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, 2004
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 employees participating in the Plan at December 31, 2004 was
1,615. 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 Public Accounting Firm 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
Schedule of Assets (Held at End of Year) 8
(b) Exhibit
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Exhibit 1 - 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 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 29, 2005
Franklin N. Saxon
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Robert G. Culp, III
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Kenneth M. Ludwig
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Culp, Inc. Employees' Retirement Builder Plan
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TABLE OF CONTENTS
Page No.
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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)............................. 8
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, 2004 and
2003 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, 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. The Plan is not required to have,
nor were we engaged to perform, an audit of its 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 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, 2004 and 2003 and the
changes in its net assets available for plan benefits for each of the years in
the three-year period ended December 31, 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, 2004 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
May 23, 2005
High Point, NC
Page 1
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2004 and 2003
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ASSETS 2004 2003
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Investments, at fair value (Note C) $ 40,147,175 $ 4,145,334
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Receivables
Employer contributions 123,185 125,266
Employee contributions 192,552 195,328
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315,737 320,594
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Cash - 34,056,430
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NET ASSETS AVAILABLE
FOR BENEFITS $ 40,462,912 $ 38,522,358
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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, 2004, 2003 and 2002
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2004 2003 2002
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ADDITIONS TO NET ASSETS ATTRIBUTED TO
Investment income
Net appreciation in fair value of investments (Note C) $ 1,611,260 $ 4,565,053 $ 2,863,185
Net increase in insurance CSV - - 7,623
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1,611,260 4,565,053 2,870,808
Contributions
Employer 1,514,034 1,649,725 1,868,366
Employee 2,483,379 2,623,673 2,934,591
Direct rollovers 13,736 372 14,101
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TOTAL ADDITIONS 5,622,409 8,838,823 7,687,866
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DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO
Benefits paid to participants 3,681,855 4,403,726 4,466,413
Trustee fees (Note D) - 105,750 115,729
Administrative fees (Note D) - 92,299 104,216
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TOTAL DEDUCTIONS 3,681,855 4,601,775 4,686,358
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NET INCREASE 1,940,554 4,237,048 3,001,508
NET ASSETS AVAILABLE
FOR BENEFITS
Beginning of year 38,522,358 34,285,310 31,283,802
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END OF YEAR $ 40,462,912 $ 38,522,358 $ 34,285,310
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See accompanying notes to the financial statements. Page 3
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2004, 2003 and 2002
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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
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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. The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 ("ERISA").
Contributions
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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 ten mutual
funds and Culp stock as investment options for participants. In January 1999,
the Plan was amended to include safe harbor provisions. 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.
Additional profit sharing amounts may be contributed at the option of the Plan
Sponsor. No profit-sharing contributions were made during the years ended
December 31, 2004, 2003 or 2002. Contributions are subject to certain
limitations.
Participant Accounts
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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
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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 or 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, 2004, 2003 and 2002
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NOTE B - SUMMARY OF ACCOUNTING POLICIES
Use of Estimates
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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 in common and collective trust funds, registered
investment companies, and common stock associated with Culp, Inc. are stated at
fair value based on quoted market prices. 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
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Benefits are recorded when paid.
Insurance
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In 2002, all insurance contracts with Great Southern Life were terminated and
the cash surrender values of the policies were added to the respective
participants' accounts. Net cash value received was $49,913.
NOTE C - INVESTMENTS
The following presents investments that represent 5% or more of the Plan's net
assets.
2004 2003
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Investments at fair value as determined by quoted
market price:
Common trust fund:
MFS Fixed Fund * $ 17,372,097 $ -
Registered investment company funds:
MFS Value Fund * 6,107,116 -
MFS Total Return Fund * 5,026,344 -
MFS Core Growth Fund * 4,033,321 -
Culp, Inc. common stock * 2,095,386 4,134,759
* Indicates party-in-interest
Page 5
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2004, 2003 and 2002
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NOTE C - INVESTMENTS (Continued)
Investments at December 31, 2004 are significantly higher in comparison to
December 31, 2003 due to the change in the Plan's Trustee from Wachovia Bank,
N.A. to MFS Investment Management effective January 2, 2004. In conjunction with
this change, participants were temporarily unable to direct or diversify
investments, obtain hardship withdrawals, or obtain distributions from the Plan
during the mandatory blackout period which began in December 2003 and ceased on
January 30, 2004. During this period, participant accounts were liquidated and
transferred to similar investment vehicles offered by MFS Investment Management,
with the exception of the Company's common stock which was treated as an in-kind
transfer.
During 2004, the Plan's investments (including re-invested interest and
dividends, gains and losses on investments bought and sold, as well as held
during the year) appreciated (depreciated) in value as follows:
2004 2003 2002
------------ ------------ ------------
Common and collective trust funds $ 526,547 $ 767,676 $ 400,611
Registered investment company funds 2,377,354 2,773,028 (2,685,003)
Culp, Inc. common stock * (1,292,641) 1,024,349 5,147,577
------------ ------------ ------------
$ 1,611,260 $ 4,565,053 $ 2,863,185
============ ============ ============
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 in 2004 and
Wachovia Bank, N.A. in 2003 and 2002. MFS Investment Management and Wachovia
Bank, N.A. are trustees as defined by the Plan and, therefore, these
transactions qualify as party-in-interest. No recordkeeping and trustee fees
were paid by the Plan to MFS Investment Management in 2004. Recordkeeping and
trustee fees paid by the Plan to Wachovia amounted to $198,049 in 2003 and
$219,945 in 2002.
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.
Page 6
CULP, INC. EMPLOYEES' RETIREMENT BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS
December 31, 2004, 2003 and 2002
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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 ("IRC"). 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
reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect 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, 2004
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(e) Current
(a) (b) Identity of Issuer (c) Description of Investment (d) Cost ** Value
----- ---------------------------------------- ----------------------------- ----------- -------------
* MFS Fixed Fund 17,372,097 units $ 17,372,097
* MFS Value Fund 263,920 units 6,107,116
* MFS Total Return Fund 314,146 units 5,026,344
* MFS Core Growth Fund 244,148 units 4,033,321
Blackrock Aurora Fund 28,614 units 1,158,302
* MFS International New Discovery Fund 48,721 units 1,039,712
JP Morgan United States Real Estate Fund 54,187 units 965,623
* MFS New Endeavor Fund 61,640 units 851,870
Calvert Income Fund 42,389 units 720,615
Federated Kaufman Fund 124,905 units 669,493
* MFS Money Market Fund 107,296 units 107,296
* Culp Inc. Common Stock 309,054 shares 2,095,386
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$ 40,147,175
=============
* Indicates party - in - interest
** Cost information omitted for participant-directed investments.
Page 8
Exhibit 1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Retirement Committee of the
Culp, Inc. Employees' Retirement Builder Plan
High Point, North Carolina
We consent to the incorporation by reference in the registration statement (No.
33-13310,) on Form S-8 of the Culp, Inc. Employees' Retirement Builder Plan of
our report dated May 23, 2005, which report is included herein.
/s/ Dixon Hughes PLLC
High Point, North Carolina
June 27, 2005