UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
Pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2007
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.
1823 EASTCHESTER DRIVE
HIGH POINT, NORTH CAROLINA 27265
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 number of participants in the Plan at December 31, 2007 was 670. The
Retirement Committee administers the Plan, and its members are Franklin N.
Saxon, Kenneth R. Bowling, and Teresa A. Huffman, 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 Statements Page of Report
-------------------- --------------
Report of Independent Registered 1
Public Accounting Firm
Statements of Net Assets Available 2
for Benefits
Statements of Changes in Net Assets 3
Available for Benefits
Notes to Financial Statements 4
Schedule of Assets (Held at End of Year) 8
(b) Exhibit
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Exhibit 23 - Consent of Independent Registered Public
Accounting Firm
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the plan administrator has duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
By: Culp, Inc., Plan Administrator
By: The Culp, Inc. Retirement Committee
Date: June 24, 2008
/s/ Franklin N. Saxon
---------------------
Franklin N. Saxon
/s/ Kenneth R. Bowling
----------------------
Kenneth R. Bowling
/s/ Teresa A. Huffman
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Teresa A. Huffman
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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 benefits
of the Culp, Inc. Employees' Retirement Builder Plan as of December 31, 2007 and
2006 and the related statements of changes in net assets available for benefits
for each of the years in the three-year period ended December 31, 2007. 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 the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. We were not engaged to perform an
audit of the Plan's internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Plan's
internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, 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, 2007 and 2006 and the
changes in its net assets available for plan benefits for each of the years in
the three-year period ended December 31, 2007 in conformity with accounting
principles generally accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of assets (held
at end of year) at December 31, 2007 is presented for the purpose of additional
analysis and is not a required part of the basic financial statements but is
supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule 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.
/s/ Dixon Hughes PLLC
June 17, 2008
High Point, NC
Page 1
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2007 and 2006
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ASSETS 2007 2006
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Investments, at fair value (Note C) $26,546,680 $28,506,976
--------------- ---------------
Receivables
Employer contributions 45,566 52,992
Participant contributions 74,646 90,394
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120,212 143,386
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NET ASSETS AVAILABLE FOR BENEFITS AT FAIR VALUE 26,666,892 28,650,362
Adjustment from fair value to contract value for fully
benefit-responsive investment contracts 67,112 152,035
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NET ASSETS AVAILABLE
FOR BENEFITS $26,734,004 $28,802,397
=============== ===============
See accompanying notes to the financial statements. Page 2
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Years Ended December 31, 2007, 2006 and 2005
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2007 2006 2005
--------------- --------------- -----------------
ADDITIONS TO NET ASSETS ATTRIBUTED TO
Investment income
Net appreciation in fair value of
investments (Note C) $ 1,934,661 $ 3,066,735 $ 1,139,654
Contributions
Employer 620,972 792,110 1,179,177
Participant 1,126,849 1,391,325 1,981,037
Direct rollovers 4,200 - -
--------------- --------------- -----------------
TOTAL ADDITIONS 3,686,682 5,250,170 4,299,868
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO
Benefits paid to participants 5,755,075 10,646,900 10,563,653
--------------- --------------- -----------------
NET DECREASE (2,068,393) (5,396,730) (6,263,785)
NET ASSETS AVAILABLE
FOR BENEFITS
Beginning of year 28,802,397 34,199,127 40,462,912
--------------- --------------- -----------------
End of year $ 26,734,004 $ 28,802,397 $ 34,199,127
=============== =============== =================
See accompanying notes to the financial statements. Page 3
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007, 2006 and 2005
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NOTE A - 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. and its subsidiaries (the "Company") who have 3 months of service and
are at least 21 years of age. Employees who elect to participate in the Plan may
do so in the next available payroll period. The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
Contributions
-------------
Each year, participants may contribute from 2% of pretax annual compensation up
to the maximum allowable amount, as defined in the Plan. Participants who have
attained age 50 before the end of the Plan year are eligible to make catch-up
contributions. Participants may also contribute amounts representing
distributions from other qualified defined benefit or defined contribution
plans. Participants direct the investment of their contributions into various
investment options offered by the Plan. The Plan currently offers various
registered investment company funds, one common trust fund, and Culp, Inc.
common stock as investment options for participants. The Company makes 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 contributed to
the Plan which qualifies under safe harbor provisions. An employee who is
eligible to participate in the Plan and does not affirmatively elect to decline
participation or does not have a specified amount to be contributed to the Plan,
the employee's compensation will be automatically reduced by 2% of compensation
and contributed into the Plan. Contributions are subject to certain limitations.
Additional profit sharing amounts may be contributed at the option of the
Company. No profit-sharing contributions were made during the years ended
December 31, 2007, 2006 or 2005.
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.
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 401(k) contributions, including the
matching contributions from the Company and actual earnings thereon.
Payment of Benefits
-------------------
On termination of service due to death, disability, retirement, or other
reasons, participants receive a lump-sum distribution equal to the value of the
participant's vested interest in the Plan.
Page 4
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007, 2006 and 2005
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NOTE B - SUMMARY OF ACCOUNTING POLICIES
Use of Estimates
----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect certain reported amounts of assets and
liabilities and changes therein, and disclosure of contingent assets and
liabilities. Actual results could differ from those estimates.
Valuation of Investments and Income Recognition
-----------------------------------------------
The Plan's investments are stated at fair value. Quoted market prices are used
to value investments. Shares of mutual funds are valued at the net asset value
of shares held by the Plan at year-end. Investments in the common and collective
trust funds are valued at unit values of the respective funds. Purchases and
sales of investments are reported on a trade date basis. Income from investments
is reported as earned on the accrual basis.
Payment of Benefits
-------------------
Benefits are recorded when paid.
Basis of Accounting
-------------------
The financial statements of the Plan are prepared under the accrual method of
accounting.
As described in Financial Accounting Standards Board ("FASB") issued FASB Staff
Position AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive
Investment Contracts Held by Certain Investment Companies Subject to the AICPA
Investment Company Guide and Defined Contribution Health and Welfare and Pension
Plans ("FSP"), investment contracts held by a defined contribution plan are
required to be reported at fair value. However, contract value is the relevant
measurement attributable for that portion of the net assets available for
benefits of a defined contribution plan attributable to fully benefit-responsive
investment contracts because contract value is the amount participants would
receive if they were to initiate permitted transactions under the terms of the
plan. As required by the FSP, the Statement of Net Assets Available for Benefits
presents the fair value of the investment contract, as well as the adjustment of
the fully benefit-responsive investment contract from fair value to contract
value. The Statement of Changes in Net Assets Available for Benefits is prepared
on a contract value basis.
Page 5
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007, 2006 and 2005
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NOTE C - INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets.
2007 2006
---------------- -----------------
Investments at fair value as determined by quoted
market price:
Common and collective trust fund:
MFS Fixed Fund * $ 6,901,213 $ 9,581,273
Registered investment company funds:
MFS Value Fund * 4,644,905 4,616,195
MFS Total Return Fund * 3,227,610 3,667,498
MFS Core Growth Fund * 2,723,144 2,694,632
MFS International Diversification Fund * 2,035,523 1,653,616
JP Morgan U.S. Real Estate Fund ** 1,528,317
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* Indicates party-in-interest
** Less than 5% in 2007.
The Plan's investments (including interest and dividends and gains and losses on
investments bought and sold, as well as held during the year) appreciated
(depreciated) in value as follows:
2007 2006 2005
-------------- -------------- ---------------
Common and collective trust funds $ 192,013 $ 398,816 $ 543,608
Registered investment company funds 1,243,562 2,577,285 1,190,881
Culp, Inc. common stock * 499,086 90,634 (594,835)
-------------- -------------- ---------------
$ 1,934,661 $ 3,066,735 $ 1,139,654
============== ============== ===============
* Indicates party-in-interest.
NOTE D - PARTY-IN-INTEREST TRANSACTIONS
Certain Plan investments are shares of common and collective trust funds and
registered investment companies managed by MFS Investment Management. MFS
Investment Management is a trustee as defined by the Plan and, therefore, these
transactions qualify as party-in-interest. Certain Plan investments are shares
of the Company's common stock. These transactions qualify as party-in-interest.
NOTE E - 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. In the event the Plan is terminated,
each participant becomes fully vested and the net assets of the Plan will be
allocated as prescribed by the Employment Retirement Income Securities Act of
1974 ("ERISA").
Page 6
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2007, 2006 and 2005
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NOTE F - TAX STATUS
The Internal Revenue Service has determined and informed the Company by a letter
dated November 4, 2002, that the Plan and related trust are designed in
accordance with applicable sections of the Internal Revenue Code. Although the
Plan has been amended since receiving the determination letter, 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.
NOTE G - RISKS AND UNCERTAINTIES
The Plan invests in various investment securities. Investment securities are
exposed to various risks, such as interest rate, market, and credit risks. Due
to the level of risk associated with certain investment securities, it is at
least reasonably possible that changes in the values of investment securities
will occur in the near term and that changes could materially affect the
participants' account balances and the amounts reported in the statement of net
assets available for benefits.
Page 7
SUPPLEMENTAL INFORMATION
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
EIN: 56-1001967
PLAN NUMBER 001
December 31, 2007
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(e) Current
(a) (b) Borrower, Lessor or Similar Party (c) Description of Investment (d) Cost ** Value
---- -------------------------------------- ----------------------------- ------------ -------------
* MFS Fixed Fund 6,901,213 units - $6,901,213
* MFS Value Fund 175,081 units - 4,644,905
* MFS Total Return Fund 211,785 units - 3,227,610
* MFS Core Growth Fund 130,294 units - 2,723,144
* MFS International Diversification Fund 128,831 units - 2,035,523
JP Morgan U.S Real Estate Fund 70,726 units - 1,208,703
Federated Kaufman Fund 192,271 units - 1,197,845
Oppenheimer Main St. Small Cap Fund 51,439 units - 1,014,380
Calvert Income Fund 56,421 units - 932,642
* MFS New Endeavor Fund 77,439 units - 797,626
* MFS Growth Allocation Fund 21,218 units - 319,115
* MFS Aggressive Growth Allocation Fund 8,395 units - 134,073
* MFS Conservative Allocation Fund 7,218 units - 88,560
* MFS Money Market Fund 67,866 units - 67,866
* MFS Moderate Allocation Fund 66 units - 901
* Culp, Inc. Common Stock 189,610 shares - 1,319,686
-------------
$26,613,792
=============
* Indicates party - in - interest
** Cost information omitted for participant-directed investments.
Page 8