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, 2006
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, 2006 was 814. The
Retirement Committee administers the Plan, and its members are Kenneth M.
Ludwig, Robert G. Culp, III, and Franklin N. Saxon, 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 Plan Benefits
Statements of Changes in Net Assets 3
Available for Plan Benefits
Notes to Financial Statements 4
Schedule of Assets (Held at End of Year) 7
(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 27, 2007
/s/ Franklin N. Saxon
---------------------
Franklin N. Saxon
/s/ Robert G. Culp, III
-----------------------
Robert G. Culp, III
/s/ Kenneth M. Ludwig
---------------------
Kenneth M. Ludwig
| Culp, Inc. Employees' |
| Retirement Builder Plan |
| |
| Financial Statements and |
| Supplemental Information |
| |
| As of December 31, 2006 and 2005 and for the |
| Years Ended December 31, 2006, 2005 and 2004 |
Culp, Inc. Employees'
Retirement Builder Plan
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TABLE OF CONTENTS
Page No.
Report of Independent Registered Public Accounting Firm............... 1
Financial Statements
Statements of Net Assets Available for Benefits..................... 2
Statements of Changes in Net Assets Available for Benefits.......... 3
Notes to Financial Statements....................................... 4
Supplemental Schedule
Schedule of Assets (Held at End of Year)............................ 7
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, 2006 and
2005 and the related statements of changes in net assets available for benefits
for the years ended December 31, 2006, 2005 and 2004. 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, 2006 and 2005 and the
changes in its net assets available for plan benefits for the years ended
December 31, 2006, 2005 and 2004 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, 2006 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 15, 2007
High Point, NC
Page 1
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2006 and 2005
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ASSETS 2006 2005
------------------- ------------------
Investments, at fair value (Note C) $28,659,011 $33,977,234
------------------- ------------------
Receivables
Employer contributions 52,992 84,978
Participant contributions 90,394 136,915
------------------- ------------------
143,386 221,893
------------------- ------------------
NET ASSETS AVAILABLE
FOR BENEFITS $28,802,397 $34,199,127
=================== ==================
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, 2006, 2005 and 2004
------------------------------------------------------------------------------------------------------------
2006 2005 2004
--------------- --------------- ---------------
ADDITIONS TO NET ASSETS ATTRIBUTED TO
Investment income
Net appreciation in fair value of investments (Note C) $ 3,066,735 $ 1,139,654 $ 1,611,260
Contributions
Employer 792,110 1,179,177 1,514,034
Participant 1,391,325 1,981,037 2,483,379
Direct rollovers - - 13,736
--------------- --------------- ---------------
TOTAL ADDITIONS 5,250,170 4,299,868 5,622,409
DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO
Benefits paid to participants 10,646,900 10,563,653 3,681,855
--------------- --------------- ---------------
NET (DECREASE) INCREASE (5,396,730) (6,263,785) 1,940,554
NET ASSETS AVAILABLE
FOR BENEFITS
Beginning of year 34,199,127 40,462,912 38,522,358
--------------- --------------- ---------------
END OF YEAR $ 28,802,397 $ 34,199,127 $ 40,462,912
=============== =============== ===============
See accompanying notes to the financial statements. Page 3
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004
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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 one year of service and
are age twenty-one or older. Employees who have met the length of service
requirement and elect to participate in the Plan may do so on January 1 or July
1. Effective January 1, 2007, the service requirement was reduced to three
months of service for entry into the Plan. 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 contributions
plans. Participants direct the investment of their contributions into various
investment options offered by the Plan. The Plan currently offers twelve mutual
funds, one common trust fund, and Culp 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 qualify under safe
harbor provisions.
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, 2006, 2005 or 2004. Contributions are subject to certain
limitations.
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 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 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, 2006, 2005 and 2004
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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 trust fund 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.
NOTE C - INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets.
2006 2005
----------- ------------
Investments at fair value as determined by quoted
market price:
Common trust fund:
MFS Fixed Fund * $ 9,581,273 $ 13,697,853
Registered investment company funds:
MFS Value Fund * 4,616,195 4,991,591
MFS Total Return Fund * 3,667,498 4,368,528
MFS Core Growth Fund * 2,694,632 3,282,143
MFS International Diversification Fund * 1,653,616 -
JP Morgan U.S. Real Estate Fund 1,528,317 -
* Indicates party-in-interest
Page 5
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004
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NOTE C - INVESTMENTS (Continued)
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:
2006 2005 2004
--------- ---------- ----------
Common and collective trust funds $ 398,816 $ 543,608 $ 526,547
Registered investment company funds 2,577,285 1,190,881 2,377,354
Culp, Inc. common stock * 90,634 (594,835) (1,292,641)
--------- ----------- -----------
$3,066,735 $1,139,654 $1,611,260
========== ========== ==========
* 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.
NOTE F - TAX STATUS
The Internal Revenue Service has determined and informed the Company by a letter
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 instruments. 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 6
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, 2006
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(e) Current
(a) (b) Identity of Issuer (c) Description of Investment (d) Cost ** Value
------- --------------------------------- ----------------------------- -------------- -------------
* MFS Fixed Fund 9,581,273 units - $9,581,273
* MFS Value Fund 172,439 units - 4,616,195
* MFS Total Return Fund 226,669 units - 3,667,498
* MFS Core Growth Fund 142,649 units - 2,694,632
* MFS International Diversification Fund 106,069 units - 1,653,616
JP Morgan United States Real Estate Fund 67,565 units - 1,528,317
Oppenheimer Main St. Small Cap Fund 49,009 units - 1,083,580
Federated Kaufman Fund 169,808 units - 961,114
Calvert Income Fund 49,234 units - 825,650
* MFS New Endeavor Fund 54,539 units - 671,377
* MFS Growth Allocation Fund 4,394 units - 64,863
* MFS Aggressive Growth Allocation Fund 1,322 units - 20,603
* MFS Money Market Fund 50,018 units - 50,018
* Culp Inc. Common Stock 240,830 shares - 1,240,275
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$28,659,011
=============
* Indicates party - in - interest
** Cost information omitted for participant-directed investments.
Page 7