upholstery fabrics assets		28,411		30,330		28,104
Total segment assets		122,718		120,460		122,136
Non-segment assets:
Cash and cash equivalents		13,910		31,176		37,787
Short-term investments		2,430		6,320		4,359
Deferred income taxes		581		3,415		2,319
Income taxes receivable		-		75		155
Other current assets		1,675		2,614		2,477
Property, plant and equipment (4)		829		795		929
Long-term investments (Held-to-Maturity)		31,050		-		-
Long-term investments (Rabbi Trust)		4,994		3,279		4,025
Other assets		940		813		955
Total assets	$	179,127	$	168,947	$	175,142

	Six months ended
(dollars in thousands)	October 30, 2016		November 1, 2015
Capital expenditures (5):
Mattress Fabrics	$	8,857	$	5,138
Upholstery Fabrics		165		254
Unallocated Corporate		62		143
Total capital expenditures	$	9,084	$	5,535
Depreciation expense:
Mattress Fabrics	$	3,101	$	2,783
Upholstery Fabrics		410		401
Total depreciation expense	$	3,511	$	3,184

(1) Current assets represent accounts receivable and inventory for the respective segment.

I-21

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(2) The $43.2 million at October 30, 2016, represents property, plant, and equipment of $28.5 million and $14.7 million located in the U.S. and Canada, respectively. The $36.1 million at November 1, 2015, represents property, plant, and equipment of $23.3 million and $12.8 million located in the U.S. and Canada, respectively. The $37.5 million at May 1, 2016, represents property, plant, and equipment of $24.8 million and $12.7 million located in the U.S. and Canada, respectively.

(3) The $1.5 million at October 30, 2016, represents property, plant, and equipment of $890 and $590 located in the U.S. and China, respectively. The $1.5 million at November 1, 2015, represents property, plant, and equipment of $785 and $689 located in the U.S. and China, respectively. The $1.6 million at May 1, 2016, represents property, plant, and equipment of $893 and $671 located in the U.S. and China, respectively.

(4) The $829, $795, and $929 at October 30, 2016, November 1, 2015 and May 1, 2016, respectively, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by both the mattress and upholstery fabric segments. Property, plant, and equipment associated with corporate are located in the U.S.

(5) Capital expenditure amounts are stated on the accrual basis. See Consolidated Statements of Cash Flows for capital expenditure amounts on a cash basis.

13.  Income Taxes

Effective Income Tax Rate

We recorded income tax expense of $5.9 million, or 37.7% of income before income taxes, for the six month period ended October 30, 2016, compared to income tax expense of $5.1 million, or 37.5% of income before income taxes, for the six month period ended November 1, 2015. Our effective income tax rates for the six month periods ended October 30, 2016, and November 1, 2015, were based upon the estimated effective income tax rate applicable for the full year after giving effect to any significant items related specifically to interim periods. The effective income tax rate can be affected over the fiscal year by the mix and timing of actual earnings from our U.S. operations and foreign sources versus annual projections and changes in foreign currency exchange rates in relation to the U.S. dollar.

The following schedule summarizes the factors that are attributable to the difference between income tax expense at the federal income tax rate and the effective income tax rate reflected in the consolidated financial statements:

	2017			2016
federal income tax rate		34.0	%		34.0	%
U.S state income tax expense		0.6			0.7
tax effects of Chinese foreign exchange gains		1.6			2.3
increase in liability for uncertain tax positions		0.3			0.3
other		1.2			0.2
		37.7	%		37.5	%

I-22

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Deferred Income Taxes

Valuation Allowance

In accordance with ASC Topic 740, we evaluate our deferred income taxes to determine if a valuation allowance is required. ASC Topic 740 requires that companies assess whether a valuation allowance should be established based on the consideration of all available evidence using a "more-likely-than-not" standard, with significant weight being given to evidence that can be objectively verified. Since the company operates in multiple jurisdictions, we assess the need for a valuation allowance on a jurisdiction-by-jurisdiction basis, taking into account the effects of local tax law. Based on our assessment at October 30, 2016, we recorded a partial valuation allowance of $603,000, of which $519,000 pertained to certain U.S. state net operating loss carryforwards and credits and $84,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland.  Based on our assessment at November 1, 2015, we recorded a partial valuation allowance of $938,000, of which $561,000 pertained to certain U.S. state net operating loss carryforwards and credits and $377,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland.  Based on our assessment at May 1, 2016, we recorded a partial valuation allowance of $590,000, of which $518,000 pertained to certain U.S. state net operating loss carryforwards and credits and $72,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland.

No valuation allowance was recorded against our net deferred tax assets associated with our operations located in China and Canada at October 30, 2016, November 1, 2015, and May 1, 2016, respectively.

The recorded valuation allowance of $603,000 at October 30, 2016, has no effect on our operations, loan covenant compliance, or the possible realization of certain U.S. state net operating loss carryforwards and credits and our loss carryforwards associated with our Culp Europe operation located in Poland. If it is determined that it is more-likely-than-not that we will realize any of these deferred tax assets, an income tax benefit will be recognized at that time.

Undistributed Earnings

In accordance with ASC Topic 740, we assess whether the undistributed earnings from our foreign subsidiaries will be reinvested indefinitely or eventually distributed to our U.S. parent company. ASC Topic 740 requires that a deferred tax liability should be recorded for undistributed earnings from foreign subsidiaries that will not be reinvested indefinitely. Based on our assessment as of October 30, 2016, it is our intention not to permanently invest our undistributed earnings from our foreign subsidiaries. Also, we assess the recognition of U.S. foreign income tax credits associated with foreign withholding and income tax payments and whether it is more-likely-than-not that our foreign income tax credits will not be realized. If it is determined that any foreign income tax credits need to be recognized or it is more-likely-than-not our foreign income tax credits will not be realized, an adjustment to our provision for income taxes will be recognized at that time.

At October 30, 2016, we had accumulated earnings and profits from our foreign subsidiaries totaling $138.9 million. At the same date, the deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $657,000, which included U.S. income and foreign withholding taxes totaling $41.4 million, offset by U.S. foreign income tax credits of $40.7 million.

I-23

Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

At November 1, 2015, we had accumulated earnings and profits from our foreign subsidiaries totaling $93.2 million. At the same date, the deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $2.4 million, which included U.S. income and foreign withholding taxes totaling $35.7 million, offset by U.S. foreign income tax credits of $33.3 million.

At May 1, 2016, we had accumulated earnings and profits from our foreign subsidiaries totaling $129.6 million. At the same date, the deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $604,000, which included U.S. income and foreign withholding taxes totaling $38.5 million, offset by U.S. foreign income tax credits of $37.9 million.

Overall

At October 30, 2016, our non-current deferred tax asset of $581,000 represents $109,000 and $472,000 from our operations located in the U.S. and China, respectively. At November 1, 2015, our non-current deferred tax asset of $3.4 million represents $2.5 million and $898,000 from our operations located in the U.S. and China, respectively. At May 1, 2016, our non-current deferred tax asset of $2.3 million represents $1.7 million and $572,000 from our operations located in the U.S. and China, respectively.

Our non-current deferred tax liability balances of $1.7 million, $1.2 million, and $1.5 million at October 30, 2016, November 1, 2015, and May 1, 2016, respectively, pertain to our operations located in Canada.

Uncertainty In Income Taxes

At October 30, 2016, we had a $15.1 million total gross unrecognized income tax benefit, of which $11.4 million and $3.7 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets. At November 1, 2015, we had a $14.2 million total gross unrecognized income tax benefit, of which $10.5 million and $3.7 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets. At May 1, 2016, we had $14.9 million of total gross unrecognized income tax benefit, of which $11.1 million and $3.8 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets.

At October 30, 2016, our $15.1 million total gross unrecognized income tax benefit included $3.7 million that, if recognized, would favorably affect the income tax rate in future periods. At November 1, 2015, our $14.2 million total gross unrecognized income tax benefit, included $3.7 million that, if recognized, would favorably affect the income tax rate in future periods. At May 1, 2016, our $14.9 million total gross unrecognized income tax benefit included $3.8 million that, if recognized, would favorably affect the income tax rate in future periods.

Our gross unrecognized income tax benefit of $15.1 million at October 30, 2016,  relates to tax positions for which significant change is reasonably possible in fiscal 2017. This amount primarily relates to double taxation under applicable income tax treaties with foreign tax jurisdictions. United States federal and state income tax returns filed by us remain subject to examination for income tax years 2005 and subsequent due to loss carryforwards. Canadian federal returns remain subject to examination for income tax years 2009 and subsequent, with the statute of limitations for the 2009 income tax year expiring in January 2017. Canadian provincial (Quebec) returns  remain subject to examination for income tax years 2009 and subsequent, with the statute of limitations for the 2009 income tax year expiring in April 2017. Income tax returns associated with our operations located in China are subject to examination for income tax year 2011 and subsequent.

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Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Currently, the Internal Revenue Service is examining our U.S. Federal income tax returns for fiscal 2014 and no adjustments have been proposed at this time. We currently expect this examination to be completed by the end of our fiscal year 2017 (April 30, 2017). During the third quarter of fiscal 2017, Revenue Quebec commenced an examination of our Canadian provincial (Quebec) income tax returns for fiscal years 2013 through 2015. We currently expect this examination to be completed by the end of our first quarter of fiscal 2018 (July 30, 2017).

In accordance with ASC Topic 740, an unrecognized income tax benefit for an uncertain income tax position can be recognized in the first interim period if the more-likely-than-not recognition threshold is met by the reporting period, or is effectively settled through examination, negotiation, or litigation, or the statue of limitations for the relevant taxing authority to examine and challenge the tax position has expired. If it is determined that any of the above conditions occur regarding our uncertain income tax positions, an adjustment to our unrecognized income tax benefit will be recorded at that time.

14.  Statutory Reserves

Our subsidiaries located in China are required to transfer 10% of their net income, as determined in accordance with the People's Republic of China (PRC) accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the company's registered capital.

The transfer to this reserve must be made before distributions of any dividend to shareholders. As of October 30, 2016, the company's statutory surplus reserve was $4.6 million, representing 10% of accumulated earnings and profits determined in accordance with PRC accounting rules and regulations. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years' losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them provided that the remaining reserve balance after such issue is not less than 25% of the registered capital.

Our subsidiaries located in China can transfer funds to the parent company with the exception of the statutory surplus reserve of $4.6 million to assist with debt repayment, capital expenditures, and other expenses of the company's business.

15.   Commitments and Contingencies

Litigation

The company is involved in legal proceedings and claims which have arisen in the ordinary course of business. Management has determined that it is not reasonably possible that these actions, when ultimately concluded and settled, will have a material adverse effect upon the financial position, results of operations, or cash flows of the company.

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Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Purchase Commitments

Overall

At October 30, 2016, November 1, 2015, and May 1, 2016, we had open purchase commitments to acquire a building and equipment for our mattress fabrics segment totaling $9.8 million, $1.9 million, and $10.6 million, respectively. The $9.8 million and $10.6 million open purchase commitments as of October 30,2016 and May 1, 2016, include $6.1 million and $9.3 million associated with the construction of a new building noted below.

Construction of New Building

Effective May 16, 2016, we entered into an agreement with a contractor to construct a new building located in North Carolina that will expand our distribution capabilities and office space at a current estimated cost of $11.2 million. This agreement required an installment payment of $1.9 million in April 2016 and requires additional installment payments to be made in the following fiscal years: Fiscal 2017- $4.3 million; Fiscal 2018- $3.8 million; and Fiscal 2019- $1.2 million. Interest will be charged on the required outstanding installment payments in excess of services that have been rendered at a rate of $2.25% plus the current 30 day LIBOR rate.

Also, we were required to issue a letter of a credit totaling $5.0 million with the contractor's bank being the beneficiary. In addition to the interest that will be charged on the outstanding installment payments noted above, there will be a 0.1% unused fee calculated on the balance of the $5.0 million letter of credit less the amount outstanding per month (see Note 8 for further details).

As of October 30, 2016, we have made payments totaling $5.1 million for services rendered on the construction of this building. The remaining $6.1 million on this commitment is required to be paid on an installment basis over the next three fiscal years as follows: Fiscal 2017 - $1.1 million; Fiscal 2018 - $3.8 million; and Fiscal 2019 - $1.2 million.

The construction of this new building is currently expected to be completed in December 2016.

16.  Common Stock Repurchase Program

On June 15, 2016, we announced that our board of directors approved an authorization for us to acquire up to $5.0 million of our common stock. Under the common stock repurchase program, shares may be purchased from time to time in open market transactions, block trades, through plans established under the Securities Exchange Act Rule 10b5-1, or otherwise. The amount of shares purchased and the timing of such purchases will be based on working capital requirements, market and general business conditions, and other factors including alternative investment opportunities.

During the six months ended October 30, 2016, and November 1, 2015, we did not purchase any shares of our common stock.

At October 30, 2016, we had $5.0 million available for additional repurchases of our common stock.

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Culp, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

17.  Dividend Program

On December 1, 2016, we announced that our board of directors approved a 14% increase in our quarterly cash dividend from $0.07 to $0.08 per share. This payment will be made on January 17, 2017, to shareholders of record as of January 3, 2017.

During the first half of fiscal 2017, dividend payments totaled $4.3 million, of which $2.5 million represented a special cash dividend payment of $0.21 per share, and $1.8 million represented quarterly dividend payments of $0.07 per share.

During the first half of fiscal 2016, dividend payments totaled $6.4 million, of which $5.0 million represented a special cash dividend of $0.40 per share, and $1.4 million represented quarterly dividend payments of $0.06 per share.

Future dividend payments are subject to board approval and may be adjusted at the board's discretion as business needs or market conditions change.

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CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING INFORMATION

This report and the exhibits attached hereto contain "forward-looking statements" within the meaning of the federal securities laws, including the Private Securities Litigation Reform Act of 1995 (Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934).  Such statements are inherently subject to risks and uncertainties.  Further, forward looking statements are intended to speak only as of the date on which they are made, and we disclaim any duty to update or alter such statements, whether as a result of new information, future events or otherwise.  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 but not always characterized by qualifying words such as "expect," "believe," "estimate," "plan," "project," "anticipate," "depend" and their derivatives, and include but are not limited to statements about expectations for our future operations, production levels, sales, profit margins, operating income, capital expenditures, income taxes, SG&A or other expenses, pre-tax income, earnings, cash flow, and other performance or liquidity measures, as well as any statements regarding future economic or industry trends or future developments. 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 our 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 us adversely. Changes in consumer tastes or preferences toward products not produced by us could erode demand for our products. Changes in the value of the U.S. dollar versus other currencies can affect our financial results because a significant portion of our operations are located outside the United States. Strengthening of the U.S. dollar against other currencies could make our products less competitive on the basis of price in markets outside the United States, and strengthening of currencies in Canada and China can have a negative impact on our sales of products produced in those places. Also, economic and political instability in international areas could affect our operations or sources of goods in those areas, as well as demand for our products in international markets. Finally, increases in market prices for petrochemical products can significantly affect the prices we pay for raw materials, and in turn, increase our operating costs and decrease our profitability. Further information about these factors, as well as other factors that could affect our future operations or financial results and the matters discussed in forward-looking statements, are included in Item 1A "Risk Factors" section in our Form 10-K filed with the Securities and Exchange Commission on July 15, 2016, for the fiscal year ended May 1, 2016.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

General

Our fiscal year is the 52 or 53 week period ending on the Sunday closest to April 30. The six months ended October 30, 2016, and November 1, 2015, each represent 26-week periods. Our operations are classified into two business segments: mattress fabrics and upholstery fabrics. The mattress fabrics segment manufactures, sources and sells fabrics and mattress covers to bedding manufacturers. The upholstery fabrics segment sources, manufactures, and sells fabrics primarily to residential furniture manufacturers.

We evaluate the operating performance of our segments based upon income from operations before certain unallocated corporate expenses and other non-recurring items. Cost of sales in both segments include costs to manufacture or source our products, including costs such as raw material and finished goods purchases, direct and indirect labor, overhead and incoming freight charges. Unallocated corporate expenses represent primarily compensation and benefits for certain executive officers, all costs related to being a public company, and other miscellaneous expenses.

Executive Summary

Results of Operations

	Three Months Ended
(dollars in thousands)	October 30, 2016			November 1, 2015			Change
Net sales	$	75,343		$	76,956			(2.1)%
Gross profit		16,901			15,733			7.4%
Gross profit margin		22.4	%		20.4	%		200bp
SG&A expenses		9,602			9,433			1.8%
Income from operations		7,299			6,300			15.9%
Operating margin		9.7	%		8.2	%		150bp
Income before income taxes		7,159			6,144			16.5%
Income taxes		2,684			2,373			13.1%
Net income		4,475			3,771			18.7%

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	Six Months Ended
(dollars in thousands)	October 30, 2016			November 1, 2015			Change
Net sales	$	156,026		$	157,141			(0.7)%
Gross profit		35,321			31,935			10.6%
Gross profit margin		22.6	%		20.3	%		230bp
SG&A expenses		19,348			18,175			6.5%
Income from operations		15,973			13,760			16.1%
Operating margin		10.2	%		8.8	%		140bp
Income before income taxes		15,706			13,552			15.9%
Income taxes		5,917			5,081			16.5%
Net income		9,789			8,471			15.6%

Net Sales

Overall, net sales decreased in the second quarter and the first half of fiscal 2017 as compared with the same periods a year ago. The decrease in net sales reflects primarily softer retail demand for home furnishings. In spite of the softer retail environment, we have remained focused on our top strategic priorities of product innovation and creativity to provide a product mix that meets the demands of our customers in both our business segments. Our scalable and flexible manufacturing platform supports our strategy, and have made significant capital investments (mostly within our mattress fabrics segment) to improve our operating efficiencies and overall capacity.

Currently, we expect both overall net sales and profitability to be negatively affected in the third quarter of fiscal 2017 as compared to the same period a year earlier, due primarily to the timing of the Chinese New Year holiday, with the disruptive impact of the holiday on our upholstery fabrics business occurring in January this year as opposed to February in the prior year.

Income Before Income Taxes

Despite the decrease in net sales noted above, income before income taxes increased for the second quarter and the first half of fiscal 2017 as compared with the same periods a year ago. The increase reflects the improvement in our profitability for both business segments. We continued to realize the benefits of our recent capital investments in our mattress fabrics business, which increased capacity via newer and more efficient equipment, enhanced finishing capabilities and better overall throughput. We also benefited from lower raw material costs in both business segments and incurred lower operating expenses (primarily due to more favorable exchange rates) associated with our operations located in China. Income before income taxes for the first half of fiscal 2017 was affected by an increase in SG&A expenses, due primarily to higher incentive compensation expense reflecting stronger financial results in relation to pre-established performance targets. We also incurred higher inventory warehousing costs and design and sales expenses associated with our mattress fabrics segment. For the second quarter of fiscal 2017, SG&A expenses increased slightly compared with the second quarter of fiscal 2016.

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See the Segment Analysis section below for further details.

Liquidity

At October 30, 2016, our cash and cash equivalents, short-term investments, and long-term investments (held-to-maturity) totaled $47.4 million compared with $42.1 million at May 1, 2016. This increase from the end of fiscal 2016 was primarily due to net cash provided by our operating activities of $16.6 million, partially offset by $6.3 million in capital expenditures mostly associated with our mattress fabric segment, $4.3 million in dividend payments, and $929,000 in long-term investment purchases associated with our Rabbi Trust that is partially funding our deferred compensation plan. Our net cash provided by operating activities of $16.6 million increased $5.4 million compared with $11.2 million for the six months ending November 1, 2015. This increase is primarily due to increased earnings and improved accounts receivable and inventory management during the first half of fiscal 2017 compared to the same period a year ago.

During the second quarter of fiscal 2017, management decided to invest approximately $31.0 million in investment grade U.S. Corporate bonds with maturities primarily ranging from 2 to 2.5 years. The purpose of this investment was to earn a higher rate of return on our excess cash located in the Cayman Islands. These investments are classified as held-to-maturity as we have the positive intent and ability to hold these investments until maturity. At October 30, 2016, our held-to-maturity investments totaling $31.0 million consisted of invested cash and cash equivalents of $23.9 million and U.S. Corporate bonds of $7.1 million. The $23.9 million in invested cash and cash equivalents were used to purchase U.S. Corporate bonds during our third quarter of fiscal 2017 (all U.S. Corporate bond purchases were completed by November 3, 2016).

Currently, we do not have any borrowings outstanding under our credit agreements.  At the end of our first quarter of fiscal 2017, we had an outstanding balance of $7.0 million on our U.S. revolving line of credit.  This outstanding balance was repaid during our second quarter of fiscal 2017.

See the Liquidity section below for further details.

Dividend Program

On December 1, 2016, we announced that our board of directors approved a 14% increase in our quarterly cash dividend from $0.07 to $0.08 per share. This payment will be made on January 17, 2017, to shareholders of record as of January 3, 2017.

During the first half of fiscal 2017, dividend payments totaled $4.3 million, of which $2.5 million represented a special cash dividend payment of $0.21 per share, and $1.8 million represented quarterly dividend payments of $0.07 per share. During the first half of fiscal 2016, dividend payments totaled $6.4 million, of which $5.0 million represented a special cash dividend of $0.40 per share, and $1.4 million represented quarterly dividend payments of $0.06 per share.

Future dividend payments are subject to board approval and may be adjusted at the board’s discretion as business needs or market conditions change.

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Common Stock Repurchase Program

On June 15, 2016, we announced that our board of directors approved an authorization to acquire up to $5.0 million of our common stock. Under the common stock repurchase program, shares may be purchased from time to time in open market transactions, block trades, through plans established under the Securities Exchange Act Rule 10b5-1, or otherwise. The amount of shares purchased and the timing of such purchases will be based on working capital requirements, market and general business conditions, and other factors including alternative investment opportunities.

During the six months ended October 30, 2016, and November 1, 2015, we did not purchase any shares of our common stock.

At October 30, 2016, we had $5.0 million available for additional repurchases of our common stock.

Segment Analysis

Mattress Fabrics Segment

	Three Months Ended
(dollars in thousands)	October 30, 2016			November 1, 2015			Change
Net sales	$	45,527		$	45,346			0.2%
Gross profit		10,756			9,456			13.7%
Gross profit margin		23.6	%		20.8	%		280bp
SG&A expenses		3,296			2,989			10.3%
Income from operations		7,460			6,467			15.4%
Operating margin		16.4	%		14.2	%		220bp

	Six Months Ended
(dollars in thousands)	October 30, 2016			November 1, 2015			Change
Net sales	$	96,057		$	93,245			3.0%
Gross profit		22,657			19,381			16.9%
Gross profit margin		23.6	%		20.8	%		280bp
SG&A expenses		6,795			5,912			14.9%
Income from operations		15,862			13,468			17.8%
Operating margin		16.5	%		14.4	%		210bp

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Net Sales

Mattress fabric  net sales were almost the same for the second quarter of fiscal 2017 compared with the second quarter of fiscal 2016.  However, our net sales increased 3% for the first half of fiscal 2017 compared with the first half of fiscal 2016. Our focus on design and innovation has allowed us to offer a diverse product line across all price points and style trends. Our mattress cover business, known as CLASS, continued to perform well. CLASS allows us to design our product offerings from fabric to finished cover and expand our business with our traditional customers and also reach new market segments, especially the fast growing Internet bedding space. Our scalable and flexible manufacturing platform supports this strategy, and we have made significant capital investments to improve our operating efficiencies and overall capacity.

Gross Profit and Operating Income

Our mattress fabric gross profit and operating income increased in the second quarter and first half of fiscal 2017 compared with the same periods a year ago. These results reflect the benefits of our recent capital investments, with increased production capacity, enhanced finishing capabilities, and improved overall efficiency and throughput. Also, we benefited from lower raw material costs. Operating income was affected by an increase in SG&A expenses, due primarily to higher incentive compensation expense reflecting stronger financial results in relation to pre-established performance targets, design and sales expenses, and higher inventory warehousing costs that were primarily incurred during the first quarter.

During the first half of fiscal 2017, we continued to make capital investments to enhance our operations and improve product delivery performance. We are near completion with the latest project associated with our facilities located in North Carolina that will expand our production capacity and make major improvements to our distribution capabilities. We are planning more facility consolidation and equipment relocation to further streamline our production platform to support our continuous improvement initiatives and long-term growth strategy. This consolidation will involve relocating the knit fabric operation from our facility in High Point, NC to our expanded facility in Stokesdale, NC, approximately thirty miles away. The benefits of this move include savings in the areas of freight, labor and lease costs. Additionally, the move will improve our reactive capacity and provide our ability to substantially increase knit production. We expect this consolidation to begin in February 2017 and take approximately five months to complete. 

We are also making progress on our expansion project at our facility located in Canada, which includes new equipment installations, enhanced finishing capabilities, and a new distribution platform that will allow us to ship directly to customers located in Canada. The new distribution platform is expected to commence operations in the fourth quarter of fiscal 2017.

We are also in the final planning stages to expand our production capacity for mattress covers through a new production facility located in Haiti. This cut and sew facility, which will be a joint venture with our existing marketing joint venture partner for mattress covers, will be located in a modern industrial park on the northeast border of Haiti, which borders the Dominican Republic. This new operation, which is expected to commence production in the first half of next fiscal year, will complement our existing production capabilities with a mirrored platform and enhance our ability to meet customer demand while remaining cost competitive. Other benefits of this strategic move include the lowest labor cost in Central America and the Caribbean, and the most favorable tariff and duty rules in this hemisphere.

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Segment assets

Segment assets consist of accounts receivable, inventory, property, plant and equipment, goodwill, a non-compete agreement and customer relationships associated with an acquisition.

(dollars in thousands)	October 30, 2016		November 1, 2015		May 1, 2016
Accounts receivable and inventory	$	38,062	$	40,937	$	43,472
Property, plant & equipment		43,228		36,050		37,480
Goodwill		11,462		11,462		11,462
Non-compete agreement		866		941		903
Customer Relationships		689		740		715

Accounts Receivable & Inventory

As of October 30, 2016, accounts receivable and inventory decreased $2.9 million, or 7%, compared with November 1, 2015. This decrease is primarily due to improved cash collections on accounts receivable as customers were taking more advantage of sales discounts in the second quarter of fiscal 2017 compared with the second quarter of fiscal 2016.

As of October 30, 2016, accounts receivable and inventory decreased $5.4 million, or 12%, compared with May 1, 2016. This decrease is due to improved inventory management in the first half of fiscal 2017 and improved cash collections on accounts receivable as customers were taking more advantage of sales discounts in the second quarter of fiscal 2017 compared with the fourth quarter of fiscal 2016.

Property, Plant & Equipment

The $43.2 million at October 30, 2016, represents property, plant and equipment of $28.5 million and $14.7 million located in the U.S. and Canada, respectively. The $36.1 million at November 1, 2015, represents property, plant, and equipment of $23.3 million and $12.8 million located in the U.S. and Canada, respectively. The $37.5 million at May 1, 2016, represents property, plant, and equipment of $24.8 million and $12.7 million located in the U.S. and Canada, respectively.

As of October 30, 2016, property, plant, and equipment increased $7.1 million, or 20%, compared with November 1, 2015. This increase is primarily due to the capital investments noted above, partially offset by depreciation expense.

As of October 30, 2016, property, plant, and equipment increased $5.7 million, or 15%, compared with May 1, 2016. This increase is due to capital expenditures of $8.8 million that primarily relate to the construction of a new building (see Note 15 to the Consolidated Financial Statements for further details) and purchases and installation of machinery and equipment, partially offset by depreciation expense of $3.1 million for the first half of fiscal 2017.

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Upholstery Fabrics Segment

Net Sales

			Three Months Ended
(dollars in thousands)	October 30, 2016					November 1, 2015				% Change
Non U.S. Produced	$	27,738		93	%	$	28,568	91	%		(2.9	)%
U.S. Produced		2,078		7	%		2,952	9	%		(29.6	)%
Total	$	29,816		100	%	$	31,520	100	%		(5.4	)%

			Six Months Ended
(dollars in thousands)	October 30, 2016					November 1, 2015				% Change
Non U.S. Produced	$	55,583		93	%	$	58,522	92	%		(5.0	)%
U.S. Produced		4,386		7	%		5,374	8	%		(18.4	)%
Total	$	59,969		100	%	$	63,896	100	%		(6.1	)%

The decrease in upholstery fabric net sales reflects softer retail demand for residential furniture and our strategy to enhance both our customer and product mix to improve our profitability.

We have continued to focus on design and innovation and to offer a diverse range of products that meet changing market trends and style preferences. For example, the recent launch of our latest performance line of highly durable and stain-resistant fabrics has been well received in the market place.  Our 100% owned China platform supports our marketing efforts with the manufacturing flexibility to adapt to changing furniture market trends and consumer style preferences.

Currently, we expect both net sales and profitability in this segment to be negatively affected in the third quarter of fiscal 2017 as compared to the same period a year earlier, due primarily to the timing of the Chinese New Year holiday, with the disruptive impact of the holiday on this segment's business occurring in January this year as opposed to February in the prior year.

Gross Profit, Selling, General & Administrative Expenses, and Operating Income

	Three Months Ended
(dollars in thousands)	October 30, 2016			November 1, 2015			Change
Gross profit	$	6,145		$	6,277			(2.1	)%
Gross profit margin		20.6	%		19.9	%		70	bp
SG&A expenses		3,652			3,813			(4.2	)%
Income from operations		2,493			2,464			1.2	%
Operating margin		8.4	%		7.8	%		60	bp

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	Six Months Ended
(dollars in thousands)	October 30, 2016			November 1, 2015			Change
Gross profit	$	12,664		$	12,554			0.9	%
Gross profit margin		21.1	%		19.6	%		150	bp
SG&A expenses		7,185			7,409			(3.0	)%
Income from operations		5,479			5,146			6.5	%
Operating margin		9.1	%		8.1	%		100	bp

In spite of the softer demand for residential furniture, our gross profit and operating income remained relatively flat for the second quarter and first half of fiscal 2017 in comparison to the same periods a year ago. This trend reflects the decline in net sales noted above, offset by lower raw material costs and operating expenses due to more favorable currency exchange rates in China.

Culp Europe

At the end of the third quarter of fiscal 2015, we closed our finished goods warehouse and distribution facility located in Poznan, Poland, primarily as a result of ongoing economic weakness in Europe. We remain interested in developing business in Europe, and we are pursuing a strategy for selling upholstery fabric into this market.

Segment Assets

Segment assets consist of accounts receivable, inventory, and property, plant, and equipment.

(dollars in thousands)	October 30, 2016		November 1, 2015		May 1, 2016
Accounts receivable  and inventory	$	26,931	$	28,856	$	26,540
Property, plant & equipment		1,480		1,474		1,564

Accounts Receivable & Inventory

As of October 30, 2016, accounts receivable and inventory decreased $1.9 million, or 7%, compared with November 1, 2015. This decrease is primarily due to improved cash collections on accounts receivable as customers were taking more advantage of sales discounts in the second quarter of fiscal 2017 compared with the second quarter of fiscal 2016.

As of October 30, 2016, accounts receivable and inventory increased modestly compared with May 1, 2016,  primarily due to an increase in inventory ($1.7 million) as a result of holding higher inventory levels to better service our customers. This increase was mostly offset by a decrease in accounts receivable ($1.3 million) as a result of improved cash collections as customers were taking more advantage of sales discounts in the second quarter of fiscal 2017 compared with the fourth quarter of fiscal 2016.

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Property, Plant & Equipment

The $1.5 million at October 30, 2016, represents property, plant, and equipment of $890,000 and $590,000 located in the U.S. and China, respectively. The $1.5 million at November 1, 2015, represents property, plant, and equipment of $785,000 and $689,000 located in the U.S. and China, respectively. The $1.6 million at May 1, 2016, represents property, plant, and equipment of $893,000 and $671,000 located in the U.S. and China, respectively.

Other Income Statement Categories

	Three Months Ended
(dollars in thousands)	October 30, 2016		November 1, 2015		% Change
SG&A expenses	$	9,602	$	9,433		1.8	%
Interest expense		-		-		-
Interest income		15		69		(78.3	)%
Other expense		155		225		(31.1	)%

	Six Months Ended
(dollars in thousands)	October 30, 2016		November 1, 2015		% Change
SG&A expenses	$	19,348	$	18,175		6.5	%
Interest expense		-		-		-
Interest income		40		112		(64.3	)%
Other expense		307		320		(4.1	)%

Selling, General and Administrative Expenses

The increase in SG&A expenses for the first half of fiscal 2017 compared with the first half of fiscal 2016 was due primarily to higher incentive compensation expense reflecting stronger financial results in relation to pre-established performance targets, higher inventory warehousing costs and design and sales expenses associated with our mattress fabrics segment. For the second quarter of fiscal 2017, SG&A expenses increased slightly compared with the second quarter of fiscal 2016.

Interest Expense

Interest costs charged to operations were $36,000 and $5,000 for the three months ended October 30, 2016 and November 1, 2015, respectively. Interest costs charged to operations were $45,000 and $49,000 for the six months ended October 30, 2016 and November 1, 2015, respectively. The interest costs charged to operations were fully offset by interest costs for the construction of qualifying fixed assets that were capitalized and will be amortized over the related assets’ useful lives.

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Interest Income

Interest income decreased in the second quarter and first half of fiscal 2017 compared with the same periods a year ago. This trend reflects higher cash and cash equivalents and short-term investment balances held in U.S. dollar denominated account balances during fiscal 2017 compared with fiscal 2016. Cash and cash equivalents and short-term investment balances held in U.S. dollar denominated account balances were earning lower interest rates as compared to our cash and cash equivalents and short-term investment balances denominated in the local currency of our foreign subsidiaries.

During fiscal 2016, we implemented a strategy reducing the amount of cash we hold in Chinese Yuan Renminbi. Although this action has resulted in lower interest income, this strategy has significantly mitigated our foreign currency exchange rate exposure in China. See discussion in “Other Expense” noted below.

Currently, we expect to earn more interest income starting in the third quarter of fiscal 2017. At the end of the second quarter and beginning of the third quarter of fiscal 2017, we invested approximately $31.0 million in investment grade U.S. Corporate bonds with maturities primarily ranging from 2 to 2.5 years. The purpose of this investment was to earn a higher rate of return on our excess cash located in the Cayman Islands. See the Liquidity section below for further details.

Other Expense

The decrease in other expense in the second quarter of fiscal 2017 compared with the second quarter of fiscal 2016 is primarily due to a realized loss on the sale of short-term investments in the second quarter of fiscal 2016 that did not recur in the second quarter of fiscal 2017.

Other expenses were flat in the first half of fiscal 2017 compared with the first half of fiscal 2016.

During the first half of fiscal 2017, we did not have a foreign exchange gain or loss associated with our operations located in Canada and China compared with a foreign exchange gain of $5,000 in the first half of fiscal 2016. These results reflect our ability to mitigate the effects of foreign currency exchange rate fluctuations through the maintenance of a natural hedge by keeping a balance of assets and liabilities in foreign currencies other than the U.S. dollar. As noted above, we made a concerted effort starting in fiscal 2016 to transfer significant amounts of cash we hold in Chinese Yuan Renminbi to accounts denominated in U.S. dollars.

Income Taxes

Effective Income Tax Rate

We recorded income tax expense of $5.9 million, or 37.7% of income before income taxes, for the six month period ended October 30, 2016, compared to income tax expense of $5.1 million, or 37.5% of income before income taxes, for the six month period ended November 1, 2015. Our effective income tax rates for the six month periods ended October 30, 2016, and November 1, 2015, were based upon the estimated effective income tax rate applicable for the full year after giving effect to any significant items related specifically to interim periods. The effective income tax rate can be affected over the fiscal year by the mix and timing of actual earnings from our U.S. operations and foreign sources versus annual projections and changes in foreign currency exchange rates in relation to the U.S. dollar.

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The following schedule summarizes the factors that are attributable to the difference between income tax expense at the federal income tax rate and the effective income tax rate reflected in the consolidated financial statements:

	2017			2016
federal income tax rate		34.0	%		34.0	%
U.S state income tax expense		0.6			0.7
tax effects of Chinese foreign exchange gains		1.6			2.3
increase in liability for uncertain tax positions		0.3			0.3
other		1.2			0.2
		37.7	%		37.5	%

Deferred Income Taxes

Valuation Allowance

In accordance with ASC Topic 740, we evaluate our deferred income taxes to determine if a valuation allowance is required. ASC Topic 740 requires that companies assess whether a valuation allowance should be established based on the consideration of all available evidence using a “more-likely-than-not” standard, with significant weight being given to evidence that can be objectively verified. Since the company operates in multiple jurisdictions, we assess the need for a valuation allowance on a jurisdiction-by-jurisdiction basis, taking into account the effects of local tax law.

Refer to Note 13 located in the notes to the consolidated financial statements for disclosures regarding our assessments of our recorded valuation allowance as of October 30, 2016, November 1, 2015, and May 1, 2016, respectively.

Undistributed Earnings

In accordance with ASC Topic 740, we assess whether the undistributed earnings from our foreign subsidiaries will be reinvested indefinitely or eventually distributed to our U.S. parent company. ASC Topic 740 requires that a deferred tax liability should be recorded for undistributed earnings from foreign subsidiaries that will not be reinvested indefinitely. Also, we assess the recognition of U.S. foreign income tax credits associated with foreign withholding and income tax payments and whether it is more-likely-than-not that our foreign income tax credits will not be realized. If it is determined that any foreign income tax credits need to be recognized or it is more-likely-than-not our foreign income tax credits will not be realized, an adjustment to our provision for income taxes will be recognized at that time.

Refer to Note 13 located in the notes to the consolidated financial statements for disclosures regarding our assessments of our recorded deferred income tax liability balances associated with undistributed earnings from our foreign subsidiaries as of October 30, 2016, November 1, 2015, and May 1, 2016, respectively.

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Uncertainty In Income Taxes

At October 30, 2016, we had a $15.1 million total gross unrecognized income tax benefit that included $3.7 million, if recognized, would favorably affect the income tax rate in future periods. Our gross unrecognized income tax benefit primarily relates to double taxation under applicable income tax treaties with foreign tax jurisdictions. United States federal and state income tax returns filed by us remain subject to examination for income tax years 2005 and subsequent due to loss carryforwards. Canadian federal returns remain subject to examination for income tax years 2009 and subsequent, with the statute of limitations for the 2009 income tax year expiring in January 2017. Canadian provincial (Quebec) returns remain subject to examination for income tax years 2009 and subsequent, with the statute of limitations for the 2009 income tax year expiring in April 2017. Income tax returns associated with our operations located in China are subject to examination for income tax year 2011 and subsequent.

Currently, the Internal Revenue Service is examining our U.S. Federal income tax returns for fiscal 2014, and no adjustments have been proposed at this time. We currently expect this examination to be completed by the end of our fiscal year 2017 (April 30, 2017). During the third quarter of fiscal 2017, Revenue Quebec commenced an examination of our Canadian provincial (Quebec) income tax returns for fiscal years 2013 through 2015. We currently expect this examination to be completed by the end of our first quarter of fiscal 2018 (July 30, 2017).

In accordance with ASC Topic 740, an unrecognized income tax benefit for an uncertain income tax position can be recognized in the first interim period if the more-likely-than-not recognition threshold is met by the reporting period, or is effectively settled through examination, negotiation, or litigation, or the statue of limitations for the relevant taxing authority to examine and challenge the tax position has expired. If it is determined that any of the above conditions occur regarding our uncertain income tax positions, an adjustment to our unrecognized income tax benefit will be recorded at that time.

Income Taxes Paid

We reported income tax expense of $5.9 million and $5.1 million for the first half of fiscal 2017 and 2016, respectively. Currently, we are not paying income taxes in the United States as we have an estimated $18.0 million in operating loss carryforwards as of May 1, 2016. However, we did have income tax payments of $3.2 million and $2.1 million for the first half of fiscal 2017 and 2016, respectively. These income tax payments are associated with our subsidiaries located in China and Canada.

Liquidity and Capital Resources

Liquidity

Overall

Currently, our sources of liquidity include cash and cash equivalents, short-term investments, cash flow from operations, and amounts available under our revolving credit lines. These sources have been adequate for day-to-day operations, capital expenditures, debt payments, common stock repurchases, and dividend payments. We believe our present cash and cash equivalents and short-term investment balance of $16.3 million at October 30, 2016, cash flow from operations, and the current availability ($35.9 million as of October 30, 2016) under our revolving credit lines will be sufficient to fund our foreseeable business needs and contractual obligations.

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Our cash and cash equivalents and short-term investment balance may be adversely affected by factors beyond our control, such as lower net sales due to weakening industry demand and delays in receipt of payment on accounts receivable.

At October 30, 2016, our cash and cash equivalents, short-term investments, and long-term investments (held-to-maturity) totaled $47.4 million compared with $42.1 million at May 1, 2016. This increase from the end of fiscal 2016 was primarily due to net cash provided by our operating activities of $16.6 million, partially offset by $6.3 million in capital expenditures mostly associated with our mattress fabric segment, $4.3 million in dividend payments, and $929,000 in long-term investment purchases associated with our Rabbi Trust that is partially funding our deferred compensation plan. Our net cash provided by operating activities of $16.6 million increased $5.4 million compared with $11.2 million for the six months ending November 1, 2015. This increase is primarily due to increased earnings and improved accounts receivable and inventory management during the first half of fiscal 2017 compared to the same period a year ago.

Currently, we do not have any borrowings outstanding under our credit agreements.  At the end of our first quarter of fiscal 2017, we had an outstanding balance due of $7.0 million on our U.S. revolving line of credit.  This outstanding balance was repaid during our second quarter of fiscal 2017.

By Geographic Area

We currently hold cash and cash equivalents, short-term investments, and long-term investments (held-to-maturity) in the U.S. and our foreign jurisdictions to support our operational requirements, mitigate our risk to foreign exchange rate fluctuations, and U.S. and foreign income tax planning purposes.

A summary of our cash and cash equivalents, short-term investments, and long-term investments (held-to-maturity) by geographic area follows:

(dollars in thousands)	October 30, 2016		November 1, 2015		May 1, 2016
Cayman Islands	$	36,100	$	8,591	$	25,762
China		6,766		18,690		8,454
Canada		4,513		8,856		6,844
United States		11		1,359		1,086
	$	47,390	$	37,496	$	42,146

We have had a significant shift from cash and cash equivalents and investments held in China to the Cayman Islands. Since April 2016 through the end of our second quarter of fiscal 2017, we distributed earnings and profits totaling $39.2 million from our subsidiaries located in China to our international holding company located in the Cayman Islands. This shift was primarily due to our strategy of mitigating our risk to foreign exchange rate fluctuations for assets and liabilities denominated in Chinese Yuan Renminbi. By reducing the amount of cash and cash equivalents held in Chinese Yuan Renminbi, we are able to obtain a better balance of assets and liabilities denominated in Chinese Yuan Renminbi, and therefore mitigate the risk of foreign currency exchange rate fluctuations in China. In addition, by transferring earnings and profits from China to the Cayman Islands, it provides increased flexibility to ultimately repatriate these earnings and profits to the U.S. for various strategic purposes. Currently, we do not intend to repatriate any earnings and profits to the U.S. until after our U.S. loss carryforwards are fully utilized, which we expect in two to three more years.

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During the second quarter of fiscal 2017, management decided to invest approximately $31.0 million in investment grade U.S. Corporate bonds with maturities primarily ranging  from 2 to 2.5 years. The purpose of this investment was to earn a higher rate of return on our excess cash located in the Cayman Islands. These investments are classified as held-to-maturity as we have the positive intent and ability to hold these investments until maturity. At October 30, 2016, our held-to-maturity investments totaling $31.0 million consisted of invested cash and cash equivalents of $23.9 million and U.S. Corporate bonds of $7.1 million. The $23.9 million in invested cash and cash equivalents were used to purchase U.S. Corporate bonds during our third quarter of fiscal 2017 (all U.S. Corporate bond purchases were completed by November 3, 2016). The fair value of our held-to-maturity investments approximates their cost basis.

Dividend Program

On December 1, 2016, we announced that our board of directors approved a 14% increase in our quarterly cash dividend from $0.07 to $0.08 per share. This payment will be made on January 17, 2017 to shareholders of record as of January 3, 2017.

During the first half of fiscal 2017, dividend payments totaled $4.3 million, of which $2.5 million represented a special cash dividend payment of $0.21 per share, and $1.8 million represented quarterly dividend payments of $0.07 per share. During the first half of fiscal 2016, dividend payments totaled $6.4 million, of which $5.0 million represented a special cash dividend of $0.40 per share, and $1.4 million represented quarterly dividend payments of $0.06 per share.

Future dividend payments are subject to board approval and may be adjusted at the board’s discretion as business needs or market conditions change.

Common Stock Repurchase Program

On June 15, 2016, we announced that our board of directors approved an authorization for us to acquire up to $5.0 million of our common stock. Under the common stock repurchase program, shares may be purchased from time to time in open market transactions, block trades, through plans established under the Securities Exchange Act Rule 10b5-1, or otherwise. The amount of shares purchased and the timing of such purchases will be based on working capital requirements, market and general business conditions, and other factors including alternative investment opportunities.

During the six months ended October 30, 2016, and November 1, 2015, we did not purchase any shares of our common stock.

At October 30, 2016, we had $5.0 million available for additional repurchases of our common stock.

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Working Capital

Accounts receivable at October 30, 2016, were $19.0 million, a decrease of $4.3 million, or 18%, compared with $23.3 million at November 1, 2015. This decrease is primarily due to improved cash collections as customers were taking more advantage of sales discounts in the second quarter of fiscal 2017 compared with the second quarter of fiscal 2016. Days’ sales outstanding were 23 days for the second quarter of fiscal 2017 compared with 28 days for the second quarter of fiscal 2016.

Inventories as of October 30, 2016, were $46.0 million compared with $46.5 million at November 1, 2015. Inventory turns were 5.2 for the second quarter of fiscal 2017 compared with 5.3 for the second quarter of fiscal 2016.

Accounts payable-trade as of October 30, 2016, were $20.2 million, a decrease of $5.0 million, or 20%, compared with $25.2 million at November 1, 2015.  This decrease is primarily due to the decrease in net sales and the timing of payments to suppliers during the second quarter of fiscal 2017 compared with the second quarter of fiscal 2016.

Operating working capital (accounts receivable and inventories, less accounts payable-trade and accounts payable-capital expenditures) was $41.8 million at October 30, 2016, compared with $43.3 million at November 1, 2015. Operating working capital turnover was 7.0 during the second quarter of fiscal 2017 compared with 7.7 during the second quarter of fiscal 2016.

Financing Arrangements

Currently, we have revolving credit agreements with banks for our U.S parent company and our operations located in China. The purpose of our revolving lines of credit are to support potential short term cash needs in different jurisdictions, mitigate our risk associated with foreign currency exchange rate fluctuations, and ultimately repatriate earnings and profits from our foreign subsidiaries to the U.S. for various strategic purposes. Our revolving credit agreements require us to maintain compliance with certain financial covenants as defined in the respective agreements. At October 30, 2016, we were in compliance with all our financial covenants.

Refer to Note 8 located in the notes to the consolidated financial statements for further details of our revolving credit agreements.

Capital Expenditures and Depreciation

Overall

Capital expenditures on a cash basis were $6.3 million for the first half for fiscal 2017 compared with $5.3 million for the same period a year ago. Capital expenditures for the first half of fiscal 2017 and 2016 mostly related to our mattress fabrics segment.

Depreciation expense was $3.5 million for the first half of fiscal 2017 compared with $3.2 million for the first half of fiscal 2016. Depreciation expense for the first half of fiscal 2017 and 2016 mostly related to the mattress fabrics segment.

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For fiscal 2017, we are projecting capital expenditures for the company as a whole to be approximately $12.0 million. Depreciation expense for the company as a whole is projected to be approximately $7.0 million in fiscal 2017. The estimated capital expenditures and depreciation expense mostly relate to the mattress fabrics segment. These are management’s current expectations only, and changes in our business needs could cause changes in plans for capital expenditures and expectations for related depreciation expense.

Accounts Payable – Capital Expenditures

At October 30, 2016, we had total amounts due regarding capital expenditures totaling $3.0 million, in which $1.5 million is financed and pertains to the construction of a new building (see below). The total amount due of $3.0 million is required to be paid within one year from the end of our second quarter of fiscal 2017.

Purchase Commitments – Capital Expenditures

At October 30, 2016, we had open purchase commitments to acquire a building and equipment for our mattress fabrics segment totaling $9.8 million. The $9.8 million as of October 30, 2016, includes $6.1 million associated with the construction of a new building noted below.

Effective May 16, 2016, we entered into an agreement with a contractor to construct a new building located in North Carolina that will expand our distribution capabilities and office space at a current estimated cost of $11.2 million. This agreement required an installment payment of $1.9 million in April 2016 and requires additional installment payments to be made in the following fiscal years: Fiscal 2017- $4.3 million; Fiscal 2018- $3.8 million; and Fiscal 2019- $1.2 million. Interest will be charged on the required outstanding installment payments in excess of services that have been rendered at a rate of $2.25% plus the current 30 day LIBOR rate.

Also, we were required to issue a letter of a credit totaling $5.0 million with the contractor’s bank being the beneficiary. In addition to the interest that will be charged on the outstanding installment payments noted above, there will be a 0.1% unused fee calculated on the balance of the $5.0 million letter of credit less the amount outstanding per month (see Note 8 for further details).

As of October 30, 2016, we have made payments totaling $5.1 million for services rendered on the construction of this building. The remaining $6.1 million on this commitment is required to be paid on an installment basis over the next three fiscal years as follows: Fiscal 2017 - $1.1 million; Fiscal 2018 - $3.8 million; and Fiscal 2019 - $1.2 million.

The construction of this new building is currently expected to be completed in December 2016.

Critical Accounting Policies and Recent Accounting Developments

At October 30, 2016, there were no changes in the nature of our significant accounting policies or the application of those policies from those reported in our annual report on Form 10-K for the year ended May 1, 2016.

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Refer to Note 2 located in the notes to the consolidated financial statements for recently adopted and issued accounting pronouncements since the filing of our Form 10-K for the year ended May 1, 2016.

Contractual Obligations

As of October 30, 2016, there were no significant or new contractual obligations from those reported in our annual report on Form 10-K for the year ended May 1, 2016.

Inflation

Any significant increase in our raw material costs, utility/energy costs and general economic inflation could have a material adverse impact on the company, because competitive conditions have limited our ability to pass significant operating increases on to customers.

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ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to market risk from changes in interest rates on our revolving credit lines.

At October 30, 2016, our U.S. revolving credit agreement requires interest to be charged at a rate (applicable interest rate of 1.98% at October 30, 2016) as a variable spread over LIBOR based on our ratio of debt to EBITDA as defined in the agreement. Our revolving credit line associated with our China subsidiaries bears interest at a rate determined by the Chinese government. At October 30, 2016, there were no borrowings outstanding under any of our revolving credit lines.

We are exposed to market risk from changes in the value of foreign currencies for our subsidiaries domiciled in Canada and China. We try to maintain a natural hedge by keeping a balance of our assets and liabilities denominated in the local currency of our subsidiaries domiciled in Canada and China, although there is no assurance that we will be able to continually maintain this natural hedge. Our foreign subsidiaries use the United States dollar as their functional currency. A substantial portion of the company’s imports purchased outside the United States are denominated in U.S. dollars. A 10% change in the above exchange rates at October 30, 2016, would not have had a significant impact on our results of operations or financial position.

ITEM 4.  CONTROLS AND PROCEDURES

We have conducted an evaluation of the effectiveness of our disclosure controls and procedures as of October 30, 2016, the end of the period covered by this report. This evaluation was conducted under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, we have concluded that these disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports filed by us and submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized, and reported as and when required. Further, we concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed in reports filed by us under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, in a manner to allow timely decisions regarding the required disclosures.

There has been no change in our internal control over financial reporting that occurred during the quarter ended October 30, 2016, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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Part II – Other Information

Item 1. Legal Proceedings

There have not been any material changes to our legal proceedings during the six months ended October 30, 2016. Our legal proceedings are disclosed in the company’s annual report on Form 10-K filed with the Securities and Exchange Commission on July 15, 2016 for the fiscal year ended May 1, 2016.

Item 1A.  Risk Factors

There have not been any material changes to our risk factors during the six months ended October 30, 2016. Our risk factors are disclosed in the company’s annual report on Form 10-K filed with the Securities and Exchange Commission on July 15, 2016 for the fiscal year ended May 1, 2016.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

ISSUER PURCHASES OF EQUITY SECURITIES

Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share	(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (1)
August 1, 2016  to September 4, 2016	-	-	-	$ 5,000,000
September 5, 2016  to October 2, 2016	-	-	-	$ 5,000,000
October 3, 2016 to October 30, 2016	-	-	-	$ 5,000,000
Total	-	-	-	$ 5,000,000

(1) On June 15, 2016, we announced that our board of directors increased the authorization for us to acquire up to $5.0 million of our common stock.

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Item 6.  Exhibits

The following exhibits are submitted as part of this report.

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 July 28, 2002, filed September 11, 2002 (Commission File No. 001-12597), and incorporated herein by reference.

3 (ii) Restated and Amended Bylaws of the company, as amended November 12, 2007, were filed as Exhibit 3.1 to the company’s Form 8-K dated November 12, 2007 (Commission File No. 001-12597), and incorporated herein by reference.

10.1 Written description of non-employee director compensation.

31.1 Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

32.1 Certification of Chief Executive Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

32.2 Certification of Chief Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		CULP, INC.
		(Registrant)
Date: December 9, 2016	By:	/s/ Kenneth R. Bowling
		Kenneth R. Bowling
		Vice President and Chief Financial Officer
		(Authorized to sign on behalf of the registrant
		and also signing as principal financial officer)
	By:	/s/ Thomas B. Gallagher, Jr.
		Thomas B. Gallagher, Jr.
		Corporate Controller
		(Authorized to sign on behalf of the registrant
		and also signing as principal accounting officer)

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EXHIBIT INDEX

Exhibit NumberExhibit

10.1 Written description of non-employee director compensation.

31.1 Certification of Chief Executive Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

31.2 Certification of Chief Financial Officer Pursuant to Section 302 of Sarbanes-Oxley Act of 2002.

32.1 Certification of Chief Executive Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

32.2 Certification of Chief Financial Officer Pursuant to Section 906 of Sarbanes-Oxley Act of 2002.

101.INS XBRL Instance Document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

EX-10.1

Exhibit 10.1

Written Description of Non-Employee Director Compensation

Each non-employee director is paid an annual retainer of $50,000 (except the Lead Director, who receives a $55,000 retainer), plus an annual grant of 1,200 shares of the Company’s common stock.  The stock is granted under the Company’s 2015 Equity Incentive Plan.

EX-31.1

Exhibit 31.1

CERTIFICATIONS

I, Franklin N. Saxon, certify that:

1. I have reviewed this Form 10-Q of Culp, Inc.;  

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;  

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;  

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:  

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;  

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;  

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and  

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and  

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):  

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and  

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Franklin N. Saxon
	Franklin N. Saxon
	President and Chief Executive Officer
	(Principal Executive Officer)
Date: December 9, 2016

EX-31.2

Exhibit 31.2

CERTIFICATIONS

I, Kenneth R. Bowling, certify that:

1. I have reviewed this Form 10-Q of Culp, Inc.;  

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;  

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;  

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:  

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;  

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;  

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and  

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and  

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):  

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and  

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ Kenneth R. Bowling
	Kenneth R. Bowling
	Vice President and Chief Financial Officer
	(Principal Financial Officer)
Date: December 9, 2016

EX-32.1

Exhibit 32.1

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Culp, Inc. (the “Company”) on Form 10-Q for the period ended October 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Franklin N. Saxon, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Franklin N. Saxon

Franklin N. Saxon

President and Chief Executive Officer

December 9, 2016

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 has been provided to Culp, Inc. and will be retained by Culp, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Culp, Inc. (the “Company”) on Form 10-Q for the period ended October 30, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kenneth R. Bowling, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

(1)  The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)  The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Kenneth R. Bowling

Kenneth R. Bowling

Vice President and Chief Financial Officer

December 9, 2016

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906 has been provided to Culp, Inc. and will be retained by Culp, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

XML

Document and Entity Information	6 Months Ended
	Oct. 30, 2016 shares
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Oct. 30, 2016
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q2
Trading Symbol	CFI
Entity Registrant Name	CULP INC
Entity Central Index Key	0000723603
Current Fiscal Year End Date	--04-30
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding	12,311,756

XML

CONSOLIDATED STATEMENTS OF NET INCOME (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Oct. 30, 2016	Nov. 01, 2015	Oct. 30, 2016	Nov. 01, 2015
Income Statement [Abstract]
Net sales	$ 75,343	$ 76,956	$ 156,026	$ 157,141
Cost of sales	58,442	61,223	120,705	125,206
Gross profit	16,901	15,733	35,321	31,935
Selling, general and administrative expenses	9,602	9,433	19,348	18,175
Income from operations	7,299	6,300	15,973	13,760
Interest income	(15)	(69)	(40)	(112)
Other expense	155	225	307	320
Income before income taxes	7,159	6,144	15,706	13,552
Income taxes	2,684	2,373	5,917	5,081
Net income	$ 4,475	$ 3,771	$ 9,789	$ 8,471
Net income per share, basic	$ 0.36	$ 0.31	$ 0.80	$ 0.69
Net income per share, diluted	$ 0.36	$ 0.30	$ 0.78	$ 0.68
Average shares outstanding, basic	12,308	12,343	12,297	12,310
Average shares outstanding, diluted	12,507	12,484	12,495	12,481

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Oct. 30, 2016	Nov. 01, 2015	Oct. 30, 2016	Nov. 01, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 4,475	$ 3,771	$ 9,789	$ 8,471
Unrealized gains (losses) on investments
Unrealized holding gains (losses) on investments	4	(29)	88	(118)
Reclassification adjustment for realized loss included in net income		56	12	56
Total other comprehensive income (loss)	4	27	100	(62)
Comprehensive income	$ 4,479	$ 3,798	$ 9,889	$ 8,409

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CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Oct. 30, 2016	May 01, 2016	[1]	Nov. 01, 2015
Current assets:
Cash and cash equivalents	$ 13,910	$ 37,787		$ 31,176
Short-term investments	2,430	4,359		6,320
Accounts receivable, net	19,039	23,481		23,314
Inventories	45,954	46,531		46,479
Income taxes receivable		155		75
Other current assets	1,675	2,477		2,614
Total current assets	83,008	114,790		109,978
Property, plant and equipment, net	45,537	39,973		38,319
Goodwill	11,462	11,462		11,462
Deferred income taxes	581	2,319		3,415
Long-term investments - Held-To-Maturity	31,050
Long-term investments - Rabbi Trust	4,994	4,025		3,279
Other assets	2,495	2,573		2,494
Total assets	179,127	175,142		168,947
Current liabilities:
Accounts payable-trade	20,183	23,994		25,221
Accounts payable - capital expenditures	3,000	224		1,269
Accrued expenses	8,878	11,922		9,895
Income taxes payable - current	513	180		305
Total current liabilities	32,574	36,320		36,690
Income taxes payable - long-term	3,734	3,841		3,655
Deferred income taxes	1,699	1,483		1,206
Deferred compensation	5,171	4,686		4,421
Total liabilities	43,178	46,330		45,972
Commitments and Contingencies (Note 15)
Shareholders' equity
Preferred stock, $0.05 par value, authorized 10,000,000
Common stock, $0.05 par value, authorized 40,000,000 shares, issued and outstanding 12,311,756 at October 30, 2016; 12,350,265 at November 1, 2015; and 12,265,489 at May 1, 2016	615	614		618
Capital contributed in excess of par value	45,349	43,795		44,708
Accumulated earnings	90,029	84,547		77,806
Accumulated other comprehensive loss	(44)	(144)		(157)
Total shareholders' equity	135,949	128,812		122,975
Total liabilities and shareholders' equity	$ 179,127	$ 175,142		$ 168,947

[1] Derived from audited financial statements.

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CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Oct. 30, 2016	May 01, 2016	[1]	Nov. 01, 2015
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.05	$ 0.05		$ 0.05
Preferred stock, authorized shares	10,000,000	10,000,000		10,000,000
Common stock, par value	$ 0.05	$ 0.05		$ 0.05
Common stock, authorized shares	40,000,000	40,000,000		40,000,000
Common stock, issued	12,311,756	12,265,489		12,350,265
Common stock, outstanding	12,311,756	12,265,489		12,350,265

[1] Derived from audited financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Oct. 30, 2016		Nov. 01, 2015
Cash flows from operating activities:
Net income	$ 9,789		$ 8,471
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	3,511		3,184
Amortization of other assets	80		86
Stock-based compensation	1,657		1,339
Excess tax benefit related to stock-based compensation	(167)		(838)
Deferred income taxes	2,121		2,816
Realized loss on sale of short-term investments	12		56
Loss (gain) on sale of equipment	9		(60)
Foreign currency exchange gains	(53)		(13)
Changes in assets and liabilities:
Accounts receivable	4,142		4,892
Inventories	219		(4,135)
Other current assets	751		(302)
Other assets			8
Accounts payable - trade	(3,274)		(2,921)
Accrued expenses and deferred compensation	(2,749)		(1,547)
Income taxes	554		168
Net cash provided by operating activities	16,602		11,204
Cash flows from investing activities:
Capital expenditures	(6,308)		(5,255)
Proceeds from the sale of equipment			225
Proceeds from the sale of short-term investments	2,000		3,612
Purchase of short-term investments	(23)		(46)
Purchase of long-term investments (Held-To-Maturity)	(31,050)
Purchase of long-term investments (Rabbi Trust)	(929)		(864)
Net cash used in investing activities	(36,310)		(2,328)
Cash flows from financing activities:
Proceeds from line of credit	7,000
Payments on line of credit	(7,000)
Payments on long-term debt			(2,200)
Excess tax benefit related to stock-based compensation	167		838
Dividends paid	(4,307)		(6,417)
Payments on debt issuance costs	(2)		(43)
Proceeds from common stock issued	11		126
Net cash used in financing activities	(4,131)		(7,696)
Effect of exchange rate changes on cash and cash equivalents	(38)		271
(Decrease) increase in cash and cash equivalents	(23,877)		1,451
Cash and cash equivalents at beginning of period	37,787	[1]	29,725
Cash and cash equivalents at end of period	$ 13,910		$ 31,176

[1] Derived from audited financial statements.

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands		Total	Common Stock	Capital Contributed in Excess of Par Value	Accumulated Earnings	Accumulated Other Comprehensive Loss
Balance at May. 03, 2015		$ 119,427	$ 611	$ 43,159	$ 75,752	$ (95)
Balance (in shares) at May. 03, 2015			12,219,121
Net income		8,471
Unrealized gain (loss) on investments		(62)
Balance at Nov. 01, 2015		122,975
Balance at May. 03, 2015		119,427	$ 611	43,159	75,752	(95)
Balance (in shares) at May. 03, 2015			12,219,121
Net income		16,935			16,935
Stock-based compensation		2,742		2,742
Unrealized gain (loss) on investments		(49)				(49)
Excess tax benefit related to stock based compensation		841		841
Common stock repurchased		(2,397)	$ (5)	(2,392)
Common stock repurchased (in shares)			(100,776)
Common stock issued in connection with performance based units (in shares)			115,855
Common stock issued in connection with performance based units			$ 6	(6)
Fully vested common stock award			3,000
Common stock issued in connection with exercise of stock options (in shares)			54,500
Common stock issued in connection with exercise of stock options		200	$ 3	197
Common stock surrendered for withholding taxes payable		(747)	$ (1)	(746)
Common stock surrendered for withholding taxes payable (in shares)			(26,211)
Dividends paid		(8,140)			(8,140)
Balance at May. 01, 2016	[1]	128,812	$ 614	43,795	84,547	(144)
Balance (in shares) at May. 01, 2016	[1]		12,265,489
Net income		9,789			9,789
Stock-based compensation		1,657		1,657
Unrealized gain (loss) on investments		100				100
Excess tax benefit related to stock based compensation		167		167
Common stock issued in connection with performance based units (in shares)			49,192
Common stock issued in connection with performance based units			$ 2	(2)
Fully vested common stock award			4,800
Common stock issued in connection with exercise of stock options (in shares)			2,000
Common stock issued in connection with exercise of stock options		11		11
Common stock surrendered for withholding taxes payable		(280)	$ (1)	(279)
Common stock surrendered for withholding taxes payable (in shares)			(9,725)
Dividends paid		(4,307)			(4,307)
Balance at Oct. 30, 2016		$ 135,949	$ 615	$ 45,349	$ 90,029	$ (44)
Balance (in shares) at Oct. 30, 2016			12,311,756

[1] Derived from audited financial statements.

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Basis of Presentation

6 Months Ended

Oct. 30, 2016

Accounting Policies [Abstract]

Basis of Presentation

1.  Basis of Presentation

The accompanying unaudited consolidated financial statements of Culp, Inc. and subsidiaries (the "company") include all adjustments, which are, in the opinion of management, necessary for fair presentation of the results of operations and financial position.  All of these adjustments are of a normal recurring nature. Results of operations for interim periods may not be indicative of future results.  The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements, which are included in the company's annual report on Form 10-K filed with the Securities and Exchange Commission on July 15, 2016, for the fiscal year ended May 1, 2016.

The company's six months ended October 30, 2016, and November 1, 2015, represent 26 week periods, respectively.

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Significant Accounting Policies

6 Months Ended

Oct. 30, 2016

Accounting Policies [Abstract]

Significant Accounting Policies

2. Significant Accounting Policies

As of October 30, 2016, there were no changes in the nature of our significant accounting policies or the application of those policies from those reported in our annual report on Form 10-K for the year ended May 1, 2016.

Recently Adopted Accounting Pronouncements

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, an amendment to FASB ASC Topic 740, which simplifies the presentation of deferred income taxes on an entity's classified balance sheet. Currently, entities that are required to issue a classified balance sheet present a net current and net noncurrent deferred income tax asset or liability for each tax jurisdiction. The amendments in this ASU require entities to offset all deferred income tax assets and liabilities for each tax jurisdiction and present a net deferred income tax asset or liability as a single noncurrent amount. The recognition and measurement guidance for deferred income tax assets and liabilities are not affected by this amendment. This amended guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted and the standard may be applied either retrospectively or on a prospective basis to all deferred income tax assets and liabilities.

We early adopted this amendment during the third quarter of fiscal 2016 on a retrospective basis. Accordingly, we reclassified our current deferred income taxes to noncurrent on our November 1, 2015 Consolidated Balance Sheet, which increased noncurrent deferred income taxes $3.0 million and decreased noncurrent deferred tax liabilities $4.7 million.

In June 2014, the Financial Accounting Standards Board ("FASB") amended its authoritative guidance on accounting for certain share-based payment awards. The amended guidance requires that share-based compensation awards with terms of a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. The guidance will permit an entity to apply the amendments in the update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the consolidated financial statements and to all new or modified awards thereafter.

This guidance was effective for the first quarter of fiscal 2017 and did not have any impact on our consolidated financial statements as we currently do not have any share-based payment awards with terms of a performance target that affects vesting and could be achieved after the requisite service period.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, which amends ASC Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are intended to enhance the comparability of revenue recognition practices and will be applied to all contracts with customers. Improved disclosures related to the nature, amount, timing, and uncertainty of revenue that is recognized are requirements under the amended guidance. In April 2015, the FASB issued ASU 2015-24, Revenue from Contracts with Customers: Deferral of the Effective Date which proposed a deferral of the effective date by one year, and on July 7, 2015, the FASB decided to delay the effective date by one year. The deferral results in the new revenue standard being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We are therefore required to apply the new revenue guidance in our fiscal 2019 interim and annual financial statements. This ASU can be adopted either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which changed the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016. We are therefore required to apply this guidance in our fiscal 2018 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which increases transparency and comparability among companies accounting for lease transactions. The most significant change of this update will require the recognition of lease assets and liabilities on the balance sheet for operating lease arrangements with lease terms greater than twelve months for lessees. This update will require a modified retrospective application which includes a number of optional practical expedients related to the identification and classification of leases commenced before the effective date. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018. We are therefore required to apply this guidance in our fiscal 2020 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Shares-Based Payment Accounting." ASU 2016-09 is intended to improve the accounting for share-based payment transactions as part of the FASB's simplification initiative. ASU 2016-09 changes several aspects of the accounting for share-based payment award transactions, including: (1) accounting for income taxes; (2) classification of excess tax benefits on the statement of cash flows; (3) forfeitures; (4) minimum statutory tax withholding requirements; and (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years for public companies. We are therefore required to apply this guidance in our fiscal 2018 interim and annual financial statements. We are currently assessing the impact that ASU 2016-09 will have on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to address the diversity in how certain cash receipts and cash payments are presented in the statement of cash flows. This new guidance provides clarity around the cash flow classification for eight specific issues in an effort to reduce the current and potential future diversity in practice. This standard, which is to be applied retrospectively, will be effective for the first interim period within annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are therefore required to apply this new guidance in our fiscal 2019 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Than Inventory, to reduce the diversity in practice and complexity associated with accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Current GAAP prohibits recognition of deferred income taxes for an intra-entity transfer until the asset has been sold to an outside party. The new pronouncement stipulates that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, with early adoption permitted in the first interim period only. We are therefore required to apply this new guidance in our fiscal 2019 interim and annual financial statements. The amendments are to applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

There are no other new accounting pronouncements that are expected to have a significant impact on our consolidated financial statements.

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Stock-Based Compensation

6 Months Ended

Oct. 30, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-Based Compensation

3.  Stock-Based Compensation

Equity Incentive Plan Description

On September 16, 2015, our shareholders approved an equity incentive plan entitled the Culp, Inc. 2015 Equity Incentive Plan (the "2015 Plan"). The 2015 Plan updated and replaced our 2007 Equity Incentive Plan (the "2007 Plan") as the vehicle for granting new equity based awards substantially similar to those authorized under the 2007 Plan. In general, the 2015 Plan authorizes the grant of stock options intended to qualify as incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, performance units, and other equity and cash related awards as determined by our Compensation Committee. An aggregate of 1,200,000 shares of common stock were authorized for issuance under the 2015 Plan, with certain sub-limits that would apply with respect to specific types of awards that may be issued as defined in the 2015 Plan. In connection with the approval of the 2015 Plan, no further awards will be granted under the 2007 Plan, but outstanding awards under the 2007 Plan will be settled in accordance with their terms.

At October 30, 2016, there were 980,486 shares available for future equity based grants under our 2015 plan.

Incentive Stock Option Awards

We did not grant any incentive stock option awards through the second quarter of fiscal 2017.

At October 30, 2016, options to purchase 81,600 shares of common stock were outstanding and exercisable, had a weighted average exercise price of $8.44 per share, and a weighted average contractual term of 0.8 years. At October 30, 2016, the aggregate intrinsic value for options outstanding and exercisable was $1.6 million.

The aggregate intrinsic value for options exercised for the six months ending October 30, 2016 and November 1, 2015, was $43,000 and $1.0 million, respectively.

At October 30, 2016, there were no unvested incentive stock option awards. Therefore, there was no unrecognized compensation cost related to incentive stock option awards at October 30, 2016.

No compensation expense was recorded for incentive stock options for the six months ended October 30, 2016 and November 1, 2015, respectively.

Common Stock Awards

On October 3, 2016, we granted a total of 4,800 shares of common stock to our outside directors. These shares of common stock vest immediately and were measured at $29.80 per share, which represents the closing price of our common stock at the date of grant.

On October 1, 2015, we granted a total of 3,000 shares of common stock to our outside directors. These shares of common stock vest immediately and were measured at $31.77 per share, which represents the closing price of our common stock at the date of grant.

We recorded $143,000 and $95,000 within selling, general, and administrative expense for these common stock awards for the six months ending October 30, 2016, and November 1, 2015, respectively.

Performance Based Restricted Stock Units

Fiscal 2017 Grant

On July 14, 2016, certain key members of management were granted performance-based restricted stock units which could earn up to 107,880 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $28 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

On July 14, 2016, a non-employee was granted performance-based restricted stock units which could earn up to 11,549 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreement. The fair value of this award is measured at the earlier date of when the performance criteria are met or the end of the reporting period. At October 30, 2016, this grant was unvested and was measured at $28.15 per share, which represents the closing price of our common stock at the end of the reporting period. The vesting of this award is over the requisite service period of three years.

Fiscal 2016 Grant

On July 15, 2015, certain key members of management were granted performance-based restricted stock units which could earn up to 107,554 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $32.23 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

On July 15, 2015, a non-employee was granted performance-based restricted stock units which could earn up to 10,364 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreement. The fair value of this award is measured at the earlier date of when the performance criteria are met or the end of the reporting period. At October 30, 2016, this grant was unvested and was measured at $28.15 per share, which represents the closing price of our common stock at the end of the reporting period. The vesting of this award is over the requisite service period of three years.

Fiscal 2015 Grants

On June 24, 2014, certain key members of management were granted performance-based restricted stock units which could earn up to 102,845 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $17.70 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

On March 3, 2015, a non-employee was granted performance-based restricted stock units which could earn up to 28,000 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. The fair value of this award is measured at the earlier date of when the performance criteria are met or the end of the reporting period. At October 30, 2016, 16,000 restricted stock units associated with this grant were unvested and were measured at $28.15 per share, which represents the closing price of the company's common stock at the end of the reporting period. The vesting of these 16,000 restricted stock units vest over their requisite service period of 28 months.

During the first quarter of fiscal 2017, 12,000 shares of common stock associated with the grant vested and had a weighted average fair value of $345,000 or $28.77 per share.

2014 Grant

On June 25, 2013, certain key members of management were granted performance-based restricted stock units which could earn up to 72,380 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $17.12 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

During the first quarter of fiscal 2017, 37,192 shares of common stock associated with this grant vested and had a weighted average fair value of $637,000 or $17.12 per share. Our fiscal 2014 grant is fully vested.

Fiscal 2013 Grant

On July 11, 2012, certain key members of management were granted performance based restricted stock units which could earn up to 120,000 shares of common stock if certain performance targets are met as defined in the related restricted stock unit agreements. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $10.21 per share, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years.

During the first quarter of fiscal 2016, 115,855 shares of common stock associated with our fiscal 2013 grant vested and had a weighted average fair value of $1.2 million or $10.21 per share. Our fiscal 2013 grant is fully vested.

Overall

We recorded compensation expense of $1.5 million and $1.2 million within selling, general, and administrative expense for our performance based restricted stock unit awards for the six month periods ending October 30, 2016 and November 1, 2015, respectively. Compensation cost is recorded based on an assessment each reporting period of the probability if certain performance goals will be met during the vesting period. If performance goals are not probable of occurrence, no compensation cost will be recognized and any recognized compensation cost would be reversed.

As of October 30, 2016, the remaining unrecognized compensation cost related to our performance based restricted stock unit awards was $5.0 million, which is expected to be recognized over a weighted average vesting period of 2.0 years.

Time Vested Restricted Stock Units

On July 14, 2016, an employee was granted 1,200 shares of time vested restricted stock units. This award was valued based on the fair market value on the date of grant. The fair value of this award was $28 per share, which represents the closing price of our common stock on the date of grant. The vesting of this award is over the requisite service period of 11 months.

We recorded compensation expense of $11,000 within selling, general, and administrative expense for our time vested restricted stock unit awards for the six months ending October 30, 2016. There were not any time vested restricted stock unit awards granted or unvested during the six months ending November 1, 2015 and, therefore, no compensation expense was recorded.

At October 30, 2016, the remaining unrecognized compensation cost related to unvested time vested restricted stock awards was $23,000, which is expected to be recognized over the next 7.5 months.

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Accounts Receivable

6 Months Ended

Oct. 30, 2016

Receivables [Abstract]

Accounts Receivable

4.  Accounts Receivable

A summary of accounts receivable follows:

(dollars in thousands)	October 30, 2016			November 1, 2015			May 1, 2016
Customers	$	20,580		$	25,045		$	25,531
Allowance for doubtful accounts		(420	)		(826	)		(1,088	)
Reserve for returns and allowances and discounts		(1,121	)		(905	)		(962	)
	$	19,039		$	23,314		$	23,481

A summary of the activity in the allowance for doubtful accounts follows:

	Six months ended
(dollars in thousands)	October 30, 2016			November 1, 2015
Beginning balance	$	(1,088	)	$	(851	)
Provision for bad debts		216			(81	)
Net write-offs, net of recoveries		452			106
Ending balance	$	(420	)	$	(826	)

A summary of the activity in the allowance for returns and allowances and discounts accounts follows:

	Six months ended
(dollars in thousands)	October 30, 2016			November 1, 2015
Beginning balance	$	(962	)	$	(738	)
Provision for returns, allowances
and discounts		(1,620	)		(1,561	)
Credits issued		1,461			1,394
Ending balance	$	(1,121	)	$	(905	)

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Inventories

6 Months Ended

Oct. 30, 2016

Inventory Disclosure [Abstract]

Inventories

5.  Inventories

Inventories are carried at the lower of cost or market.  Cost is determined using the FIFO (first-in, first-out) method.

A summary of inventories follows:

(dollars in thousands)	October 30, 2016		November 1, 2015		May 1, 2016
Raw materials	$	6,128	$	6,272	$	5,462
Work-in-process		2,518		2,779		2,972
Finished goods		37,308		37,428		38,097
	$	45,954	$	46,479	$	46,531

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Other Assets

6 Months Ended

Oct. 30, 2016

Text Block [Abstract]

Other Assets

6.  Other Assets

A summary of other assets follows:

(dollars in thousands)	October 30, 2016		November 1, 2015		May 1, 2016
Cash surrender value – life insurance	$	358	$	339	$	357
Non-compete agreement, net		866		941		903
Customer relationships, net		689		740		715
Other		582		474		598
	$	2,495	$	2,494	$	2,573

Non-Compete Agreement

We recorded our non-compete agreement at its fair value based on a discounted cash flow valuation model. Our non-compete agreement is amortized on a straight-line basis over the fifteen year life of the respective agreement.

The gross carrying amount of our non-compete agreement was $2.0 million at October 30, 2016, November 1, 2015 and May 1, 2016, respectively. At October 30, 2016, November 1, 2015, and May 1, 2016, accumulated amortization for our non-compete agreement was $1.2 million, $1.1 million, and $1.1 million, respectively.

Amortization expense for our non-compete agreement was $38,000 for the six month periods ended October 30, 2016 and November 1, 2015. The remaining amortization expense for the next five fiscal years and thereafter follows: FY 2017 - $37,000; FY 2018 - $75,000; FY 2019- $75,000; FY 2020 - $75,000; FY 2021 - $75,000 and Thereafter - $529,000.

The weighted average amortization period for our non-compete agreement is 11.5 years as of October 30, 2016.

Customer Relationships

We recorded our customer relationships at their fair value based on a multi-period excess earnings valuation model. Our customer relationships are amortized on a straight-line basis over its seventeen year useful life.

The gross carrying amount of our customer relationships was $868,000 at October 30, 2016, November 1, 2015, and May 1, 2016, respectively. Accumulated amortization for our customer relationships was $179,000, $128,000, and $153,000 at October 30, 2016, November 1, 2015, and May 1, 2016, respectively.

Amortization expense for our customer relationships was $26,000 for the six months ending October 30, 2016 and November 1, 2015. The remaining amortization expense for the next five fiscal years and thereafter follows: FY 2017 - $25,000; FY 2018 - $51,000; FY 2019 - $51,000; FY 2020 - $51,000; FY 2021 - $51,000; and Thereafter - $460,000.

The weighted average amortization period for our customer relationships is 13.5 years as of October 30, 2016.

Cash Surrender Value – Life Insurance

At October 30, 2016, November 1, 2015, and May 1, 2016 we had one life insurance contract with a death benefit of $1.4 million.

Our cash surrender value – life insurance balances totaling $358,000, $339,000 and $357,000 at October 30, 2016, November 1, 2015, and May 1, 2016, respectively, are collectible upon death of the respective insured.

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Accrued Expenses

6 Months Ended

Oct. 30, 2016

Text Block [Abstract]

Accrued Expenses

7.  Accrued Expenses

A summary of accrued expenses follows:

(dollars in thousands)	October 30, 2016		November 1, 2015		May 1, 2016
Compensation, commissions and related benefits	$	7,111	$	6,657	$	10,011
Advertising rebates		734		2,536		870
Interest		5		-		-
Other accrued expenses		1,028		702		1,041
	$	8,878	$	9,895	$	11,922

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Lines of Credit

6 Months Ended

Oct. 30, 2016

Debt Disclosure [Abstract]

Lines of Credit

8. Lines of Credit

Revolving Credit Agreement – United States

Our Credit Agreement with Wells Fargo Bank, N.A. ("Wells Fargo") provides a revolving loan commitment of $30 million. Interest was charged at a rate (applicable interest rate of 1.98% at October 30, 2016) as a variable spread over LIBOR based on our ratio of debt to EBITDA. The Credit Agreement contains certain financial and other covenants as defined in the agreement and is set to expire on August 15, 2018.

The purpose of our revolving credit line is to support potential short term cash needs in different jurisdictions within our global operations, mitigate our risk associated with foreign currency exchange rate fluctuations, and ultimately repatriate earnings and profits from our foreign subsidiaries to the U.S. for various strategic purposes.

Outstanding borrowings are secured by a pledge of 65% of the common stock of Culp International Holdings Ltd. (our subsidiary located in the Cayman Islands), as required by the Credit Agreement. There were no borrowings outstanding under the Credit Agreement at October 30, 2016, November 1, 2015, and May 1, 2016, respectively.

At October 30, 2016, November 1, 2015, and May 1, 2016, there were $250,000 in outstanding letters of credit (all of which related to workers compensation) provided by the Credit Agreement.

Effective August 1, 2016, we entered into a Third Amendment to our Credit Agreement that will allow us to issue letters of credit not to exceed $7.5 million. On August 3, 2016, we issued a $5.0 million letter of credit (all of which is currently outstanding and in addition to the $250,000 letter of credit noted above) for the construction of a new building associated with our mattress fabrics segment (see Note 15 for further details). This $5.0 million letter of credit will be automatically reduced in increments of $1.25 million on August 1, 2017, November 1, 2017, February 1, 2018, and May 15, 2018, respectively.

Revolving Credit Agreement – China

We have an unsecured credit agreement associated with our operations in China that provides for a line of credit of up to 40 million Chinese Yuan Renminbi (approximately $5.9 million USD at October 30, 2016), that expires on March 8, 2017. This agreement has an interest rate determined by the Chinese government and there were no borrowings outstanding as of October 30, 2016, November 1, 2015, and May 1, 2016.

Overall

Our loan agreements require, among other things, that we maintain compliance with certain financial covenants. At October 30, 2016, the company was in compliance with these financial covenants.

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Fair Value of Financial Instruments

6 Months Ended

Oct. 30, 2016

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

9. Fair Value of Financial Instruments

ASC Topic 820 establishes a fair value hierarchy that distinguishes between assumptions based on market data (observable inputs) and the company's assumptions (unobservable inputs). Determining where an asset or liability falls within that hierarchy depends on the lowest level input that is significant to the fair value measurement as a whole. An adjustment to the pricing method used within either level 1 or level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy. The hierarchy consists of three broad levels as follows:

Level 1 – Quoted market prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than level 1 inputs that are either directly or indirectly observable, and

Level 3 – Unobservable inputs developed using the company's estimates and assumptions, which reflect those that market participants would use.

Recurring Basis

The following table presents information about assets measured at fair value on a recurring basis:

	Fair value measurements at October 30, 2016 using:
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash and Cash Equivalents	$	23,940		N/A		N/A	$	23,940
U.S. Corporate Bonds		-		7,110		N/A		7,110
Premier Money Market Fund		4,421		N/A		N/A		4,421
Low Duration Bond Fund		1,075		N/A		N/A		1,075
Intermediate Term Bond Fund		750		N/A		N/A		750
Strategic Income Fund		605		N/A		N/A		605
Large Blend Fund		319		N/A		N/A		319
Growth Allocation Fund		102		N/A		N/A		102
Other		152		N/A		N/A		152

	Fair value measurements at November 1, 2015 using:
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Premier Money Market Fund	$	2,703		N/A		N/A	$	2,703
Intermediate Term Bond Fund		2,144		N/A		N/A		2,144
Low Duration Bond Fund		2,098		N/A		N/A		2,098
Limited Term Bond Fund		1,094		N/A		N/A		1,094
Strategic Income Fund		984		N/A		N/A		984
Large Blend Fund		279		N/A		N/A		279
Growth Allocation Fund		125		N/A		N/A		125
Mid Cap Value Fund		94		N/A		N/A		94
Other		78		N/A		N/A		78

	Fair value measurements at May 1, 2016 using:
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Premier Money Market Fund	$	3,404		N/A		N/A	$	3,404
Low Duration Bond Fund		1,604		N/A		N/A		1,604
Intermediate Term Bond Fund		1,154		N/A		N/A		1,154
Strategic Income Fund		999		N/A		N/A		999
Limited Term Bond Fund		602		N/A		N/A		602
Large Blend Fund		289		N/A		N/A		289
Growth Allocation Fund		148		N/A		N/A		148
Mid Cap Value Fund		102		N/A		N/A		102
Other		82		N/A		N/A		82

The determination of where an asset or liability falls in the hierarchy requires significant judgment. We evaluate our hierarchy disclosures each quarter based on various factors and it is possible that an asset or liability may be classified differently from quarter to quarter. However, we expect that changes in classifications between different levels will be rare.

Short-Term Investments

At October 30, 2016, November 1, 2015, and May 1, 2016, our short-term investments totaled $2.4 million, $6.3 million, and $4.4 million, respectively, and consisted of short-term bond funds. Our short-term bond funds are recorded at their fair value, are classified as available-for-sale, and their unrealized gains or losses are included in other comprehensive income (loss). Our short-term bond investments had an accumulated unrealized loss totaling $45,000, $171,000, and $100,000 at October 30, 2016, November 1, 2015, and May 1, 2016, respectively. At October 30, 2016, November 1, 2015, and May 1, 2016, the fair value of our short-term bond funds approximated its cost basis.

Long- Term Investments - Held-To-Maturity

During the second quarter of fiscal 2017, management decided to invest approximately $31.0 million in investment grade U.S. Corporate bonds with maturities primarily ranging from 2 to 2.5 years. The purpose of this investment was to earn a higher rate of return on our excess cash located in the Cayman Islands. These investments are classified as held-to-maturity as we have the positive intent and ability to hold these investments until maturity. Our held-to-maturity investments will be recorded as either current or noncurrent on the Consolidated Balance Sheet, based on contractual maturity date and stated at amortized cost.

At October 30, 2016, our held-to-maturity investments totaling $31.0 million consisted of invested cash and cash equivalents of $23.9 million and U.S. Corporate bonds of $7.1 million. The $23.9 million in invested cash and cash equivalents were used to purchase U.S. Corporate bonds during our third quarter of fiscal 2017 (all U.S. Corporate bond purchases were completed by November 3, 2016). The fair value of our held-to-maturity investments approximates their cost basis.

Long-Term Investments - Rabbi Trust

Effective January 1, 2014, we established a Rabbi Trust to set aside funds for participants of our deferred compensation plan (the "Plan") and enable the participants to credit their contributions to various investment options of the Plan. The investments associated with the Rabbi Trust consist of a money market fund and various mutual funds that are classified as available for sale.

Our long-term investments are recorded at their fair value of $5.0 million, $3.3 million, and $4.0 million at October 30, 2016, November 1, 2015, and May 1, 2016, respectively. Our long-term investments had an accumulated unrealized gain of $1,000 and $14,000 at October 1, 2016 and November 1, 2015, respectively, and an accumulated realized loss of $44,000 at May 1, 2016. The fair value of our long-term investments associated with our Rabbi Trust approximates its cost basis.

Other

The carrying amount of cash and cash equivalents, accounts receivable, other current assets, accounts payable, and accrued expenses approximates fair value because of the short maturity of these financial instruments.

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Cash Flow Information

6 Months Ended

Oct. 30, 2016

Supplemental Cash Flow Elements [Abstract]

Cash Flow Information

10.  Cash Flow Information

Interest and income taxes paid are as follows:

	Six months ended
(dollars in thousands)	October 30, 2016		November 1, 2015
Interest	$	45	$	86
Income taxes		3,238		2,088

Interest costs charged to operations were $45,000 and $49,000 for the six months ended October 30, 2016 and November 1, 2015, respectively.

Interest costs of $45,000 and $49,000 for the construction of qualifying fixed assets were capitalized and will be amortized over the related assets' useful lives for the six months ended October 30, 2016 and November 1, 2015, respectively.

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Net Income Per Share

6 Months Ended

Oct. 30, 2016

Earnings Per Share [Abstract]

Net Income Per Share

11.  Net Income Per Share

Basic net income per share is computed using the weighted-average number of shares outstanding during the period.  Diluted net income per share uses the weighted-average number of shares outstanding during the period plus the dilutive effect of stock-based compensation calculated using the treasury stock method.  Weighted average shares used in the computation of basic and diluted net income per share follows:

	Three months ended
(amounts in thousands)	October 30, 2016		November 1, 2015
Weighted average common shares outstanding, basic		12,308		12,343
Dilutive effect of stock-based compensation		199		141
Weighted average common shares outstanding, diluted		12,507		12,484

All options to purchase shares of common stock were included in the computation of diluted net income for the three months ended October 30, 2016 and November 1, 2015, as the exercise price of the options was less than the average market price of the common shares.

	Six months ended
(amounts in thousands)	October 30, 2016		November 1, 2015
Weighted average common shares outstanding, basic		12,297		12,310
Dilutive effect of stock-based compensation		198		171
Weighted average common shares outstanding, diluted		12,495		12,481

All options to purchase shares of common stock were included in the computation of diluted net income for the six months ended October 30, 2016 and November 1, 2015, as the exercise price of the options was less than the average market price of the common shares.

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Segment Information

6 Months Ended

Oct. 30, 2016

Segment Reporting [Abstract]

Segment Information

12.  Segment Information

Our operations are classified into two business segments: mattress fabrics and upholstery fabrics.  The mattress fabrics segment manufactures, sources, and sells fabrics and mattress covers to bedding manufacturers.  The upholstery fabrics segment sources, manufactures, and sells fabrics primarily to residential furniture manufacturers.

We evaluate the operating performance of our segments based upon income from operations before certain unallocated corporate expenses and other non-recurring items. Cost of sales in both segments include costs to manufacture or source our products, including costs such as raw material and finished goods purchases, direct and indirect labor, overhead and incoming freight charges.  Unallocated corporate expenses primarily represent compensation and benefits for certain executive officers, all costs related to being a public company, and other miscellaneous expenses.  Segment assets include assets used in the operations of each segment and primarily consist of accounts receivable, inventories, and property, plant and equipment.  The mattress fabrics segment also includes in segment assets, goodwill, a non-compete agreement, and customer relationships associated with an acquisition.

Financial information for the company’s operating segments follows:

	Three months ended
(dollars in thousands)	October 30, 2016			November 1, 2015
Net sales:
Mattress Fabrics	$	45,527		$	45,436
Upholstery Fabrics		29,816			31,520
	$	75,343		$	76,956
Gross profit:
Mattress Fabrics	$	10,756		$	9,456
Upholstery Fabrics		6,145			6,277
	$	16,901		$	15,733
Selling, general, and administrative expenses:
Mattress Fabrics	$	3,296		$	2,989
Upholstery Fabrics		3,652			3,813
Total segment selling, general, and
administrative expenses		6,948			6,802
Unallocated corporate expenses		2,654			2,631
	$	9,602		$	9,433
Income from operations:
Mattress Fabrics	$	7,460		$	6,467
Upholstery Fabrics		2,493			2,464
Total segment income from operations		9,953			8,931
Unallocated corporate expenses		(2,654	)		(2,631	)
Total income from operations		7,299			6,300
Interest income		15			69
Other expense		(155	)		(225	)
Income before income taxes	$	7,159		$	6,144

	Six months ended
(dollars in thousands)	October 30, 2016			November 1, 2015
Net sales:
Mattress Fabrics	$	96,057		$	93,245
Upholstery Fabrics		59,969			63,896
	$	156,026		$	157,141
Gross profit:
Mattress Fabrics	$	22,657		$	19,381
Upholstery Fabrics		12,664			12,554
	$	35,321		$	31,935
Selling, general, and administrative expenses:
Mattress Fabrics	$	6,795		$	5,912
Upholstery Fabrics		7,185			7,409
Total segment selling, general, and
administrative expenses		13,980			13,321
Unallocated corporate expenses		5,368			4,854
	$	19,348		$	18,175
Income from operations:
Mattress Fabrics	$	15,862		$	13,468
Upholstery Fabrics		5,479			5,146
Total segment income from operations		21,341			18,614
Unallocated corporate expenses		(5,368	)		(4,854	)
Total income from operations		15,973			13,760
Interest income		40			112
Other expense		(307	)		(320	)
Income before income taxes	$	15,706		$	13,552

Balance sheet information for the company’s operating segments follows:

(dollars in thousands)	October 30, 2016		November 1, 2015		May 1, 2016
Segment assets:
Mattress Fabrics
Current assets (1)	$	38,062	$	40,937	$	43,472
Non-compete agreement		866		941		903
Customer relationships		689		740		715
Goodwill		11,462		11,462		11,462
Property, plant and equipment (2)		43,228		36,050		37,480
Total mattress fabrics assets		94,307		90,130		94,032
Upholstery Fabrics
Current assets (1)		26,931		28,856		26,540
Property, plant and equipment (3)		1,480		1,474		1,564
Total upholstery fabrics assets		28,411		30,330		28,104
Total segment assets		122,718		120,460		122,136
Non-segment assets:
Cash and cash equivalents		13,910		31,176		37,787
Short-term investments		2,430		6,320		4,359
Deferred income taxes		581		3,415		2,319
Income taxes receivable		-		75		155
Other current assets		1,675		2,614		2,477
Property, plant and equipment (4)		829		795		929
Long-term investments (Held-to-Maturity)		31,050		-		-
Long-term investments (Rabbi Trust)		4,994		3,279		4,025
Other assets		940		813		955
Total assets	$	179,127	$	168,947	$	175,142

	Six months ended
(dollars in thousands)	October 30, 2016		November 1, 2015
Capital expenditures (5):
Mattress Fabrics	$	8,857	$	5,138
Upholstery Fabrics		165		254
Unallocated Corporate		62		143
Total capital expenditures	$	9,084	$	5,535
Depreciation expense:
Mattress Fabrics	$	3,101	$	2,783
Upholstery Fabrics		410		401
Total depreciation expense	$	3,511	$	3,184

(1) Current assets represent accounts receivable and inventory for the respective segment.

(2) The $43.2 million at October 30, 2016, represents property, plant, and equipment of $28.5 million and $14.7 million located in the U.S. and Canada, respectively. The $36.1 million at November 1, 2015, represents property, plant, and equipment of $23.3 million and $12.8 million located in the U.S. and Canada, respectively. The $37.5 million at May 1, 2016, represents property, plant, and equipment of $24.8 million and $12.7 million located in the U.S. and Canada, respectively.

(3) The $1.5 million at October 30, 2016, represents property, plant, and equipment of $890 and $590 located in the U.S. and China, respectively. The $1.5 million at November 1, 2015, represents property, plant, and equipment of $785 and $689 located in the U.S. and China, respectively. The $1.6 million at May 1, 2016, represents property, plant, and equipment of $893 and $671 located in the U.S. and China, respectively.

(4) The $829, $795, and $929 at October 30, 2016, November 1, 2015 and May 1, 2016, respectively, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by both the mattress and upholstery fabric segments. Property, plant, and equipment associated with corporate are located in the U.S.

(5) Capital expenditure amounts are stated on the accrual basis. See Consolidated Statements of Cash Flows for capital expenditure amounts on a cash basis.

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Income Taxes

6 Months Ended

Oct. 30, 2016

Income Tax Disclosure [Abstract]

Income Taxes

13.  Income Taxes

Effective Income Tax Rate

We recorded income tax expense of $5.9 million, or 37.7% of income before income taxes, for the six month period ended October 30, 2016, compared to income tax expense of $5.1 million, or 37.5% of income before income taxes, for the six month period ended November 1, 2015. Our effective income tax rates for the six month periods ended October 30, 2016, and November 1, 2015, were based upon the estimated effective income tax rate applicable for the full year after giving effect to any significant items related specifically to interim periods. The effective income tax rate can be affected over the fiscal year by the mix and timing of actual earnings from our U.S. operations and foreign sources versus annual projections and changes in foreign currency exchange rates in relation to the U.S. dollar.

The following schedule summarizes the factors that are attributable to the difference between income tax expense at the federal income tax rate and the effective income tax rate reflected in the consolidated financial statements:

	2017			2016
federal income tax rate		34.0	%		34.0	%
U.S state income tax expense		0.6			0.7
tax effects of Chinese foreign exchange gains		1.6			2.3
increase in liability for uncertain tax positions		0.3			0.3
other		1.2			0.2
		37.7	%		37.5	%

Deferred Income Taxes

Valuation Allowance

In accordance with ASC Topic 740, we evaluate our deferred income taxes to determine if a valuation allowance is required. ASC Topic 740 requires that companies assess whether a valuation allowance should be established based on the consideration of all available evidence using a "more-likely-than-not" standard, with significant weight being given to evidence that can be objectively verified. Since the company operates in multiple jurisdictions, we assess the need for a valuation allowance on a jurisdiction-by-jurisdiction basis, taking into account the effects of local tax law. Based on our assessment at October 30, 2016, we recorded a partial valuation allowance of $603,000, of which $519,000 pertained to certain U.S. state net operating loss carryforwards and credits and $84,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland.  Based on our assessment at November 1, 2015, we recorded a partial valuation allowance of $938,000, of which $561,000 pertained to certain U.S. state net operating loss carryforwards and credits and $377,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland.  Based on our assessment at May 1, 2016, we recorded a partial valuation allowance of $590,000, of which $518,000 pertained to certain U.S. state net operating loss carryforwards and credits and $72,000 pertained to loss carryfowards associated with our Culp Europe operation located in Poland.

No valuation allowance was recorded against our net deferred tax assets associated with our operations located in China and Canada at October 30, 2016, November 1, 2015, and May 1, 2016, respectively.

The recorded valuation allowance of $603,000 at October 30, 2016, has no effect on our operations, loan covenant compliance, or the possible realization of certain U.S. state net operating loss carryforwards and credits and our loss carryforwards associated with our Culp Europe operation located in Poland. If it is determined that it is more-likely-than-not that we will realize any of these deferred tax assets, an income tax benefit will be recognized at that time.

Undistributed Earnings

In accordance with ASC Topic 740, we assess whether the undistributed earnings from our foreign subsidiaries will be reinvested indefinitely or eventually distributed to our U.S. parent company. ASC Topic 740 requires that a deferred tax liability should be recorded for undistributed earnings from foreign subsidiaries that will not be reinvested indefinitely. Based on our assessment as of October 30, 2016, it is our intention not to permanently invest our undistributed earnings from our foreign subsidiaries. Also, we assess the recognition of U.S. foreign income tax credits associated with foreign withholding and income tax payments and whether it is more-likely-than-not that our foreign income tax credits will not be realized. If it is determined that any foreign income tax credits need to be recognized or it is more-likely-than-not our foreign income tax credits will not be realized, an adjustment to our provision for income taxes will be recognized at that time.

At October 30, 2016, we had accumulated earnings and profits from our foreign subsidiaries totaling $138.9 million. At the same date, the deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $657,000, which included U.S. income and foreign withholding taxes totaling $41.4 million, offset by U.S. foreign income tax credits of $40.7 million.

At November 1, 2015, we had accumulated earnings and profits from our foreign subsidiaries totaling $93.2 million. At the same date, the deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $2.4 million, which included U.S. income and foreign withholding taxes totaling $35.7 million, offset by U.S. foreign income tax credits of $33.3 million.

At May 1, 2016, we had accumulated earnings and profits from our foreign subsidiaries totaling $129.6 million. At the same date, the deferred tax liability associated with our undistributed earnings from our foreign subsidiaries totaled $604,000, which included U.S. income and foreign withholding taxes totaling $38.5 million, offset by U.S. foreign income tax credits of $37.9 million.

Overall

At October 30, 2016, our non-current deferred tax asset of $581,000 represents $109,000 and $472,000 from our operations located in the U.S. and China, respectively. At November 1, 2015, our non-current deferred tax asset of $3.4 million represents $2.5 million and $898,000 from our operations located in the U.S. and China, respectively. At May 1, 2016, our non-current deferred tax asset of $2.3 million represents $1.7 million and $572,000 from our operations located in the U.S. and China, respectively.

Our non-current deferred tax liability balances of $1.7 million, $1.2 million, and $1.5 million at October 30, 2016, November 1, 2015, and May 1, 2016, respectively, pertain to our operations located in Canada.

Uncertainty In Income Taxes

At October 30, 2016, we had a $15.1 million total gross unrecognized income tax benefit, of which $11.4 million and $3.7 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets. At November 1, 2015, we had a $14.2 million total gross unrecognized income tax benefit, of which $10.5 million and $3.7 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets. At May 1, 2016, we had $14.9 million of total gross unrecognized income tax benefit, of which $11.1 million and $3.8 million were classified as non-current deferred income taxes and income taxes payable – long-term, respectively, in the accompanying consolidated balance sheets.

At October 30, 2016, our $15.1 million total gross unrecognized income tax benefit included $3.7 million that, if recognized, would favorably affect the income tax rate in future periods. At November 1, 2015, our $14.2 million total gross unrecognized income tax benefit, included $3.7 million that, if recognized, would favorably affect the income tax rate in future periods. At May 1, 2016, our $14.9 million total gross unrecognized income tax benefit included $3.8 million that, if recognized, would favorably affect the income tax rate in future periods.

Our gross unrecognized income tax benefit of $15.1 million at October 30, 2016,  relates to tax positions for which significant change is reasonably possible in fiscal 2017. This amount primarily relates to double taxation under applicable income tax treaties with foreign tax jurisdictions. United States federal and state income tax returns filed by us remain subject to examination for income tax years 2005 and subsequent due to loss carryforwards. Canadian federal returns remain subject to examination for income tax years 2009 and subsequent, with the statute of limitations for the 2009 income tax year expiring in January 2017. Canadian provincial (Quebec) returns  remain subject to examination for income tax years 2009 and subsequent, with the statute of limitations for the 2009 income tax year expiring in April 2017. Income tax returns associated with our operations located in China are subject to examination for income tax year 2011 and subsequent.

Currently, the Internal Revenue Service is examining our U.S. Federal income tax returns for fiscal 2014 and no adjustments have been proposed at this time. We currently expect this examination to be completed by the end of our fiscal year 2017 (April 30, 2017). During the third quarter of fiscal 2017, Revenue Quebec commenced an examination of our Canadian provincial (Quebec) income tax returns for fiscal years 2013 through 2015. We currently expect this examination to be completed by the end of our first quarter of fiscal 2018 (July 30, 2017).

In accordance with ASC Topic 740, an unrecognized income tax benefit for an uncertain income tax position can be recognized in the first interim period if the more-likely-than-not recognition threshold is met by the reporting period, or is effectively settled through examination, negotiation, or litigation, or the statue of limitations for the relevant taxing authority to examine and challenge the tax position has expired. If it is determined that any of the above conditions occur regarding our uncertain income tax positions, an adjustment to our unrecognized income tax benefit will be recorded at that time.

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Statutory Reserves

6 Months Ended

Oct. 30, 2016

Text Block [Abstract]

Statutory Reserves

14.  Statutory Reserves

Our subsidiaries located in China are required to transfer 10% of their net income, as determined in accordance with the People’s Republic of China (PRC) accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the company’s registered capital.

The transfer to this reserve must be made before distributions of any dividend to shareholders. As of October 30, 2016, the company’s statutory surplus reserve was $4.6 million, representing 10% of accumulated earnings and profits determined in accordance with PRC accounting rules and regulations. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing shareholders in proportion to their shareholding or by increasing the par value of the shares currently held by them provided that the remaining reserve balance after such issue is not less than 25% of the registered capital.

Our subsidiaries located in China can transfer funds to the parent company with the exception of the statutory surplus reserve of $4.6 million to assist with debt repayment, capital expenditures, and other expenses of the company’s business.

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Commitments and Contingencies

6 Months Ended

Oct. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

15.   Commitments and Contingencies

Litigation

The company is involved in legal proceedings and claims which have arisen in the ordinary course of business. Management has determined that it is not reasonably possible that these actions, when ultimately concluded and settled, will have a material adverse effect upon the financial position, results of operations, or cash flows of the company.

Purchase Commitments

Overall

At October 30, 2016, November 1, 2015, and May 1, 2016, we had open purchase commitments to acquire a building and equipment for our mattress fabrics segment totaling $9.8 million, $1.9 million, and $10.6 million, respectively. The $9.8 million and $10.6 million open purchase commitments as of October 30,2016 and May 1, 2016, include $6.1 million and $9.3 million associated with the construction of a new building noted below.

Construction of New Building

Effective May 16, 2016, we entered into an agreement with a contractor to construct a new building located in North Carolina that will expand our distribution capabilities and office space at a current estimated cost of $11.2 million. This agreement required an installment payment of $1.9 million in April 2016 and requires additional installment payments to be made in the following fiscal years: Fiscal 2017- $4.3 million; Fiscal 2018- $3.8 million; and Fiscal 2019- $1.2 million. Interest will be charged on the required outstanding installment payments in excess of services that have been rendered at a rate of $2.25% plus the current 30 day LIBOR rate.

Also, we were required to issue a letter of a credit totaling $5.0 million with the contractor’s bank being the beneficiary. In addition to the interest that will be charged on the outstanding installment payments noted above, there will be a 0.1% unused fee calculated on the balance of the $5.0 million letter of credit less the amount outstanding per month (see Note 8 for further details).

As of October 30, 2016, we have made payments totaling $5.1 million for services rendered on the construction of this building. The remaining $6.1 million on this commitment is required to be paid on an installment basis over the next three fiscal years as follows: Fiscal 2017 - $1.1 million; Fiscal 2018 - $3.8 million; and Fiscal 2019 - $1.2 million.

The construction of this new building is currently expected to be completed in December 2016.

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Common Stock Repurchase Program

6 Months Ended

Oct. 30, 2016

Text Block [Abstract]

Common Stock Repurchase Program

16.  Common Stock Repurchase Program

On June 15, 2016, we announced that our board of directors approved an authorization for us to acquire up to $5.0 million of our common stock. Under the common stock repurchase program, shares may be purchased from time to time in open market transactions, block trades, through plans established under the Securities Exchange Act Rule 10b5-1, or otherwise. The amount of shares purchased and the timing of such purchases will be based on working capital requirements, market and general business conditions, and other factors including alternative investment opportunities.

During the six months ended October 30, 2016, and November 1, 2015, we did not purchase any shares of our common stock.

At October 30, 2016, we had $5.0 million available for additional repurchases of our common stock.

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Dividend Program

6 Months Ended

Oct. 30, 2016

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Dividend Program

17.  Dividend Program

On December 1, 2016, we announced that our board of directors approved a 14% increase in our quarterly cash dividend from $0.07 to $0.08 per share. This payment will be made on January 17, 2017, to shareholders of record as of January 3, 2017.

During the first half of fiscal 2017, dividend payments totaled $4.3 million, of which $2.5 million represented a special cash dividend payment of $0.21 per share, and $1.8 million represented quarterly dividend payments of $0.07 per share.

During the first half of fiscal 2016, dividend payments totaled $6.4 million, of which $5.0 million represented a special cash dividend of $0.40 per share, and $1.4 million represented quarterly dividend payments of $0.06 per share.

Future dividend payments are subject to board approval and may be adjusted at the board's discretion as business needs or market conditions change.

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Significant Accounting Policies (Policies)

6 Months Ended

Oct. 30, 2016

Accounting Policies [Abstract]

Recently Adopted and Issued Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes, an amendment to FASB ASC Topic 740, which simplifies the presentation of deferred income taxes on an entity’s classified balance sheet. Currently, entities that are required to issue a classified balance sheet present a net current and net noncurrent deferred income tax asset or liability for each tax jurisdiction. The amendments in this ASU require entities to offset all deferred income tax assets and liabilities for each tax jurisdiction and present a net deferred income tax asset or liability as a single noncurrent amount. The recognition and measurement guidance for deferred income tax assets and liabilities are not affected by this amendment. This amended guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016. Early adoption is permitted and the standard may be applied either retrospectively or on a prospective basis to all deferred income tax assets and liabilities.

We early adopted this amendment during the third quarter of fiscal 2016 on a retrospective basis. Accordingly, we reclassified our current deferred income taxes to noncurrent on our November 1, 2015 Consolidated Balance Sheet, which increased noncurrent deferred income taxes $3.0 million and decreased noncurrent deferred tax liabilities $4.7 million.

In June 2014, the Financial Accounting Standards Board (“FASB”) amended its authoritative guidance on accounting for certain share-based payment awards. The amended guidance requires that share-based compensation awards with terms of a performance target that affects vesting, and that could be achieved after the requisite service period, be treated as a performance condition. As such, the performance target should not be reflected in estimating the grant-date fair value of the award and compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved. The guidance will permit an entity to apply the amendments in the update either (a) prospectively to all awards granted or modified after the effective date or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the consolidated financial statements and to all new or modified awards thereafter.

This guidance was effective for the first quarter of fiscal 2017 and did not have any impact on our consolidated financial statements as we currently do not have any share-based payment awards with terms of a performance target that affects vesting and could be achieved after the requisite service period.

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09, which amends ASC Topic 606, Revenue from Contracts with Customers. The amendments in this ASU are intended to enhance the comparability of revenue recognition practices and will be applied to all contracts with customers. Improved disclosures related to the nature, amount, timing, and uncertainty of revenue that is recognized are requirements under the amended guidance. In April 2015, the FASB issued ASU 2015-24, Revenue from Contracts with Customers: Deferral of the Effective Date which proposed a deferral of the effective date by one year, and on July 7, 2015, the FASB decided to delay the effective date by one year. The deferral results in the new revenue standard being effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2017. We are therefore required to apply the new revenue guidance in our fiscal 2019 interim and annual financial statements. This ASU can be adopted either retrospectively or as a cumulative-effect adjustment as of the date of adoption. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which changed the measurement principle for inventory from the lower of cost or market to lower of cost and net realizable value. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2016. We are therefore required to apply this guidance in our fiscal 2018 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which increases transparency and comparability among companies accounting for lease transactions. The most significant change of this update will require the recognition of lease assets and liabilities on the balance sheet for operating lease arrangements with lease terms greater than twelve months for lessees. This update will require a modified retrospective application which includes a number of optional practical expedients related to the identification and classification of leases commenced before the effective date. This ASU is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018. We are therefore required to apply this guidance in our fiscal 2020 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In March 2016, the FASB issued ASU No. 2016-09, "Compensation - Stock Compensation (Topic 718): Improvements to Employee Shares-Based Payment Accounting." ASU 2016-09 is intended to improve the accounting for share-based payment transactions as part of the FASB’s simplification initiative. ASU 2016-09 changes several aspects of the accounting for share-based payment award transactions, including: (1) accounting for income taxes; (2) classification of excess tax benefits on the statement of cash flows; (3) forfeitures; (4) minimum statutory tax withholding requirements; and (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. ASU 2016-09 is effective for fiscal years beginning after December 15, 2016, and interim periods within those years for public companies. We are therefore required to apply this guidance in our fiscal 2018 interim and annual financial statements. We are currently assessing the impact that ASU 2016-09 will have on its consolidated financial statements.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to address the diversity in how certain cash receipts and cash payments are presented in the statement of cash flows. This new guidance provides clarity around the cash flow classification for eight specific issues in an effort to reduce the current and potential future diversity in practice. This standard, which is to be applied retrospectively, will be effective for the first interim period within annual reporting periods beginning after December 15, 2017, and early adoption is permitted. We are therefore required to apply this new guidance in our fiscal 2019 interim and annual financial statements. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

In October 2016, the FASB issued ASU No. 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Than Inventory, to reduce the diversity in practice and complexity associated with accounting for the income tax consequences of intra-entity transfers of assets other than inventory. Current GAAP prohibits recognition of deferred income taxes for an intra-entity transfer until the asset has been sold to an outside party. The new pronouncement stipulates that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This new guidance will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those annual reporting periods, with early adoption permitted in the first interim period only. We are therefore required to apply this new guidance in our fiscal 2019 interim and annual financial statements. The amendments are to applied on a modified retrospective basis through a cumulative-effect adjustment directly to retained earnings as of the beginning of the period of adoption. We are currently assessing the impact that this guidance will have on our consolidated financial statements.

There are no other new accounting pronouncements that are expected to have a significant impact on our consolidated financial statements.

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Accounts Receivable (Tables)

6 Months Ended

Oct. 30, 2016

Receivables [Abstract]

Summary of Accounts Receivable

A summary of accounts receivable follows:

(dollars in thousands)	October 30, 2016			November 1, 2015			May 1, 2016
Customers	$	20,580		$	25,045		$	25,531
Allowance for doubtful accounts		(420	)		(826	)		(1,088	)
Reserve for returns and allowances and discounts		(1,121	)		(905	)		(962	)
	$	19,039		$	23,314		$	23,481

Summary of the Activity in the Allowance for Doubtful Accounts

A summary of the activity in the allowance for doubtful accounts follows:

	Six months ended
(dollars in thousands)	October 30, 2016			November 1, 2015
Beginning balance	$	(1,088	)	$	(851	)
Provision for bad debts		216			(81	)
Net write-offs, net of recoveries		452			106
Ending balance	$	(420	)	$	(826	)

Summary of the Activity in the Allowance for Returns and Allowances and Discounts Accounts

A summary of the activity in the allowance for returns and allowances and discounts accounts follows:

	Six months ended
(dollars in thousands)	October 30, 2016			November 1, 2015
Beginning balance	$	(962	)	$	(738	)
Provision for returns, allowances
and discounts		(1,620	)		(1,561	)
Credits issued		1,461			1,394
Ending balance	$	(1,121	)	$	(905	)

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Inventories (Tables)

6 Months Ended

Oct. 30, 2016

Inventory Disclosure [Abstract]

Summary of Inventories

A summary of inventories follows:

(dollars in thousands)	October 30, 2016		November 1, 2015		May 1, 2016
Raw materials	$	6,128	$	6,272	$	5,462
Work-in-process		2,518		2,779		2,972
Finished goods		37,308		37,428		38,097
	$	45,954	$	46,479	$	46,531

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Other Assets (Tables)

6 Months Ended

Oct. 30, 2016

Text Block [Abstract]

Summary of Other Assets

A summary of other assets follows:

(dollars in thousands)	October 30, 2016		November 1, 2015		May 1, 2016
Cash surrender value – life insurance	$	358	$	339	$	357
Non-compete agreement, net		866		941		903
Customer relationships, net		689		740		715
Other		582		474		598
	$	2,495	$	2,494	$	2,573

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Accrued Expenses (Tables)

6 Months Ended

Oct. 30, 2016

Text Block [Abstract]

Summary of Accrued Expenses

A summary of accrued expenses follows:

(dollars in thousands)	October 30, 2016		November 1, 2015		May 1, 2016
Compensation, commissions and related benefits	$	7,111	$	6,657	$	10,011
Advertising rebates		734		2,536		870
Interest		5		-		-
Other accrued expenses		1,028		702		1,041
	$	8,878	$	9,895	$	11,922

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Oct. 30, 2016

Fair Value Disclosures [Abstract]

Schedule of Assets Measured at Fair Value on a Recurring Basis

The following table presents information about assets measured at fair value on a recurring basis:

	Fair value measurements at October 30, 2016 using:
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash and Cash Equivalents	$	23,940		N/A		N/A	$	23,940
U.S. Corporate Bonds		-		7,110		N/A		7,110
Premier Money Market Fund		4,421		N/A		N/A		4,421
Low Duration Bond Fund		1,075		N/A		N/A		1,075
Intermediate Term Bond Fund		750		N/A		N/A		750
Strategic Income Fund		605		N/A		N/A		605
Large Blend Fund		319		N/A		N/A		319
Growth Allocation Fund		102		N/A		N/A		102
Other		152		N/A		N/A		152

	Fair value measurements at November 1, 2015 using:
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Premier Money Market Fund	$	2,703		N/A		N/A	$	2,703
Intermediate Term Bond Fund		2,144		N/A		N/A		2,144
Low Duration Bond Fund		2,098		N/A		N/A		2,098
Limited Term Bond Fund		1,094		N/A		N/A		1,094
Strategic Income Fund		984		N/A		N/A		984
Large Blend Fund		279		N/A		N/A		279
Growth Allocation Fund		125		N/A		N/A		125
Mid Cap Value Fund		94		N/A		N/A		94
Other		78		N/A		N/A		78

	Fair value measurements at May 1, 2016 using:
	Quoted prices in active markets for identical assets		Significant other observable inputs		Significant unobservable inputs
(amounts in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Premier Money Market Fund	$	3,404		N/A		N/A	$	3,404
Low Duration Bond Fund		1,604		N/A		N/A		1,604
Intermediate Term Bond Fund		1,154		N/A		N/A		1,154
Strategic Income Fund		999		N/A		N/A		999
Limited Term Bond Fund		602		N/A		N/A		602
Large Blend Fund		289		N/A		N/A		289
Growth Allocation Fund		148		N/A		N/A		148
Mid Cap Value Fund		102		N/A		N/A		102
Other		82		N/A		N/A		82

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Cash Flow Information (Tables)

6 Months Ended

Oct. 30, 2016

Supplemental Cash Flow Elements [Abstract]

Schedule of Interest and Income Taxes Paid

Interest and income taxes paid are as follows:

	Six months ended
(dollars in thousands)	October 30, 2016		November 1, 2015
Interest	$	45	$	86
Income taxes		3,238		2,088

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Net Income Per Share (Tables)

6 Months Ended

Oct. 30, 2016

Earnings Per Share [Abstract]

Schedule of Weighted Average Shares Used in the Computation of Basic and Diluted Net Income Per Share

Weighted average shares used in the computation of basic and diluted net income per share follows:

	Three months ended
(amounts in thousands)	October 30, 2016		November 1, 2015
Weighted average common shares outstanding, basic		12,308		12,343
Dilutive effect of stock-based compensation		199		141
Weighted average common shares outstanding, diluted		12,507		12,484

	Six months ended
(amounts in thousands)	October 30, 2016		November 1, 2015
Weighted average common shares outstanding, basic		12,297		12,310
Dilutive effect of stock-based compensation		198		171
Weighted average common shares outstanding, diluted		12,495		12,481

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Segment Information (Tables)

6 Months Ended

Oct. 30, 2016

Segment Reporting [Abstract]

Schedule of Operating Segments Information

Financial information for the company’s operating segments follows:

	Three months ended
(dollars in thousands)	October 30, 2016			November 1, 2015
Net sales:
Mattress Fabrics	$	45,527		$	45,436
Upholstery Fabrics		29,816			31,520
	$	75,343		$	76,956
Gross profit:
Mattress Fabrics	$	10,756		$	9,456
Upholstery Fabrics		6,145			6,277
	$	16,901		$	15,733
Selling, general, and administrative expenses:
Mattress Fabrics	$	3,296		$	2,989
Upholstery Fabrics		3,652			3,813
Total segment selling, general, and
administrative expenses		6,948			6,802
Unallocated corporate expenses		2,654			2,631
	$	9,602		$	9,433
Income from operations:
Mattress Fabrics	$	7,460		$	6,467
Upholstery Fabrics		2,493			2,464
Total segment income from operations		9,953			8,931
Unallocated corporate expenses		(2,654	)		(2,631	)
Total income from operations		7,299			6,300
Interest income		15			69
Other expense		(155	)		(225	)
Income before income taxes	$	7,159		$	6,144

	Six months ended
(dollars in thousands)	October 30, 2016			November 1, 2015
Net sales:
Mattress Fabrics	$	96,057		$	93,245
Upholstery Fabrics		59,969			63,896
	$	156,026		$	157,141
Gross profit:
Mattress Fabrics	$	22,657		$	19,381
Upholstery Fabrics		12,664			12,554
	$	35,321		$	31,935
Selling, general, and administrative expenses:
Mattress Fabrics	$	6,795		$	5,912
Upholstery Fabrics		7,185			7,409
Total segment selling, general, and
administrative expenses		13,980			13,321
Unallocated corporate expenses		5,368			4,854
	$	19,348		$	18,175
Income from operations:
Mattress Fabrics	$	15,862		$	13,468
Upholstery Fabrics		5,479			5,146
Total segment income from operations		21,341			18,614
Unallocated corporate expenses		(5,368	)		(4,854	)
Total income from operations		15,973			13,760
Interest income		40			112
Other expense		(307	)		(320	)
Income before income taxes	$	15,706		$	13,552

Balance sheet information for the company’s operating segments follows:

(dollars in thousands)	October 30, 2016		November 1, 2015		May 1, 2016
Segment assets:
Mattress Fabrics
Current assets (1)	$	38,062	$	40,937	$	43,472
Non-compete agreement		866		941		903
Customer relationships		689		740		715
Goodwill		11,462		11,462		11,462
Property, plant and equipment (2)		43,228		36,050		37,480
Total mattress fabrics assets		94,307		90,130		94,032
Upholstery Fabrics
Current assets (1)		26,931		28,856		26,540
Property, plant and equipment (3)		1,480		1,474		1,564
Total upholstery fabrics assets		28,411		30,330		28,104
Total segment assets		122,718		120,460		122,136
Non-segment assets:
Cash and cash equivalents		13,910		31,176		37,787
Short-term investments		2,430		6,320		4,359
Deferred income taxes		581		3,415		2,319
Income taxes receivable		-		75		155
Other current assets		1,675		2,614		2,477
Property, plant and equipment (4)		829		795		929
Long-term investments (Held-to-Maturity)		31,050		-		-
Long-term investments (Rabbi Trust)		4,994		3,279		4,025
Other assets		940		813		955
Total assets	$	179,127	$	168,947	$	175,142

	Six months ended
(dollars in thousands)	October 30, 2016		November 1, 2015
Capital expenditures (5):
Mattress Fabrics	$	8,857	$	5,138
Upholstery Fabrics		165		254
Unallocated Corporate		62		143
Total capital expenditures	$	9,084	$	5,535
Depreciation expense:
Mattress Fabrics	$	3,101	$	2,783
Upholstery Fabrics		410		401
Total depreciation expense	$	3,511	$	3,184

(1) Current assets represent accounts receivable and inventory for the respective segment.

(2) The $43.2 million at October 30, 2016, represents property, plant, and equipment of $28.5 million and $14.7 million located in the U.S. and Canada, respectively. The $36.1 million at November 1, 2015, represents property, plant, and equipment of $23.3 million and $12.8 million located in the U.S. and Canada, respectively. The $37.5 million at May 1, 2016, represents property, plant, and equipment of $24.8 million and $12.7 million located in the U.S. and Canada, respectively.

(3) The $1.5 million at October 30, 2016, represents property, plant, and equipment of $890 and $590 located in the U.S. and China, respectively. The $1.5 million at November 1, 2015, represents property, plant, and equipment of $785 and $689 located in the U.S. and China, respectively. The $1.6 million at May 1, 2016, represents property, plant, and equipment of $893 and $671 located in the U.S. and China, respectively.

(4) The $829, $795, and $929 at October 30, 2016, November 1, 2015 and May 1, 2016, respectively, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by both the mattress and upholstery fabric segments. Property, plant, and equipment associated with corporate are located in the U.S.

(5) Capital expenditure amounts are stated on the accrual basis. See Consolidated Statements of Cash Flows for capital expenditure amounts on a cash basis.

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Income Taxes (Tables)

6 Months Ended

Oct. 30, 2016

Income Tax Disclosure [Abstract]

Summary of Differences in Income Tax Expense at Federal Income Tax Rate and Effective Income Tax Rate

The following schedule summarizes the factors that are attributable to the difference between income tax expense at the federal income tax rate and the effective income tax rate reflected in the consolidated financial statements:

	2017			2016
federal income tax rate		34.0	%		34.0	%
U.S state income tax expense		0.6			0.7
tax effects of Chinese foreign exchange gains		1.6			2.3
increase in liability for uncertain tax positions		0.3			0.3
other		1.2			0.2
		37.7	%		37.5	%

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Significant Accounting Policies (Detail) - Accounting Standards Update 2015-17 [Member] $ in Millions	Nov. 01, 2015 USD ($)
Summary Of Significant Accounting Policies [Line Items]
Increased noncurrent deferred income taxes	$ 3.0
Decreased noncurrent deferred tax liabilities	$ 4.7

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Stock-Based Compensation - Narrative (Detail) - USD ($)									3 Months Ended			6 Months Ended
	Oct. 03, 2016	Jul. 14, 2016	Oct. 01, 2015	Jul. 15, 2015	Mar. 03, 2015	Jun. 24, 2014	Jun. 25, 2013	Jul. 11, 2012	Oct. 30, 2016	Jul. 31, 2016	Aug. 02, 2015	Oct. 30, 2016	Nov. 01, 2015	Sep. 16, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options granted									0			0
2015 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common stock authorized for issuance														1,200,000
Number of shares available for future equity based grants									980,486			980,486
2007 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares available for future equity based grants														0
Performance Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Remaining unrecognized compensation cost									$ 5,000,000			$ 5,000,000
Weighted average period over which unrecognized compensation cost is expected to be recognized												2 years
Performance Based Restricted Stock Units [Member] | Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense												$ 1,500,000	$ 1,200,000
Performance Based Restricted Stock Units [Member] | Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years		3 years		3 years	3 years	3 years
Closing price of common stock		$ 28		$ 32.23		$ 17.70	$ 17.12	$ 10.21
Performance Based Restricted Stock Units [Member] | Non-employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period		3 years		3 years
Closing price of common stock												$ 28.15
Number of shares unvested					16,000
Performance Based Restricted Stock Units [Member] | Requisite Service Period for 16,000 Restricted Stock Units [Member] | Non-employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period					28 months
Performance Based Restricted Stock Units [Member] | Fiscal Year 2015 [Member] | Non-employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vested										12,000
Weighted average fair value of vested shares										$ 345,000
Weighted average fair value of vested shares, per share										$ 28.77
Performance Based Restricted Stock Units [Member] | Fiscal Year 2014 [Member] | Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vested										37,192
Weighted average fair value of vested shares										$ 637,000
Weighted average fair value of vested shares, per share										$ 17.12
Performance Based Restricted Stock Units [Member] | Fiscal Year 2013 [Member] | Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vested											115,855
Weighted average fair value of vested shares											$ 1,200,000
Weighted average fair value of vested shares, per share											$ 10.21
Performance Based Restricted Stock Units [Member] | Maximum [Member] | Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares granted		107,880		107,554		102,845	72,380	120,000
Performance Based Restricted Stock Units [Member] | Maximum [Member] | Non-employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares granted		11,549		10,364	28,000
Incentive Stock Option Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of options to purchase common stock outstanding									81,600			81,600
Number of options exercisable									81,600			81,600
Weighted average exercise price for options outstanding									$ 8.44			$ 8.44
Weighted average exercise price for options exercisable									$ 8.44			$ 8.44
Weighted average contractual term for options outstanding												9 months 18 days
Weighted average contractual term for options exercisable												9 months 18 days
Aggregate intrinsic value for options outstanding									$ 1,600,000			$ 1,600,000
Aggregate intrinsic value for options exercisable									$ 1,600,000			1,600,000
Aggregate intrinsic value for options exercised												$ 43,000	1,000,000
Number of unvested stock option									0			0
Unrecognized stock based compensation cost									$ 0			$ 0
Share-based compensation expense												0	0
Common Stock Awards [Member] | Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense												$ 143,000	95,000
Common Stock Awards [Member] | Outside Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares granted	4,800		3,000
Vesting period	0 days		0 days
Closing price of common stock	$ 29.80		$ 31.77
Time Vested Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense													$ 0
Vesting period												7 months 15 days
Unrecognized stock based compensation cost									$ 23,000			$ 23,000
Time Vested Restricted Stock Units [Member] | Selling, General and Administrative Expenses [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense												$ 11,000
Time Vested Restricted Stock Units [Member] | Employee [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum number of shares granted		1,200											0
Vesting period		11 months
Closing price of common stock		$ 28

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Accounts Receivable (Detail) - USD ($) $ in Thousands	Oct. 30, 2016	May 01, 2016		Nov. 01, 2015	May 03, 2015
Accounts, Notes, Loans and Financing Receivable [Line Items]
Customers	$ 20,580	$ 25,531		$ 25,045
Accounts receivable, net	19,039	23,481	[1]	23,314
Allowance for doubtful accounts [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Valuation allowance, balance	(420)	(1,088)		(826)	$ (851)
Reserve for returns and allowances and discounts [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Valuation allowance, balance	$ (1,121)	$ (962)		$ (905)	$ (738)

[1] Derived from audited financial statements.

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Accounts Receivable - Allowance for Doubtful Accounts (Detail) - Allowance for doubtful accounts [Member] - USD ($) $ in Thousands	6 Months Ended
	Oct. 30, 2016	Nov. 01, 2015
Valuation and Qualifying Accounts Disclosure [Line Items]
Beginning balance	$ (1,088)	$ (851)
Provision for bad debts	216	(81)
Net write-offs, net of recoveries	452	106
Ending balance	$ (420)	$ (826)

XML

Accounts Receivable - Allowance for Returns and Allowances and Discounts Accounts (Detail) - Reserve for returns and allowances and discounts [Member] - USD ($) $ in Thousands	6 Months Ended
	Oct. 30, 2016	Nov. 01, 2015
Valuation and Qualifying Accounts Disclosure [Line Items]
Beginning balance	$ (962)	$ (738)
Provision for returns, allowances and discounts	(1,620)	(1,561)
Credits issued	1,461	1,394
Ending balance	$ (1,121)	$ (905)

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Inventories (Detail) - USD ($) $ in Thousands	Oct. 30, 2016	May 01, 2016		Nov. 01, 2015
Inventory Disclosure [Abstract]
Raw materials	$ 6,128	$ 5,462		$ 6,272
Work-in-process	2,518	2,972		2,779
Finished goods	37,308	38,097		37,428
Inventories	$ 45,954	$ 46,531	[1]	$ 46,479

[1] Derived from audited financial statements.

XML

Other Assets (Detail) - USD ($) $ in Thousands	Oct. 30, 2016	May 01, 2016		Nov. 01, 2015
Other Assets, Noncurrent [Abstract]
Cash surrender value - life insurance	$ 358	$ 357		$ 339
Non-compete agreement, net	866	903		941
Customer relationships, net	689	715		740
Other	582	598		474
Other assets	$ 2,495	$ 2,573	[1]	$ 2,494

[1] Derived from audited financial statements.

XML

Other Assets - Narrative (Detail)	6 Months Ended
	Oct. 30, 2016 USD ($) Contract	Nov. 01, 2015 USD ($) Contract	May 01, 2016 USD ($) Contract
Other Assets [Line Items]
Gross carrying amount of non-compete agreement	$ 2,000,000	$ 2,000,000	$ 2,000,000
Gross carrying amount of customer relationships	$ 868,000	$ 868,000	$ 868,000
Number of life insurance contracts owned | Contract	1	1	1
Life insurance contracts, death benefits to insured	$ 1,400,000	$ 1,400,000	$ 1,400,000
Life insurance contracts, cash surrender value	$ 358,000	339,000	357,000
Non-compete Agreement [Member]
Other Assets [Line Items]
Useful life	15 years
Accumulated amortization	$ 1,200,000	1,100,000	1,100,000
Amortization expense	38,000	38,000
Remaining amortization expense for the fiscal year	37,000
Remaining amortization expense for the second fiscal year	75,000
Remaining amortization expense for the third fiscal year	75,000
Remaining amortization expense for the fourth fiscal year	75,000
Remaining amortization expense for the fifth fiscal year	75,000
Remaining amortization expense for the fiscal year thereafter	$ 529,000
Weighted average remaining amortization period	11 years 6 months
Customer Relationships [Member]
Other Assets [Line Items]
Useful life	17 years
Accumulated amortization	$ 179,000	128,000	$ 153,000
Amortization expense	26,000	$ 26,000
Remaining amortization expense for the fiscal year	25,000
Remaining amortization expense for the second fiscal year	51,000
Remaining amortization expense for the third fiscal year	51,000
Remaining amortization expense for the fourth fiscal year	51,000
Remaining amortization expense for the fifth fiscal year	51,000
Remaining amortization expense for the fiscal year thereafter	$ 460,000
Weighted average remaining amortization period	13 years 6 months

XML

Accrued Expenses (Detail) - USD ($) $ in Thousands	Oct. 30, 2016	May 01, 2016		Nov. 01, 2015
Payables and Accruals [Abstract]
Compensation, commissions and related benefits	$ 7,111	$ 10,011		$ 6,657
Advertising rebates	734	870		2,536
Interest	5
Other accrued expenses	1,028	1,041		702
Accrued expenses	$ 8,878	$ 11,922	[1]	$ 9,895

[1] Derived from audited financial statements.

XML

Lines of Credit - Narrative (Detail)	6 Months Ended
	Oct. 30, 2016 USD ($)	May 15, 2018 USD ($)	Feb. 01, 2018 USD ($)	Nov. 01, 2017 USD ($)	Aug. 01, 2017 USD ($)	Oct. 30, 2016 CNY (¥)	Aug. 03, 2016 USD ($)	Aug. 01, 2016 USD ($)	May 01, 2016 USD ($)	Nov. 01, 2015 USD ($)
United States [Member] | Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 30,000,000
Interest rate description	Interest was charged at a rate as a variable spread over LIBOR based on our ratio of debt to EBITDA.
Applicable interest rate at end of period	1.98%					1.98%
Expiration date	Aug. 15, 2018
Reference rate on which the interest rate is based	LIBOR
Percentage of common stock in subsidiary pledge as collateral	65.00%
Outstanding amount	$ 0								$ 0	$ 0
Letters of credit, outstanding amount	250,000								250,000	250,000
China [Member] | Revolving credit agreement [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 5,900,000					¥ 40,000,000
Interest rate description	This agreement has an interest rate determined by the Chinese government
Expiration date	Mar. 08, 2017
Outstanding amount	$ 0					¥ 0			$ 0	$ 0
Third Amendment to Credit Agreement [Member] | United States [Member]
Line of Credit Facility [Line Items]
Maximum amount of letters of credit								$ 7,500,000
Letters of credit outstanding, additional amount							$ 5,000,000
Third Amendment to Credit Agreement [Member] | United States [Member] | Scenario, Forecast [Member]
Line of Credit Facility [Line Items]
Amount of the required periodic reduction applied to principal		$ 1,250,000	$ 1,250,000	$ 1,250,000	$ 1,250,000

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Fair Value of Financial Instruments - Recurring Basis (Detail) - USD ($) $ in Thousands	Oct. 30, 2016	May 01, 2016	Nov. 01, 2015
Cash and Cash Equivalents [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	$ 23,940
U.S. Corporate Bonds [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	7,110
Premier Money Market Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	4,421	$ 3,404	$ 2,703
Low Duration Bond Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	1,075	1,604	2,098
Intermediate Term Bond Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	750	1,154	2,144
Strategic Income Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	605	999	984
Limited Term Bond Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis		602	1,094
Large Blend Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	319	289	279
Growth Allocation Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	102	148	125
Mid Cap Value Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis		102	94
Other [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	152	82	78
Quoted prices in active markets for identical assets - Level 1 [Member] | Cash and Cash Equivalents [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	23,940
Quoted prices in active markets for identical assets - Level 1 [Member] | Premier Money Market Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	4,421	3,404	2,703
Quoted prices in active markets for identical assets - Level 1 [Member] | Low Duration Bond Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	1,075	1,604	2,098
Quoted prices in active markets for identical assets - Level 1 [Member] | Intermediate Term Bond Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	750	1,154	2,144
Quoted prices in active markets for identical assets - Level 1 [Member] | Strategic Income Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	605	999	984
Quoted prices in active markets for identical assets - Level 1 [Member] | Limited Term Bond Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis		602	1,094
Quoted prices in active markets for identical assets - Level 1 [Member] | Large Blend Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	319	289	279
Quoted prices in active markets for identical assets - Level 1 [Member] | Growth Allocation Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	102	148	125
Quoted prices in active markets for identical assets - Level 1 [Member] | Mid Cap Value Fund [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis		102	94
Quoted prices in active markets for identical assets - Level 1 [Member] | Other [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	152	$ 82	$ 78
Significant other observable inputs - Level 2 [Member] | U.S. Corporate Bonds [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Assets measured at fair value on a recurring basis	$ 7,110

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Fair Value of Financial Instruments - Narrative (Detail) - USD ($)		3 Months Ended	12 Months Ended
	Nov. 03, 2016	Oct. 30, 2016	May 01, 2016		Nov. 01, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Short-term investments		$ 2,430,000	$ 4,359,000	[1]	$ 6,320,000
Held to maturity investments		31,050,000
Long-term investments (Rabbi Trust)		$ 4,994,000	4,025,000	[1]	3,279,000
Minimum [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term investments, maturity period		2 years
Maximum [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term investments, maturity period		2 years 6 months
Subsequent Event [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Purchases of U.S. Corporate bonds	$ 23,900,000
Short-term Investments [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Accumulated unrealized gain (loss) on long-term investments		$ (45,000)	(100,000)		(171,000)
Cash and Cash Equivalents [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Held to maturity investments		23,900,000
U.S. Corporate Bonds [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Held to maturity investments		7,100,000
Long-term investments (Rabbi Trust) [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Accumulated unrealized gain (loss) on long-term investments		$ 1,000			$ 14,000
Accumulated realized loss on long-term investments			$ 44,000

[1] Derived from audited financial statements.

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Cash Flow Information - Interest and Income Taxes Paid (Detail) - USD ($) $ in Thousands	6 Months Ended
	Oct. 30, 2016	Nov. 01, 2015
Supplemental Cash Flow Elements [Abstract]
Interest	$ 45	$ 86
Income taxes	$ 3,238	$ 2,088

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Cash Flow Information - Narrative (Detail) - USD ($)	6 Months Ended
	Oct. 30, 2016	Nov. 01, 2015
Supplemental Cash Flow Elements [Abstract]
Interest costs	$ 45,000	$ 49,000
Interest cost capitalized	$ 45,000	$ 49,000

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Net Income Per Share - Weighted Average Shares (Detail) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Oct. 30, 2016	Nov. 01, 2015	Oct. 30, 2016	Nov. 01, 2015
Earnings Per Share [Abstract]
Weighted average common shares outstanding, basic	12,308	12,343	12,297	12,310
Dilutive effect of stock-based compensation	199	141	198	171
Weighted average common shares outstanding, diluted	12,507	12,484	12,495	12,481

XML

Segment Information - Narrative (Detail)	6 Months Ended
	Oct. 30, 2016 Segment
Segment Reporting [Abstract]
Number of business segments	2

XML

Segment Information - Financial Information for Operating Segments (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Oct. 30, 2016	Nov. 01, 2015	Oct. 30, 2016	Nov. 01, 2015
Segment Reporting Information [Line Items]
Net sales	$ 75,343	$ 76,956	$ 156,026	$ 157,141
Gross profit	16,901	15,733	35,321	31,935
Selling, general, and administrative expenses	9,602	9,433	19,348	18,175
income from operations	7,299	6,300	15,973	13,760
Interest income	15	69	40	112
Other expense	(155)	(225)	(307)	(320)
Income before income taxes	7,159	6,144	15,706	13,552
Operating Segments [Member]
Segment Reporting Information [Line Items]
Selling, general, and administrative expenses	6,948	6,802	13,980	13,321
income from operations	9,953	8,931	21,341	18,614
Operating Segments [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
Net sales	45,527	45,436	96,057	93,245
Gross profit	10,756	9,456	22,657	19,381
Selling, general, and administrative expenses	3,296	2,989	6,795	5,912
income from operations	7,460	6,467	15,862	13,468
Operating Segments [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Net sales	29,816	31,520	59,969	63,896
Gross profit	6,145	6,277	12,664	12,554
Selling, general, and administrative expenses	3,652	3,813	7,185	7,409
income from operations	2,493	2,464	5,479	5,146
Unallocated corporate [Member]
Segment Reporting Information [Line Items]
Selling, general, and administrative expenses	2,654	2,631	5,368	4,854
income from operations	$ (2,654)	$ (2,631)	$ (5,368)	$ (4,854)

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Segment Information - Balance Sheet Information by Operating Segments (Detail) - USD ($) $ in Thousands		6 Months Ended
		Oct. 30, 2016	Nov. 01, 2015	May 01, 2016		May 03, 2015
Segment Reporting Information [Line Items]
Non-compete agreement		$ 866	$ 941	$ 903
Customer relationships		689	740	715
Goodwill		11,462	11,462	11,462	[1]
Property, plant and equipment		45,537	38,319	39,973	[1]
Total assets		179,127	168,947	175,142	[1]
Cash and cash equivalents		13,910	31,176	37,787	[1]	$ 29,725
Short-term investments		2,430	6,320	4,359	[1]
Deferred income taxes		581	3,415	2,319	[1]
Income taxes receivable			75	155	[1]
Other current assets		1,675	2,614	2,477	[1]
Long-term investments (Held-to-Maturity)		31,050
Long-term investments (Rabbi Trust)		4,994	3,279	4,025	[1]
Other assets		2,495	2,494	2,573	[1]
Capital expenditures	[2]	9,084	5,535
Depreciation expense		3,511	3,184
Unallocated corporate [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment	[3]	829	795	929
Cash and cash equivalents		13,910	31,176	37,787
Short-term investments		2,430	6,320	4,359
Deferred income taxes		581	3,415	2,319
Income taxes receivable			75	155
Other current assets		1,675	2,614	2,477
Long-term investments (Held-to-Maturity)		31,050
Long-term investments (Rabbi Trust)		4,994	3,279	4,025
Other assets		940	813	955
Capital expenditures		62	143
Operating Segments [Member]
Segment Reporting Information [Line Items]
Total assets		122,718	120,460	122,136
Operating Segments [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
Current assets	[4]	38,062	40,937	43,472
Non-compete agreement		866	941	903
Customer relationships		689	740	715
Goodwill		11,462	11,462	11,462
Property, plant and equipment	[5]	43,228	36,050	37,480
Total assets		94,307	90,130	94,032
Capital expenditures		8,857	5,138
Depreciation expense		3,101	2,783
Operating Segments [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Current assets	[4]	26,931	28,856	26,540
Property, plant and equipment	[6]	1,480	1,474	1,564
Total assets		28,411	30,330	$ 28,104
Capital expenditures		165	254
Depreciation expense		$ 410	$ 401

[1] Derived from audited financial statements.

[2] Capital expenditure amounts are stated on the accrual basis. See Consolidated Statements of Cash Flows for capital expenditure amounts on a cash basis.

[3] The $829, $795, and $929 at October 30, 2016, November 1, 2015 and May 1, 2016, respectively, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by both the mattress and upholstery fabric segments. Property, plant, and equipment associated with corporate are located in the U.S.

[4] Current assets represent accounts receivable and inventory for the respective segment.

[5] The $43.2 million at October 30, 2016, represents property, plant, and equipment of $28.5 million and $14.7 million located in the U.S. and Canada, respectively. The $36.1 million at November 1, 2015, represents property, plant, and equipment of $23.3 million and $12.8 million located in the U.S. and Canada, respectively. The $37.5 million at May 1, 2016, represents property, plant, and equipment of $24.8 million and $12.7 million located in the U.S. and Canada, respectively.

[6] The $1.5 million at October 30, 2016, represents property, plant, and equipment of $890 and $590 located in the U.S. and China, respectively. The $1.5 million at November 1, 2015, represents property, plant, and equipment of $785 and $689 located in the U.S. and China, respectively. The $1.6 million at May 1, 2016, represents property, plant, and equipment of $893 and $671 located in the U.S. and China, respectively.

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Segment Information - Balance Sheet Information by Operating Segments (Parenthetical) (Detail) - USD ($) $ in Thousands		Oct. 30, 2016	May 01, 2016		Nov. 01, 2015
Segment Reporting Information [Line Items]
Property, plant and equipment		$ 45,537	$ 39,973	[1]	$ 38,319
United States [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		28,500	24,800		23,300
United States [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		890	893		785
Canada [Member] | Mattress Fabrics [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		14,700	12,700		12,800
China [Member] | Upholstery Fabrics [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment		590	671		689
Unallocated corporate [Member]
Segment Reporting Information [Line Items]
Property, plant and equipment	[2]	$ 829	$ 929		$ 795

[1] Derived from audited financial statements.

[2] The $829, $795, and $929 at October 30, 2016, November 1, 2015 and May 1, 2016, respectively, represent property, plant, and equipment associated with unallocated corporate departments and corporate departments shared by both the mattress and upholstery fabric segments. Property, plant, and equipment associated with corporate are located in the U.S.

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Income Taxes - Effective Income Tax Rate - Narrative (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Oct. 30, 2016	Nov. 01, 2015	Oct. 30, 2016	Nov. 01, 2015
Income Tax Disclosure [Abstract]
Income taxes	$ 2,684	$ 2,373	$ 5,917	$ 5,081
Effective income tax rate			37.70%	37.50%

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Income Taxes - Differences Between Income Tax Expense at Federal Income Tax Rate and Effective Income Tax Rate (Detail)	6 Months Ended
	Oct. 30, 2016	Nov. 01, 2015
Income Tax Disclosure [Abstract]
federal income tax rate	34.00%	34.00%
U.S state income tax expense	0.60%	0.70%
tax effects of Chinese foreign exchange gains	1.60%	2.30%
increase in liability for uncertain tax positions	0.30%	0.30%
other	1.20%	0.20%
Effective income tax rate	37.70%	37.50%

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Income Taxes - Deferred Income Taxes - Valuation Allowance - Narrative (Detail) - USD ($)	Oct. 30, 2016	May 01, 2016	Nov. 01, 2015
U.S. Tax Authorities and Poland Tax Authorities [Member] | Valuation Allowance, Operating Loss Carryforwards [Member]
Income Taxes [Line Items]
Valuation allowance	$ 603,000	$ 590,000	$ 938,000
U.S. State Tax [Member] | Valuation Allowance, Operating Loss Carryforwards [Member]
Income Taxes [Line Items]
Valuation allowance	519,000	518,000	561,000
Poland [Member] | Valuation Allowance, Operating Loss Carryforwards [Member] | Culp Europe [Member]
Income Taxes [Line Items]
Valuation allowance	84,000	72,000	377,000
Canada and China [Member]
Income Taxes [Line Items]
Valuation allowance	$ 0	$ 0	$ 0

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Income Taxes - Deferred Income Taxes - Undistributed Earnings - Narrative (Detail) - USD ($)	6 Months Ended		12 Months Ended
	Oct. 30, 2016	Nov. 01, 2015	May 01, 2016
Income Tax Disclosure [Abstract]
Undistributed earnings from our foreign subsidiaries that will not be reinvested indefinitely	$ 138,900,000	$ 93,200,000	$ 129,600,000
Deferred tax liability, undistributed earnings from foreign subsidiaries	657,000	2,400,000	604,000
U.S. income and foreign withholding taxes	41,400,000	35,700,000	38,500,000
U.S. foreign income tax credits	$ 40,700,000	$ 33,300,000	$ 37,900,000

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Income Taxes - Deferred Income Taxes - Narrative (Detail) - USD ($) $ in Thousands	Oct. 30, 2016	May 01, 2016		Nov. 01, 2015
Income Taxes [Line Items]
Non-current deferred tax asset	$ 581	$ 2,319	[1]	$ 3,415
Non-current deferred tax liability	1,699	1,483	[1]	1,206
U.S. Tax Authorities [Member]
Income Taxes [Line Items]
Non-current deferred tax asset	109	1,700		2,500
China [Member]
Income Taxes [Line Items]
Non-current deferred tax asset	472	572		898
Canada [Member]
Income Taxes [Line Items]
Non-current deferred tax liability	$ 1,700	$ 1,500		$ 1,200

[1] Derived from audited financial statements.

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Income Taxes - Uncertainty in Income Taxes - Narrative (Detail) - USD ($) $ in Millions	1 Months Ended	6 Months Ended
	Dec. 09, 2016	Oct. 30, 2016	May 01, 2016	Nov. 01, 2015
Income Taxes [Line Items]
Unrecognized tax benefits		$ 15.1	$ 14.9	$ 14.2
Unrecognized tax benefits that would favorably impact effective income tax rate if recognized		3.7	3.8	3.7
Unrecognized tax benefits for which significant change is reasonably possible		$ 15.1
Canadian Federal Returns [Member]
Income Taxes [Line Items]
Statute of limitations for 2009 income tax, expiration month and year		2017-01
Canadian Federal Returns [Member] | Minimum [Member]
Income Taxes [Line Items]
Income tax returns, years subject to examination		2009
Canadian Provincial (Quebec) Returns [Member]
Income Taxes [Line Items]
Statute of limitations for 2009 income tax, expiration month and year		2017-04
Canadian Provincial (Quebec) Returns [Member] | Minimum [Member]
Income Taxes [Line Items]
Income tax returns, years subject to examination		2009
China Income Tax Returns [Member] | Minimum [Member]
Income Taxes [Line Items]
Income tax returns, years subject to examination		2011
Internal Revenue Service (IRS) [Member]
Income Taxes [Line Items]
Income tax examination, year under examination		2014
Subsequent Event [Member] | Canadian Provincial (Quebec) Returns [Member] | Minimum [Member]
Income Taxes [Line Items]
Income tax examination, year under examination	2013
Subsequent Event [Member] | Canadian Provincial (Quebec) Returns [Member] | Maximum [Member]
Income Taxes [Line Items]
Income tax examination, year under examination	2015
United States Federal and State Income Tax [Member] | Minimum [Member]
Income Taxes [Line Items]
Income tax returns, years subject to examination		2005
Non-current Deferred Income Taxes [Member]
Income Taxes [Line Items]
Unrecognized tax benefits		$ 11.4	11.1	10.5
Income Taxes Payable - Long-Term [Member]
Income Taxes [Line Items]
Unrecognized tax benefits		$ 3.7	$ 3.8	$ 3.7

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Statutory Reserves (Detail) - Subsidiaries [Member] - China [Member] $ in Millions	6 Months Ended
	Oct. 30, 2016 USD ($)
Statutory Reserve [Line Items]
Percentage of net income required to be transferred to a statutory surplus reserve fund	10.00%
Maximum required percentage of statutory surplus reserve fund to registered capital	50.00%
Statutory surplus reserve fund balance	$ 4.6
Percentage of accumulated earnings and profits determined in accordance with PRC accounting rules and regulations	10.00%
Minimum threshold percentage for statutory surplus reserve fund as percentage of registered capital, below which certain capital transactions are prohibited	25.00%

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Commitments and Contingencies (Detail) - Mattress Fabrics [Member] - Capital Addition Purchase Commitments [Member] - USD ($)		6 Months Ended	12 Months Ended
	May 16, 2016	Oct. 30, 2016	May 01, 2016	Nov. 01, 2015
Commitments and Contingencies Disclosure [Line Items]
Open purchase commitments		$ 9,800,000	$ 10,600,000	$ 1,900,000
Buildings and Improvements [Member]
Commitments and Contingencies Disclosure [Line Items]
Open purchase commitments		6,100,000	$ 9,300,000
Contractual obligation	$ 11,200,000	6,100,000
Payments on construction of the building	1,900,000	5,100,000
Contractual obligation due in fiscal 2017	4,300,000	1,100,000
Contractual obligation due in fiscal 2018	3,800,000	3,800,000
Contractual obligation due in fiscal 2019	1,200,000	$ 1,200,000
Buildings and Improvements [Member] | London Interbank Offered Rate (LIBOR) [Member]
Commitments and Contingencies Disclosure [Line Items]
Percentage rate added to variable rate		2.25%
Variable interest rate		30 day LIBOR rate
Buildings and Improvements [Member] | Letter of Credit [Member]
Commitments and Contingencies Disclosure [Line Items]
Letter of credit	$ 5,000,000
Unused fee calculated on letter of credit	0.10%

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Common Stock Repurchase Program (Detail) - Common Stock - USD ($)	6 Months Ended		12 Months Ended
	Oct. 30, 2016	Nov. 01, 2015	May 01, 2016	Jun. 15, 2016
Stockholders Equity Note [Line Items]
Common stock repurchased			100,776
Common Stock Repurchase Program June 15, 2016 [Member]
Stockholders Equity Note [Line Items]
Authorization amount for repurchase of common stock				$ 5,000,000
Common stock repurchased	0	0
Remaining authorized repurchase amount	$ 5,000,000

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Dividend Program (Detail) - USD ($) $ / shares in Units, $ in Thousands		6 Months Ended
	Dec. 01, 2016	Oct. 30, 2016	Nov. 01, 2015
Dividends [Line Items]
Cash dividends paid		$ 4,307	$ 6,417
Special Dividend [Member]
Dividends [Line Items]
Cash dividends paid		$ 2,500	$ 5,000
Cash dividend payment, per share		$ 0.21	$ 0.40
Quarterly Dividend [Member]
Dividends [Line Items]
Cash dividends paid		$ 1,800	$ 1,400
Cash dividend payment, per share		$ 0.07	$ 0.06
Subsequent Event [Member] | Quarterly Dividend [Member]
Dividends [Line Items]
Increase in cash dividend, percentage	14.00%
Cash dividend declared, per share	$ 0.08
Cash dividend declared, payment date	Jan. 17, 2017
Cash dividend declared, date of record	Jan. 03, 2017