FORM 11K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
ANNUAL REPORT
Pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2001
COMMISSION FILE NO. 0-12781
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
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CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
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B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
CULP, INC.
101 SOUTH MAIN STREET
P.O. BOX 2686
HIGH POINT, NORTH CAROLINA 27261-2686
There were no material changes in the Plan or the Investment
Policy of the Plan. Culp, Inc. has made no profit sharing contributions
during the past five years. The approximate number of employees
participating in the Plan at December 31, 2001 was 2,300. The Retirement
Committee administers the Plan, and its members are Franklin N. Saxon,
Kenneth M. Ludwig and Robert G. Culp, III, all employees of Culp, Inc.
Financial Statements and Exhibits.
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(a) Financial Statements. A list of all financial statements
filed as part of this report, beginning on page 1, is set forth below:
Financial Statement Page of Report
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Independent Auditors' Report 1
Statements of Net Assets Available
for Plan Benefits 2
Statements of Changes in Net Assets
Available for Plan Benefits 3
Notes to Financial Statements 4
(b) Exhibits. No exhibits are filed with this annual report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the plan administrator has duly caused this annual report to be signed by the
undersigned thereunto duly authorized.
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
By: Culp, Inc. Plan Administrator
By: The Culp, Inc. Retirement Committee
Date: June 28, 2002
Robert G. Culp, III
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Franklin N. Saxon
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Kenneth M. Ludwig
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Page 1
INDEPENDENT AUDITORS' REPORT
To the Retirement Committee of the
Culp, Inc. Employees' Retirement Builder Plan
High Point, North Carolina
We have audited the accompanying statements of net assets available for plan
benefits of the Culp, Inc. Employees' Retirement Builder Plan as of December
31, 2001 and 2000 and the related statements of changes in net assets
available for plan benefits for each of the years in the three year period
ended December 31, 2001. These financial statements are the responsibility
of the Plan Administrator. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the
Culp, Inc. Employees' Retirement Builder Plan as of December 31, 2001 and
2000 and the changes in its net assets available for plan benefits for each
of the years in the three year period ended December 31, 2001 in conformity
with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule presented
on page 8 includes information which is presented for the purpose of
complying with the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974 and
is not a required part of the basic financial statements. The supplemental
information has been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, is fairly
stated, in all material respects, in relation to the basic financial
statements taken as a whole.
Dixon Odom PLLC
May 13, 2002
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
December 31, 2001 and 2000
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ASSETS 2001 2000
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Investments, at fair value $30,855,428 $ 31,602,248
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Receivables
Employer contributions 167,193 190,920
Employee contributions 258,219 299,463
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425,412 490,383
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Cash 3,649 -
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TOTAL ASSETS 31,284,489 32,092,631
LIABILITIES
Accounts payable 687 924
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NET ASSETS AVAILABLE
FOR PLAN BENEFITS $31,283,802 $ 32,091,707
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See accompanying notes. Page 2
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
Years Ended December 31, 2001, 2000 and 1999
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2001 2000 1999
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ADDITIONS TO NET ASSETS ATTRIBUTED TO
Investment income (loss)
Net income from investment in
common trust funds $ 736,876 $ 744,413 $ 550,632
Net income (loss) from investment
in registered investment company funds (2,153,575) (901,894) 2,211,280
Appreciation (depreciation) in fair
value of Culp, Inc. stock fund 1,052,504 (2,273,253) (781,232)
Interest income from participant
loan fund - 85 232
Increase in cash surrender value
of life insurance - - 51,789
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(364,195) (2,430,649) 2,032,701
Contributions
Employer 2,030,704 2,380,830 2,398,858
Employee 3,192,956 3,758,942 3,719,681
Direct rollovers 15,758 82,835 99,327
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TOTAL ADDITIONS 4,875,223 3,791,958 8,250,567
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DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO
Benefits paid to participants 5,499,417 3,179,149 2,777,904
Insurance expense 6,134 8,133 -
Trustee fees 133,067 65,048 53,553
Administrative fees 44,510 98,794 98,931
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TOTAL DEDUCTIONS 5,683,128 3,351,124 2,930,388
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NET INCREASE (DECREASE) (807,905) 440,834 5,320,179
NET ASSETS AVAILABLE FOR
PLAN BENEFITS
Beginning of year 32,091,707 31,650,873 26,330,694
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END OF YEAR $31,283,802 $32,091,707 $31,650,873
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See accompanying notes. Page 3
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001, 2000 and 1999
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NOTE A - SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Plan are prepared using the accrual method of
accounting.
Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires the plan administrator to make estimates and
assumptions that affect certain reported amounts and disclosures. Accordingly,
actual results may differ from those estimates.
Valuation of Investments and Income Recognition
Investments in common trust funds are stated at fair value based on the values
of the respective instruments held by each fund as determined by the quoted
market prices on the last day of the plan year. Investments in common stocks are
stated at fair value as determined by the quoted market prices on the last day
of the plan year. Shares of registered investment companies are valued at quoted
market prices which represent the net asset values of shares held.
Purchases and sales of investments are reported on a trade date basis. Income
from investments is reported as earned on the accrual basis. Dividends are
recorded on the ex-dividend date.
Payment of Benefits
Benefits are recorded when paid.
NOTE B - DESCRIPTION OF PLAN
The following description of the Culp, Inc. Employees' Retirement Builder Plan
(the "Plan") provides only general information. Participants should refer to the
summary plan description for a more complete description of the Plan's
provisions.
General
The Plan is a defined contribution plan covering all full-time employees of
Culp, Inc. (the "Company") and its subsidiaries who have one year of service and
are age twenty-one or older. It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
Page 4
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001, 2000 and 1999
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NOTE B - DESCRIPTION OF PLAN (Continued)
Contributions
The Plan was established in 1982 as a profit-sharing plan to which contributions
determined by the Board of Directors of Culp, Inc. could be made on a
discretionary basis. No profit-sharing contributions were made during 2001, 2000
or 1999.
In January 1999, the Plan was amended to include safe harbor provisions.
Participants may contribute from 2% to 15% of their annual compensation as
401(k) contributions. The Company made matching contributions equal to 100% of
the participant's contribution up to the first 3% of annual compensation plus
50% of the next 2% of compensation. Participants may elect to have contributions
invested in 1% increments in a value fund, a stable investment fund, a Culp,
Inc. stock fund, an equity growth fund, an insurance fund or a balanced fund.
Contributions are subject to certain limitations. Effective August 31, 2001,
participants may no longer invest in life insurance policies.
Participant Accounts
Each participant's account is credited with the participant's contribution and
an allocation of (a) the Company's contribution and (b) Plan earnings, and
charged with an allocation of administrative expenses. Allocations are based on
participant earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
Vesting
Participants are immediately vested in their profit-sharing accounts and their
401(k) contributions, including the matching contributions from the Company and
actual earnings thereon.
Payment of Benefits
On termination of service, death, disability or retirement, a participant may
elect to receive either a lump-sum distribution or monthly or annual
installments over a term not to exceed the lesser of fifteen years or life
expectancy of the participant and the designated beneficiary. Life insurance
purchased through the Plan may be either converted to cash or transferred to the
participant.
Participant Loans
Effective August 1, 1998, Culp, Inc. amended the Plan to allow existing loan
balances from Artee Industries, Inc. to enter the Plan. No new loans may be
established under this amendment. As of December 31, 1999, there was one loan
outstanding with a balance of $1,827. The loan was repaid in 2000.
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CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001, 2000 and 1999
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NOTE C - INVESTMENTS
The following table presents the fair value of investments at December 31, 2001
and 2000. Investments that represent 5% or more of the Plan's net assets are
separately identified.
2001 2000
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Investments at fair value as determined by quoted
market price:
Common trust funds:
First Union Stable Investment Fund $14,087,230 $ 12,543,801
Registered investment company funds:
Evergreen Select Balanced Fund 5,121,896 6,887,310
Evergreen Stock Selector Fund 4,970,339 7,237,316
American Century Equity Growth Fund 4,082,390 3,722,283
Culp, Inc. common stock 2,551,283 1,155,651
Insurance policies 42,290 55,887
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$30,855,428 $ 31,602,248
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The Plan's investments (including gains and losses on investments bought and
sold, as well as held during the year) appreciated (depreciated) in value as
follows:
2001 2000 1999
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Common trust funds:
First Union Stable Investment Fund $ 736,876 $ 744,413 $ 550,632
Registered investment company funds:
Evergreen Select Balanced Fund (703,325) 97,901 799,936
Evergreen Stock Selector Fund (964,354) (582,474) 1,177,045
American Century Equity Growth Fund (485,896) (417,321) 234,299
Culp, Inc. common stock 1,052,504 (2,273,253) (781,232)
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$(364,195) $(2,430,734) $1,980,680
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NOTE D - PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA.
Page 6
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2001, 2000 and 1999
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NOTE E - INCOME TAX STATUS
The Plan obtained its last determination letter on June 15, 1995, in which the
Internal Revenue Service stated that the Plan, as then designed, constituted a
qualified trust under Section 401(a) of the Internal Revenue Code and is
therefore exempt from federal income taxes under provisions of Section 501. The
Plan has been amended since receiving the determination letter. However, the
plan administrator and the Plan's tax counsel believe that the Plan is designed
and currently being operated in compliance with the applicable requirements of
the Internal Revenue Code. Therefore, they believe that the Plan was qualified
and the related trust was tax-exempt as of the financial statement dates.
NOTE F - RELATED PARTY TRANSACTIONS
Certain plan investments are shares of mutual funds managed by First Union
National Bank. First Union National Bank is the trustee as defined by the Plan
and, therefore, these transactions qualify as party-in-interest.
Page 7