Welcome to the Culp fourth quarter 2008 results conference call. (Operator Instructions) At this time, for opening remarks and introductions, I’d like to turn the conference over to Drew Anderson.

Welcome to the Culp conference call to review the company’s results for the fourth quarter of fiscal 2008. As we start, let me express that some statements made in this call will be forward-looking statements. Forward-looking statements are statements that include projections, expectations, or beliefs about future events or results, or otherwise are not statements of historical fact. Actual performance of the company may differ from that projected in such statements. Investors should refer to statements filed by the company with the Securities and Exchange Commission for a discussion of those factors that could affect Culp’s operations in the forward-looking statements made in this call. The information being provided today is of this date only, and Culp expressly disclaims any obligations to release publicly any updates or revisions to these forward-looking statements to reflect any changes in expectations. In addition, during this call, the company will be discussing non-GAAP financial measurements that exclude restructuring and restructuring-related charges. A reconciliation of these non-GAAP financial measurements to the most directly comparable GAAP financial measurements is included as a schedule to the company’s press release and 8-K filed yesterday. This information is also available on the Investor Relations section of the company’s website at www.culpinc.com. I’ll now turn the call over to Frank Saxon, President and Chief Executive Officer.

I would like to welcome you to the Culp quarterly conference call with analysts and investors. With me on the call today is Ken Bowling, our Chief Financial Officer. I’ll begin the call with some brief comments about Culp today, and Ken will then review the financial results for the quarter. I will then update you on the strategic actions in each of our operating segments. After that, Ken will review our first quarter 2009 business outlook. We’ll then be happy to take your questions. We are pleased with our performance for the fourth quarter and year, considering the current challenges we are facing. The uncertain economy, housing crisis and high energy costs have continued to influence consumer demand for furniture and to a lesser extent, bedding products. In spite of this environment, fiscal 2008 for us was an outstanding year, both in terms of our financial performance and the improvement in our competitive position. For the year, overall sales, profitability and cash flow were up from fiscal 2007, and we are pleased with the progress we have made in our operations. Today, Culp is a much stronger company than a year ago with respect to our value proposition to customers and our ability, both operationally and financially, to take advantage of opportunities in the current competitive landscape. We believe the business models in our businesses, mattress fabrics and upholstery fabrics, along with our improved financial position, are providing increasing value and stability to our customers, especially in light of the challenges facing many industry participants and the highly uncertain outlook. With that, I will now turn the call over to Ken.

Total sales for the quarter were $64 million, down 12.6% from the fourth quarter of last year. Operating income for the fourth quarter was $2.7 million, compared with operating income of $3.6 million last year, a decrease of 25%, excluding restructuring and related charges for both periods. Including restructuring related charges, operating income for the fourth quarter was $2.1 million, compared with operating income of $861,000 a year ago, an increase of 141%. Sales for fiscal 2008 were $254 million, compared with $250.5 million last year, an increase of almost 2%. For the year, operating income was $11.5 million, compared with $9 million last year, an increase of 27%, excluding restructuring and related charges for both periods. We reported net income of $2.1 million, or $0.16 per share for the fourth quarter of fiscal 2008. The financial results for the fourth quarter of fiscal 2008 included $186,000 or $0.01 per share in restructuring and related charges after taxes. Excluding these charges, net income for the fourth quarter was $2.3 million, or $0.18 per share. The fourth quarter of fiscal 2008 results reflect a significantly lower tax rate, due primarily to a higher than expected taxable income in China, tax at lower income tax rates and lower than expected US taxable income tax at higher income tax rates. The lower US taxable income was primarily due to restructuring and related charges incurred in the US. These rates are based on actual results for the full year. It is important to note that, with respect to the US, we have a net operating loss carryforward of approximately $75 million. Therefore, we will not incur cash income taxes in the US for the foreseeable future. These results for the fourth quarter compare with a net loss of $40,000, or $0.00 cents per share…

I will now provide an update on both of our operating segments. And I will start with mattress fabrics. We had a great year in this business. The key highlight was the successful integration of our acquisition of ITG’s mattress fabric business, which we made in January 2007. This purchase added approximately $35 million in sales, with minimal additions to staffing and fixed assets. We worked diligently to maintain our outstanding delivery performance to customers throughout this process, which we were able to do. Another key highlight is the fact that even with significantly higher level of business we were able to reduce the capital invested in mattress fabrics to $39 million at year-end, from $44 million at the beginning of the year. This was primarily due to excellent working capital management. One of our most important operational goals is to continually improve our inventory management, which is essential in a just-in-time delivery business, like we are in. For the year, sales increased 28% to $138 million from $108 million, and operating income improved to $14.1 million, or 10.2% of sales, up from $10.8 million or 10% of sales a year ago. The increases were primarily as a result of the acquisition. Our fourth quarter was the first quarter that had the ITG-acquired business in the same quarter of the prior year. Culp’s mattress fabric sales for the fourth quarter were affected by softer consumer bedding demand, as well as the discontinuation of certain ITG products that did not fit our business model. The results for the quarter also reflect higher raw material costs and increased Canadian operating costs due to the strengthening of the Canadian currency, as compared with the same period a year ago. As previously announced, we implemented a small price increase on selected products during the…

Looking ahead in the first quarter of fiscal 2009, we believe our mattress fabrics segment will continue to perform well, even though bedding industry demand is softening. Industry conditions for upholstery fabrics have been extremely difficult all year, reflecting very weak consumer demand and we expect this trend to continue for the foreseeable future. Overall, we expect our first quarter fiscal 2009 sales to be down approximately 10% to 15% from the first quarter of last year. We expect sales in our mattress fabric segment to be down approximately 3% to 7% for the first quarter, primarily due to the planned discontinuation of certain ITG products, and softening overall demand. Operating income in this segment is expected to approximate the prior year period, although we expect margins to improve. In our upholstery fabrics segment, we expect sales to be down approximately 20% to 25% for the first quarter, due mostly to lower sales of US-produced fabrics. We believe the upholstery fabric segment’s operating results will reflect a moderate operating loss due primarily to weak gross profits in our US operations. However, we still expect continued solid gross profit margins in our non-US produced business and substantially lower SG&A expenses, as compared to the first quarter of the prior year. Considering these factors, we expect to report net income in the first quarter in the range of $0.08 to $0.12 per share, excluding restructuring and related charges for previously announced restructuring initiatives. This is management’s best estimate at present recognizing that future financial results are difficult to predict, because the upholstery fabrics industry is continuing to undergo a dramatic transition and foreign currency fluctuation may continue. The actual results will depend primarily upon the level of demand throughout the quarter. We estimate that restructuring and related charges of approximately $100,000 or $75,000 net of taxes, or $0.01 per share from previously announced restructuring initiatives will be incurred during the first fiscal quarter. Including the restructuring and related charges, net income for the first quarter of fiscal 2009 will be in the range of $0.07 to $0.11 per share. I’ll now turn the call back over to Frank for concluding comments.

We are pleased with our solid execution over the past year, and are confident that we have the business models and management teams in place that will allow us to be solidly profitable in this challenging environment, and be well positioned to benefit from any upturn in consumer demand. We are a significantly stronger company today with a keen focus on driving improvement in the value we provide to our customers. Looking ahead, our mattress fabrics business will continue to be the key contributor to our profitability in fiscal 2009. With the capital improvements underway to enhance manufacturing capabilities and improve our customer service, we believe we have additional opportunities to grow this business. While challenging conditions in the retail furniture industry are affecting our upholstery fabric business, we believe we are strengthening our competitive position. Our China platform is maturing and continues to provide a sustainable business model for Culp to compete effectively in today’s upholstery fabrics global marketplace. Overall, we are optimistic about our opportunities for the coming year, and remain focused on achieving profitable growth over the long-term. With that, we will now take your questions.

(Operator Instructions) Your first question comes from Analyst for Laura Champine – Morgan Keegan & Co. Analyst for Laura Champine – Morgan Keegan & Co.: You had mentioned that the raw material costs you saw in Q4, and I wanted to ask you what you’re seeing so far in Q1 in terms of your total raw material cost inflation.

Just a little bit up from Q4, not much, the overall demand is holding the price down some as well. Analyst for Laura Champine – Morgan Keegan & Co.: Can you give what raw materials as a percentage of your total COGS are?

That would be difficult. Analyst for Laura Champine – Morgan Keegan & Co.: In terms of the trends in the mattress ticking segment, did you see any pick-up in May relative to the demand you saw in Q4?

So far this quarter, probably about the same, maybe a little better because we are heading into the seasonally stronger period for mattresses, the summer season, always the best season for mattresses. Analyst for Laura Champine – Morgan Keegan & Co.: Did you say that sales in the mattress ticking segment were going to be down 3% to 7% in the quarter, and is some of that attributable to exiting some of the products from ITG?

Yes. And a good estimate, maybe half and half of the 3% to 7% estimated decline, half from softening demand, half from discontinued products. Analyst for Laura Champine – Morgan Keegan & Co.: So, if you ex out the discontinued products do you get a stronger top-line assumption in terms of a percentage.

Yes.

There appear to be no further questions at this time.

Thank you for joining us today, and we will look forward to updating you on our first quarter results. Thanks, and have a good day.