<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2000 OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM            TO
                                           ----------    ----------

                             Commission File Number
                             ----------------------
                                    1-10471

                         CRAFTMADE INTERNATIONAL, INC.
                         -----------------------------
             (Exact name of registrant as specified in its charter)

         Delaware                                             75-2057054
         --------                                             ----------
 (State or other jurisdiction                              (I.R.S. Employer
of Incorporation or Organization)                         Identification No.)


650 South Royal Lane, Suite 100 Coppell, Texas                  75019
----------------------------------------------                  -----
(Address of principal executive offices)                       Zip Code


Registrant's telephone number, including area code (972) 393-3800
                                                   --------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X]  No [ ]

6,210,361 shares of Common Stock were outstanding as of May 12, 2000.

<PAGE>   2

                 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES

                     Index to Quarterly Report on Form 10-Q



Part I.  Financial Information

         Item 1.  Financial Statements (unaudited)

                  Condensed Consolidated Statements of Income for the three and
                  nine months ended March 31, 2000 and 1999.

                  Condensed Consolidated Balance Sheets as of March 31, 2000 and
                  June 30, 1999.

                  Condensed Consolidated Statement of Changes in Stockholders'
                  Equity for the nine months ended March 31, 2000.

                  Condensed Consolidated Statements of Cash Flows for the nine
                  months ended March 31, 2000 and 1999.

                  Notes to Condensed Consolidated Financial Statements.

         Item 2.  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations.

         Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Part II. Other Information

         Item 1.  Legal Proceedings

         Item 2.  Changes in Securities and Use of Proceeds

         Item 3.  Defaults Upon Senior Securities

         Item 4.  Submission of Matters to a Vote of Security Holders

         Item 5.  Other Information

         Item 6.  Exhibits and Reports on Form 8-K


<PAGE>   3
                 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)

<TABLE>
<CAPTION>
                              FOR THE THREE MONTHS ENDED         FOR THE NINE MONTHS ENDED
                           ------------------------------     ------------------------------
                            March 31,          March 31,        March 31,         March 31,
                               2000              1999             2000              1999
                           ------------      ------------     ------------      ------------
<S>                        <C>               <C>              <C>               <C>
Net Sales                  $     20,336      $     21,305     $     60,157      $     62,466
Cost of goods sold               14,119            13,887           39,526            40,006
                           ------------      ------------     ------------      ------------

  Gross profit                    6,217             7,418           20,631            22,460
                           ------------      ------------     ------------      ------------

Selling, general
 and administrative
 expenses                         4,607             4,921           13,480            12,793
Interest expense,net                445               276            1,150             1,004
Depreciation and
 amortization                       219               203              648               597
                           ------------      ------------     ------------      ------------

    Total expenses                5,271             5,400           15,278            14,394
                           ------------      ------------     ------------      ------------

Income before
 income taxes
 and minority interest              946             2,018            5,353             8,066

Provision for
 income taxes                       216               737            1,613             2,706
                           ------------      ------------     ------------      ------------

Income before
 minority interest                  730             1,281            3,740             5,360
Minority interest                  (339)                7             (879)             (617)
                           ------------      ------------     ------------      ------------

Net income                 $        391      $      1,288     $      2,861      $      4,743
                           ============      ============     ============      ============


Basic and diluted
 earnings per share        $        .06      $        .17     $        .41      $        .63
                           ============      ============     ============      ============

Cash dividends
declared
per common share           $        .02      $        .02     $        .06      $        .06
                           ============      ============     ============      ============
</TABLE>


                       SEE ACCOMPANYING NOTES TO CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS


<PAGE>   4
                 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
                                     ASSETS



<TABLE>
<CAPTION>
                                    March 31,      June 30,
                                      2000           1999
                                   ----------     ----------
                                        (In thousands)
<S>                                <C>            <C>
Current assets:
  Cash                             $    1,127     $    1,563
  Accounts receivable - trade,
    net of allowance                   13,640         14,586
  Inventory, net of reserve            14,953         13,779
  Prepaid expenses and other
    current assets                      1,574          1,507
                                   ----------     ----------

   Total current assets                31,294         31,435
                                   ----------     ----------


Property and equipment, net             9,554          9,691
                                   ----------     ----------

Other assets:
  Goodwill, net                         5,236          5,543
  Other assets                             30             48
                                   ----------     ----------

         Total other assets             5,266          5,591
                                   ----------     ----------

                                   $   46,114     $   46,717
                                   ==========     ==========
</TABLE>


                       SEE ACCOMPANYING NOTES TO CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS

<PAGE>   5

                 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                      LIABILITIES AND STOCKHOLDERS' EQUITY
                                   (unaudited)


<TABLE>
<CAPTION>
                                                    March 31,        June 30,
                                                      2000             1999
                                                   -----------      -----------
Current liabilities:                                       (In thousands)
<S>                                                <C>              <C>
  Note payable, facility-
    current portion                                $       838      $       788
  Revolving line of credit                              15,700           11,950
  Accounts payable - trade                               3,332            4,174
  Accounts payable - commissions                           344              344
  Income taxes payable                                      --              446
  Other accrued liabilities                                340              426
                                                   -----------      -----------

         Total current liabilities                      20,554           18,128

  Note payable, facility -
    long term portion                                    8,362            4,677
  Other liabilities                                        407              549
                                                   -----------      -----------


  Total liabilities                                     29,323           23,354
                                                   -----------      -----------

Stockholders' equity:
 Series A cumulative, convertible,
   callable preferred stock, $1.00
   par value, 2,000,000 shares
   authorized; 32,000 shares issued                         32               32
 Common stock, $.01 par value,
   15,000,000 shares authorized,
   9,316,535 shares issued                                  93               93
Additional paid-in capital                              12,453           12,453
Retained earnings                                       21,482           19,046
                                                   -----------      -----------
                                                        34,060           31,624
 Less:  treasury stock, 2,916,177
   and 1,917,677 common shares at
   cost as of March 31, 2000 and
   June 30, 1999, respectively
   and 32,000 preferred shares
        at cost                                        (17,269)          (8,261)
                                                   -----------      -----------
            Total stockholders' equity                  16,791           23,363
                                                   -----------      -----------

                                                   $    46,114      $    46,717
                                                   ===========      ===========
</TABLE>

                       SEE ACCOMPANYING NOTES TO CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS


<PAGE>   6



                 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
                                  (Unaudited)
                    FOR THE NINE MONTHS ENDED MARCH 31, 2000


<TABLE>
<CAPTION>
(In $thousands)                                                Series A   ADDITIONAL
                                                               Preferred   PAID-IN      RETAINED
                                        VOTING COMMON STOCK      Stock     CAPITAL      EARNINGS     TREASURY STOCK
                                       ---------------------     -----     -------      --------   -------------------
                                       Shares         Amount                                       Shares       Amount     Total
                                       ------         ------                                       ------       ------     -----
<S>                               <C>              <C>      <C>        <C>       <C>         <C>         <C>          <C>
Balance as of June 30, 1999             9,317            $93      $32        $12,453   $19,046     1,950       ($8,261)   $23,363

Stock repurchase                                                                                     998        (9,008)    (9,008)

Net Income for the nine months
   ended March 31, 2000                                                                  2,861                              2,861

Cash Dividends                                                                            (425)                              (425)

Balance as of March 31, 2000            9,317            $93      $32        $12,453   $21,482     2,948      ($17,269)   $16,791
</TABLE>



<PAGE>   7

                 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                           FOR THE NINE MONTHS ENDED
                                                         ------------------------------
                                                           March 31,          March 31,
                                                             2000              1999
                                                         ------------      ------------
                                                                 (In Thousands)
<S>                                                      <C>               <C>
Net cash provided by
  operating activities                                   $      2,737      $      5,283
                                                         ------------      ------------


Cash flows from investing activities:
  TSI acquisition                                                   0            (2,041)
  Net additions to equipment                                     (204)             (372)
                                                         ------------      ------------

  Net cash used for investing activities                         (204)           (2,413)
                                                         ------------      ------------

Cash flows from financing activities:
  Principal payments on note payable - facility                  (581)           (1,141)
  Proceeds from note payable - facility                         4,316                --
  Stock repurchase                                             (9,008)             (994)
  Net proceeds from (principal payments for)
    revolving line of credit                                    3,750               279
  Proceeds from exercise of stock options                           0                10
  Cash dividends                                                 (425)             (402)
  Distributions to minority interest
    shareholders in subsidiary                                 (1,021)             (478)
                                                         ------------      ------------

Net cash used for financing activities                         (2,969)           (2,726)
                                                         ------------      ------------

Net increase (decrease) in cash                                  (436)              144

Cash at beginning of year                                       1,563               925
                                                         ------------      ------------

Cash at end of period                                    $      1,127      $      1,069
                                                         ============      ============
</TABLE>


Supplemental disclosures of cash flow information:

<TABLE>
<CAPTION>
                                                     FOR THE NINE MONTHS ENDED
                                                   -----------------------------
                                                     March 31,         March 31,
                                                       2000              1999
                                                   ------------     ------------
                                                          (In Thousands)
<S>                                                <C>              <C>
Cash paid during the period for:
  Interest                                         $      1,170     $      1,004
                                                   ============     ============

  Income taxes                                     $        377     $      2,800
                                                   ============     ============
</TABLE>

                       SEE ACCOMPANYING NOTES TO CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS



<PAGE>   8
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                        OF CRAFTMADE INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                                 MARCH 31, 2000
                                   (Unaudited)


Note 1 - BASIS OF PREPARATION AND PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission and include all adjustments which are, in the opinion of management,
necessary for a fair presentation. The condensed consolidated financial
statements include the accounts of the Company and its subsidiaries. Certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. The Company
believes that the disclosures are adequate to make the information presented not
misleading; however, it is suggested that these financial statements be read in
conjunction with the financial statements and the notes thereto which are
included in the Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1999. The financial data for the interim periods may not necessarily be
indicative of results to be expected for the year.

Certain amounts for the three and nine months ended March 31, 1999 have been
reclassified to conform with the current quarter and nine months' presentation.

Note 2 - TREASURY STOCK PURCHASES

On March 17, 1999, the Company's Board of Directors authorized the Company's
management to repurchase up to 200,000 shares of the Company's outstanding
stock. During the first quarter of fiscal 2000 the Company repurchased the
remaining 22,500 shares at an aggregate cost of $208,000 under this plan.

On August 13, 1999, and on October 29, 1999, the Company's Board of Directors
authorized the Company's management to repurchase an additional 400,000 and
250,000 shares, respectively, of the Company's outstanding common stock. At
March 31, 2000, the Company had repurchased 650,000 shares at an aggregate cost
of $6,042,000 related to this plan.

On February 16, 2000 the Company's Board of Directors authorized the Company's
management to repurchase an additional 1,500,000 shares of the Company's
outstanding common stock. At March 31, 2000, the Company had repurchased 326,000
shares at an aggregate cost of $2,758,000 related to this plan.
<PAGE>   9

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                        OF CRAFTMADE INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                                 March 31, 2000
                                   (Unaudited)
                                 (In Thousands)


Note 3 - EARNINGS PER SHARE

The following is a reconciliation of the numerator and denominator used in the
basic and diluted EPS calculations:

<TABLE>
<CAPTION>
                                   FOR THE THREE MONTHS ENDED          FOR THE NINE MONTHS ENDED
                                  -----------------------------     -----------------------------
                                    March 31,       March 31,        March 31,        March 31,
                                      2000             1999             2000             1999
                                  ------------     ------------     ------------     ------------
<S>                               <C>              <C>              <C>              <C>
Basic and  Diluted EPS

Numerator:
Net Income                        $        391     $      1,288     $      2,861     $      4,743
                                  ------------     ------------     ------------     ------------

Denominator:
Common
Shares
Outstanding                              6,671            7,551            6,954            7,550
                                  ------------     ------------     ------------     ------------

Basic EPS                         $        .06     $        .17     $        .41     $        .63
                                  ============     ============     ============     ============


Denominator:
Common Shares
Outstanding                              6,671            7,551            6,954            7,550
Options                                     --               14               --               15
                                  ------------     ------------     ------------     ------------
Total Shares                             6,671            7,565            6,954            7,565
                                  ============     ============     ============     ============

Diluted EPS                       $        .06     $        .17     $        .41     $        .63
                                  ============     ============     ============     ============
</TABLE>



<PAGE>   10
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                        OF CRAFTMADE INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                                 MARCH 31, 2000
                                   (Unaudited)


Note 4 - DERIVATIVE FINANCIAL INSTRUMENTS

During the first quarter of fiscal 2000, the Company entered into an interest
rate swap agreement, with a maturity of December 26, 2003, to manage its
exposure to interest rate movements by effectively converting its long-term
facility debt from fixed to variable rates. The notional amount of the interest
rate swap subject to variable rates as of March 31, 2000 was $4,373,009, which
decreases as payments are made on the long-term debt. Under this agreement, the
Company has contracted to pay a variable rate equal to LIBOR plus 2.43% (8.5625%
at March 31, 2000) and receive a fixed rate of 8.125%. This agreement is
accounted for as a hedge of fixed rate debt and interest rate differentials paid
or received under this agreement will be recognized as adjustments to interest
expense. Gains or losses on terminated swaps will be recognized over the
remaining life of the underlying obligation as an adjustment to interest
expense. The fair value of the swap agreement approximated ($98,019) at March
31, 2000. This amount approximates the present value of the difference between
estimated future variable-rate payments and fixed-rate receipts and represents
the amount the Company would have to pay to terminate the swap. This amount has
not been recognized in the Condensed Consolidated Financial Statements, since it
is accounted for as a hedge and the Company has no present intention of
terminating the swap prior to the maturity date of the debt.


Note 5 - SEGMENT INFORMATION

The Company has two operating segments: Craftmade and Trade Source International
("TSI"). The Craftmade segment primarily derives its revenue from home
furnishings including ceiling fans, light kits, bathstrip lighting and lamps
offered primarily through lighting showrooms. The TSI segment derives its
revenue from outdoor lighting and fan accessories marketed solely to mass
merchandisers. The accounting policies of the segments are the same as those
described in Note 2 - Summary of Significant Accounting Policies to the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1999.
The Company evaluates the performance of its segments and allocates resources to
them based on their operating profit and loss and cash flows.



<PAGE>   11
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                        OF CRAFTMADE INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                                 MARCH 31, 2000
                                   (Unaudited)


Note 5 - SEGMENT INFORMATION (con't)
         ---------------------------

The following table presents information about the reportable segments (in
thousands):

<TABLE>
<CAPTION>
                                                Craftmade           TSI              Total
                                               ------------     ------------     ------------
<S>                                            <C>              <C>              <C>
For the three months ended March 31, 2000:
Net sales from external customers              $     11,672     $      8,664     $     20,336
Operating profit                                      1,266              125            1,391

For the three months ended March 31, 1999:
Net sales from external customers              $     11,233     $     10,072     $     21,305
Operating profit                                      1,515              779            2,294


For the nine months ended March 31, 2000:
Net sales from external customers              $     36,120     $     24,037     $     60,157
Operating profit                                      5,338            1,165            6,503


For the nine months ended March 31, 1999:
Net sales from external customers              $     34,444     $     28,022     $     62,466
Operating profit                                      6,032            3,038            9,070

March 31, 2000
Total Assets                                   $     27,827     $     18,287     $     46,114

March 31, 1999
Total Assets                                   $     28,267     $     18,450     $     46,717
</TABLE>


<PAGE>   12
ITEM 2         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
               RESULTS OF OPERATIONS.

Cautionary Statement

With the exception of historical information, the matters discussed under
"Results of Operations" and "Liquidity and Capital Resources" contain
forward-looking statements. There are certain important factors which could
cause results to differ materially than those anticipated by some of the
forward-looking statements. Some of these important factors include, among other
things, changes from anticipated levels of sales, whether due to future national
or regional economic and competitive conditions, changes in relationships with
customers, TSI's dependence on select mass merchandisers, customer acceptance of
existing and new products, pricing pressures due to excess capacity, raw
material cost increases, changes in tax or interest rates, unfavorable economic
and political developments in Asia, the location of the Company's primary
vendors, declining conditions in the home construction industry, inability to
realize deferred tax assets, and other uncertainties, all of which are difficult
to predict and many of which are beyond the control the Company.

Results of Operations

Three Months Ended March 31, 2000 Compared to Three Months Ended March 31, 1999

Net Sales. Net sales decreased $969,000 to $20,336,000 for the three month
period ended March 31, 2000 from $21,305,000 for the same three month period
last year. Sales of the TSI divison declined $1,408,000, partially offset by a
$439,000 increase in sales of the Craftmade division. Craftmade's sales
benefited from an increase in fan sales of 11.2% or $756,000 for the three month
period ended March 31, 2000 compared to the same period in the previous year.
The increase in fan sales was partially offset by a $317,000 decline in sales of
products other than fans, primarily related to a decline in sales of Durocraft
(the lamp business of Craftmade, which is currently being phased out). The
decline in sales of the TSI division was primarily due to the fact that the
division recorded $1,469,000 in revenue from the sale of merchandise to a
national wholesale club in the third quarter of fiscal 1999 which did not occur
in the third quarter of fiscal 2000. The sale in the third quarter of fiscal
1999 represented a non-program purchase of promotional items consistent with the
customer's strategy of continuously offering new products. The Company's
management anticipates that future growth of the TSI division will come from
expanding its product offerings, particularly through its 50% ownership interest
in Design Trends, LLC, and consequently expanding its customer base to include
regional and national



<PAGE>   13

specialty retailers and department stores in addition to the mass retailers and
major home center customers it now serves.

Gross Profit. Gross profit for the three months ended March 31, 2000 decreased
$1,201,000 to $6,217,000 (or 30.6% of net sales) from $7,418,000 (or 34.8% of
net sales) for the same period of 1999. Excluding the effect of inventory
write-downs, the gross margin of the Craftmade division increased $243,000, and
gross margins improved to 43.3% of sales from 42.8% for the three months ended
March 31, 2000 and 1999, respectively. Craftmade recorded a write-down of its
Durocraft inventory of $517,000 or $0.05 per share net of income taxes. Gross
profit from TSI decreased to 19.4% of net sales for the three months ended March
31, 2000 from 36.2% for the same period of the previous year. The decline in the
gross margin of TSI was primarily due to an increase in direct shipment sales
which carry lower margins than domestic shipments. TSI's gross margin was also
impacted because the division recorded $194,000 in sales credits during the
third quarter of fiscal 2000 which did not occur in the third quarter of fiscal
1999. These credits were issued to assist two of the division's largest
customers in clearing inventory, and were in addition to credits issued under
the terms of various sales allowance and rebate programs the Company has in
place.

Selling, General and Administrative Expenses. Selling, general and
administrative ("SG&A") expenses decreased to 22.7% of sales for the three
months ended March 31, 2000 from 23.1% of sales for the three months ended March
31, 1999, or 0.4% as a percentage of net sales. Total SG&A expense of the
Craftmade division decreased to 27.2% of sales from 28.6% of sales for the same
period in the previous year, or 1.4% as a percentage of sales. The decline in
SG&A expense as a percentage of sales demonstrates the Company's ability to
leverage its fixed corporate operating expenses while increasing sales of the
Craftmade division. For the three-month period ended March 31, 2000, SG&A
expenses of the TSI division declined to 16.5% of sales compared to 17.0% of
sales for the year-ago period, or 0.5% as a percentage of sales. The decline in
SG&A expense of the TSI division was due to management's continued efforts to
reduce costs and eliminate redundancies in SG&A subsequent to Craftmade's
acquisition of TSI.

Interest Expense. Net interest expense increased $169,000 to $445,000 for the
three months ended March 31, 2000 from $276,000 for the same three-month period
last year. This increase was primarily the result of a net increase in the
Company's line of credit during the nine months ended March 31, 2000. The
proceeds were utilized to repurchase the Company's common stock during the
period.



<PAGE>   14
Minority Interest. Minority interest of ($339,000) and $7,000 for the three
months ended March 31, 2000 and 1999, respectively, represented the 50%
ownership of Prime Home Impressions, LLC ("PHI") by a non-Company owned member.
The non-Company owned interest has been accounted for as a minority interest.

Nine Months Ended March 31, 2000 Compared to Nine Months Ended March, 1999

Net Sales. For the nine months ended March 31, 2000, net sales decreased
$2,309,000 to $60,157,000 from $62,466,000 for the same nine-month period last
year. This decrease was primarily represented by TSI's $3,985,000 decline in
sales for the nine months ended March 31, 2000 offset partially by a $1,676,000
increase in Craftmade's sales for the period. Net sales of TSI declined as one
of TSI's major customers reduced its level of purchasing during the first
quarter of fiscal 2000 while it continued to sell previously purchased
inventory. Sales were also impacted by a substantial reduction in the purchases
of another customer, a national wholesale club, that occurred in the third
quarter. Craftmade's sales benefited from increased fan sales during the period,
partially offset by declining lamp sales, consistent with results for the
three-month period ended March 31, 2000.

Gross Profit. For the nine month period ended March 31, 2000, gross profit
decreased to 34.3% of sales or $20,631,000 in fiscal 2000 from 36.0% of sales or
$22,460,000 in fiscal 1999. Craftmade's gross margins declined to 42.2% from
43.1% for the nine months ended March 31, 2000 and 1999, respectively. Excluding
the $517,000 write-down of the Durocraft inventory in the third quarter of
fiscal 2000, the gross margin of the Craftmade division increased to 43.7% of
sales for the nine-month period ended March 31, 2000. Gross profit from TSI
declined to 22.4% of sales compared to 27.2% for the same period in the previous
year. The decline in TSI's gross margin was due to an increase in direct
shipment sales, which carry lower margins than domestic shipments, as well as
additional rebates provided to two of the division's larger customers to assist
in clearing certain categories of slow-moving inventory.

Selling, General and Administrative Expenses. For the nine month period ended
March 31, 2000, total selling, general and administrative expense increased to
$13,480,000 or 22.4% of sales compared to $12,793,000 or 20.5% of sales for the
same period last year. SG&A expenses of Craftmade increased to $9,630,000 or
26.7% of sales compared to $8,557,000 or 24.8% of sales for the same period last
year. The increase in SG&A expense dollars of Craftmade is primarily
attributable to increases in commissions and certain other costs directly
correlated to the sales increase experienced by Craftmade and to the increase in
employee costs related to the growth in the Company's labor force necessary to
meet its increased sales. The increase in SG&A expenses of Craftmade as a
percentage of sales was primarily due to the decline in lamp sales during the
fiscal year 2000 period, which resulted in the de-leveraging of SG&A expenses
compared to the same period in the previous year when lamp inventory was being
aggressively


<PAGE>   15

liquidated. For the nine-month period ending March 31, 2000, SG&A expenses of
TSI increased as a percentage of sales to 16.0% of sales compared to 15.1% for
the same period in the previous year, primarily as a result of the decline in
revenues the division experienced in the first and third quarter of fiscal 2000.

Interest Expense. For the nine-month period ended March 31, 2000, net interest
expense increased to $1,150,000 compared to $1,004,000 for the same period in
the previous year. This increase was primarily the result of a net increase in
the Company's line of credit during the nine months ended March 31, 2000. The
proceeds were utilized to repurchase the Company's common stock during the
period.

Minority Interest. Minority interest of $879,000 and $617,000 for the nine
months ended March 31, 2000 and 1999, respectively, represented the 50%
ownership of PHI by a non-Company owned member. The non-Company owned interest
has been accounted for as a minority interest.

PROVISION FOR INCOME TAXES

The provision for income taxes decreased to $1,613,000 or 36.0% of net income
before taxes but after minority interest, for the nine months ended March 31,
2000 from $2,706,000 or 36.3% for the same period of the prior year.


LIQUIDITY AND CAPITAL RESOURCES

The Company's cash decreased $436,000 from $1,563,000 at June 30, 1999 to
$1,127,000 at March 31, 2000. The Company's operating activities provided cash
of $2,737,000, primarily attributable to the Company's net income from
operations.

The $204,000 of cash used for investing activities related to the purchase of
general warehouse, office and computer equipment.

The $2,969,000 of cash used for financing activities was primarily the result of
(i) the repurchase of 998,500 shares of the Company's common stock pursuant to
the Company's stock repurchase plans, at an aggregate cost of $9,008,000, (ii)
distributions to PHI's minority interest holder of $1,021,000, (iii) principal
payments of $581,000 on the Company's notes payable, and (iv) cash dividends of
$425,000. These amounts were partially offset by the net advance of $3,750,000
under the Company's lines of credit, and the advance of $4,316,000 under the
terms of the loan modification agreement pursuant to the Company's facility note
payable. It is management's intention to repurchase the



<PAGE>   16

Company's common stock from time to time under Board approved plans as long as
the Company's common stock continues to present an attractive investment for the
Company.

At March 31, 2000, subject to continued compliance with certain covenants and
restrictions, the Company had $16,000,000 available on its line of credit, of
which $14,000,000 had been utilized. In addition, PHI had $3,000,000 available
on its line of credit, of which $1,700,000 had been utilized. The Company's
management believes that its current lines of credit, combined with cash flows
from operations, are adequate to fund the Company's current operating needs,
make annual payments approximating $1,400,000 under the facility note payable,
fund anticipated capital expenditures, fund possible future stock repurchase
plans, as well as fund its projected growth over the next twelve months.

During the third quarter of fiscal 2000, the Company entered into an agreement
with Allianz Life Insurance Company to modify the terms of the Company's
facility note payable dated December 21, 1995, to provide for an increase in the
principal amount to $9,200,000. The Company's management believes that this
facility will be sufficient for its purposes for the foreseeable future.

During the first quarter of fiscal 2000, the Company entered into a letter
agreement with Chase Bank of Texas, N.A., pursuant to which the Company
conducted a fixed-to-floating interest rate swap. See Note 4 - Derivative
Financial Instruments in the Notes to Condensed Consolidated Financial
Statements and Item 3 - Quantitative and Qualitative Disclosures about Market
Risk. The Company does not believe that this transaction will have a material
effect on its financial condition.

ITEM 3   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

The information set forth below constitutes a "forward looking statement." See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Cautionary Statement."

As a result of the terms of the Company's note payable on its operating
facility, the Company is subject to market risk associated with adverse changes
in interest rates. In an effort to reduce this market risk, the Company entered
into an interest rate swap agreement (the "Swap Agreement") with Chase Bank of
Texas, National Association ("Chase") during the first quarter of fiscal 2000.
The Swap Agreement is held by the Company for non-trading purposes and is
accounted for by the Company as a hedging instrument, with any realized gains or
losses recorded as adjustments to interest expense.


<PAGE>   17
The notiional principal amount of the Swap Agreement was $4,373,000 at March 31,
2000. During the term of the Swap Agreement, the Company receives a fixed rate
of interest (8.125%) from Chase on such Notional Amount in consideration of its
obligation to pay a floating rate of interest on such Notional Amount. The
floating rate of interest is based on the regularly published London Interbank
Offered Rate ("LIBOR")plus 2.43%. The Swap Agreement matures on December 26,
2003.

Although the Company entered into the Swap Agreement to reduce its exposure to
changes in interest rates, a sharp rise in interest rates could materially
adversely affect the financial condition and results of operations of the
Company. Under the Swap Agreement, for each one percent (1%) incremental
increase in LIBOR, the Company's annualized interest expense would increase by
approximately $44,000. Consequently, an increase in LIBOR of five percent (5%)
would result in an estimated annualized increase of interest expense for the
Company of approximately $219,000.



<PAGE>   18
                                     PART II

                                OTHER INFORMATION


Item 1.      Legal Proceedings

             not applicable

Item 2.      Changes in Securities and Use of Proceeds

             not applicable

Item 3.      Defaults Upon Senior Securities

             not applicable

Item 4.      Submission of Matters to a Vote of Security Holders

             not applicable


Item 5.      Other Information

             not applicable

Item 6.      Exhibits and Reports on Form 8-K

             a).    Exhibits

             3.1    Certificate of Incorporation of the Company, filed as
                    Exhibit 3(a)(2) to the Company's Post Effective Amendment
                    No. 1 to Form S-18 (File No. 33-33594-FW) and incorporated
                    by reference therein.

             3.2    Certificate of Amendment of Certificate of Incorporation of
                    the Company, dated March 24, 1992 and filed as Exhibit 4.2
                    to the Company's Form S-8 (File No. 333-44337) and
                    incorporated by reference therein.

             3.3    Amended and Restated Bylaws of the Company, filed as Exhibit
                    3(b)(2) to the Company's Post Effective Amendment No. 1 to
                    Form S-18


<PAGE>   19

                    (File No. 33-33594-FW) and incorporated by reference
                    therein.

             4.1    Specimen Common Stock Certificate, filed as Exhibit 4.4 to
                    the Company's Registration Statement on Form S-3 (File No.
                    333-70823) and incorporated by reference therein.

             10.1   Earnest Money contract and Design/Build Agreement dated May
                    8, 1995, between MEPC Quorum Properties II, Inc. and
                    Craftmade International, Inc. (including exhibits),
                    previously filed as an exhibit in Form 10-Q for the quarter
                    ended December 31, 1995, and herein incorporated by
                    reference.

             10.2   Assignment of Rents and Leases dated December 21, 1995,
                    between Craftmade International, Inc. and Allianz Life
                    Insurance Company of North America (including exhibits),
                    previously filed as an exhibit in Form 10-Q for the quarter
                    ended December 31, 1995, and herein incorporated by
                    reference.

             10.3   Deed of Trust, Mortgage and Security Agreement made by
                    Craftmade International, Inc., dated December 21, 1995, to
                    Patrick M. Arnold, as trustee for the benefit of Allianz
                    Life Insurance Company of North America (including
                    exhibits), previously filed as an exhibit in Form 10-Q for
                    the quarter ended December 31, 1995, and herein incorporated
                    by reference.

             10.4   Second Amended and Restated Credit Agreement dated November
                    14, 1995, among Craftmade International, Inc., Nations Bank
                    of Texas, N.A., as Agent and the Lenders defined therein
                    (including exhibits), previously filed as an exhibit in Form
                    10-Q for the quarter ended December 31, 1995, and herein
                    incorporated by reference.

             10.5   Lease Agreement dated November 30, 1995, between Craftmade
                    International, Inc. and TSI Prime, Inc., previously filed as
                    an exhibit in Form 10-Q for the quarter ended December 31,
                    1995, and herein incorporated by reference.


<PAGE>   20

             10.6   Revolving credit facility with Texas Commerce Bank,
                    previously filed as an exhibit in Form 10-K for the year
                    ended June 30, 1996, and herein incorporated by reference.

             10.7   Agreement and Plan of Merger, dated as of July 1, 1998, by
                    and among Craftmade International, Inc., Trade Source
                    International, Inc., a Delaware corporation, Neall and
                    Leslie Humphrey, John DeBlois, the Wiley Family Trust, James
                    Bezzerides, the Bezzco Inc. Employee Retirement Trust and
                    Trade Source International, Inc., a California corporation,
                    filed as Exhibit 2.1 to the Company's Current Report on Form
                    8-K filed July 15, 1998 (File No. 33-33594-FW) and herein
                    incorporated by reference.

             10.8   Voting Agreement, dated July 1, 1998, by and among James R.
                    Ridings, Neall Humphrey and John DeBlois, filed as Exhibit
                    2.1 to the Company's Current Report on Form 8-K filed July
                    15, 1998 (File No. 33-33594-FW) and herein incorporated by
                    reference.

             10.9   Third Amendment to Credit Agreement, dated July 1, 1998, by
                    and among Craftmade International, Inc., a Delaware
                    corporation, Trade Source International, Inc., a Delaware
                    corporation, Chase Bank of Texas, National Association
                    (formerly named Texas Commerce Bank, National Association)
                    and Frost National Bank (formerly named Overton Bank and
                    Trust), filed as Exhibit 2.1 to the Company's Current Report
                    on Form 8-K filed July 15, 1998 (File No. 33-33594-FW) and
                    herein incorporated by reference.

             10.10  Consent to Merger by Chase Bank of Texas, National
                    Association and Frost National Bank, filed as Exhibit 2.1 to
                    the Company's Current Report on Form 8-K filed July 15, 1998
                    (File No. 33-33594-FW) and herein incorporated by reference.

             10.11  Employment Agreement, dated July 1, 1998, by and among
                    Craftmade International, Inc., Trade Source International,
                    Inc., a Delaware corporation, and Neall Humphrey, filed as
                    Exhibit 2.1 to the Company's Current Report



<PAGE>   21

                    on Form 8-K filed July 15, 1998 (File No. 33-33594-FW) and
                    herein incorporated by reference.

             10.12  Employment Agreement, dated July 1, 1998, by and among
                    Craftmade International, Inc., Trade Source International,
                    Inc., a Delaware corporation, and Leslie Humphrey, filed as
                    Exhibit 2.1 to the Company's Current Report on Form 8-K
                    filed July 15, 1998 (File No. 33-33594-FW) and herein
                    incorporated by reference.

             10.13  Employment Agreement, dated July 1, 1998, by and among
                    Craftmade International, Inc., Trade Source International,
                    Inc., a Delaware corporation, and John DeBlois, filed as
                    Exhibit 2.1 to the Company's Current Report on Form 8-K
                    filed July 15, 1998 (File No. 33-33594-FW) and herein
                    incorporated by reference.

             10.14  Registration Rights Agreement, dated July 1, 1998, by and
                    among Craftmade International, Inc., Neall and Leslie
                    Humphrey and John DeBlois, filed as Exhibit 2.1 to the
                    Company's Current Report on Form 8-K filed July 15, 1998
                    (File No. 33-33594-FW) and herein incorporated by reference.

             10.15  ISDA Master Agreement and Schedule, dated June 17, 1999, by
                    and among Chase Bank of Texas, National Association,
                    Craftmade International, Inc., Durocraft International, Inc.
                    and Trade Source International, Inc., filed as Exhibit 10.15
                    to the Company's Quarterly Report on Form 10Q filed November
                    12, 1999 (File No. 000-26667) and herein incorporated by
                    reference.

             10.16  Confirmation under ISDA Master Agreement, dated July 23,
                    1999, from Chase Bank of Texas, National Association to
                    Craftmade International, Inc., filed as Exhibit 10.165 to
                    the Company's Quarterly Report on Form 10Q filed November
                    12, 1999 (File No. 000-26667) and herein incorporated by
                    reference.

            10.17*  Fourth Amendment to Credit Agreement, dated April 2, 1999,
                    by and among Craftmade



<PAGE>   22

                    International, Inc., a Delaware corporation, Durocraft
                    International, Inc., a Texas Corporation, Trade Source
                    International, Inc., a Delaware Corporation, C/D/R
                    Incorporated, a Delaware corporation, Chase Bank of Texas,
                    National Association and The Frost National Bank.

             10.18* Letter Agreement Concerning Fifth Amendment to Credit
                    Agreement, dated August 11, 1999, from Chase Bank of Texas,
                    N.A. and Frost National Bank to Craftmade International,
                    Inc., Durocraft International, Inc., Trade Source
                    International, Inc., and C/D/R Incorporated.

             10.19* Sixth Amendment to Credit Agreement, dated November 12,
                    1999, by and among Craftmade International, Inc., a Delaware
                    corporation, Durocraft International, Inc., a Texas
                    Corporation, Trade Source International, Inc., a Delaware
                    Corporation, C/D/R Incorporated, a Delaware corporation,
                    Chase Bank of Texas, National Association and The Frost
                    National Bank.

             10.20* First Modification Agreement, dated March 9, 2000, by and
                    between Craftmade International, Inc., a Delaware
                    corporation, and Allianz Life Insurance Company of North
                    America, a Minnesota corporation.

             27.1*  Financial Data Schedule.

             -----------
             * Filed herewith.


        b).  Reports on Form 8-K

             None.

<PAGE>   23
                                    SIGNATURE

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                               CRAFTMADE INTERNATIONAL, INC.
                                               -----------------------------
                                                       (Registrant)



Date     May 12, 2000                          /s/  James R. Ridings
    ---------------------                      ---------------------------
                                                     JAMES R. RIDINGS
                                                    President and Chief
                                                     Executive Officer


Date     May 12, 2000                          /s/  Kathleen B. Oher
    ---------------------                      ---------------------------
                                                    KATHLEEN B. OHER
                                                  Chief Financial Officer

<PAGE>   24



                                Index to Exhibits

<TABLE>
<CAPTION>
Exhibit
Number                              Description
-------                             -----------
<S>               <C>
3.1               Certificate of Incorporation of the Company, filed as Exhibit
                  3(a)(2) to the Company's Post Effective Amendment No. 1 to
                  Form S-18 (File No. 33-33594-FW) and incorporated by reference
                  therein.

3.2               Certificate of Amendment of Certificate of Incorporation of
                  the Company, dated March 24, 1992 and filed as Exhibit 4.2 to
                  the Company's Form S-8 (File No. 333-44337) and incorporated
                  by reference therein.

3.3               Amended and Restated Bylaws of the Company, filed as Exhibit
                  3(b)(2) to the Company's Post Effective Amendment No. 1 to
                  Form S-18 (File No. 33-33594-FW) and incorporated by reference
                  therein.

4.1               Specimen Common Stock Certificate, filed as Exhibit 4.4 to the
                  Company's Registration Statement on Form S-3 (File No.
                  333-70823) and incorporated by reference therein.

10.1              Earnest Money contract and Design/Build Agreement dated May 8,
                  1995, between MEPC Quorum Properties II, Inc. and Craftmade
                  International, Inc. (including exhibits), previously filed as
                  an exhibit in Form 10-Q for the quarter ended December 31,
                  1995, and herein incorporated by reference.

10.2              Assignment of Rents and Leases dated December 21, 1995,
                  between Craftmade International, Inc. and Allianz Life
                  Insurance Company of North America (including exhibits),
                  previously filed as an exhibit in Form 10-Q for the quarter
                  ended December 31, 1995, and herein incorporated by reference.

10.3              Deed of Trust, Mortgage and Security Agreement made by
                  Craftmade International, Inc., dated December 21, 1995, to
                  Patrick M. Arnold, as trustee for the benefit of Allianz Life
                  Insurance Company of North America (including exhibits),
                  previously filed as an exhibit in Form 10-Q for the quarter
                  ended December 31, 1995, and herein incorporated by reference.

10.4              Second Amended and Restated Credit Agreement dated November
                  14, 1995, among Craftmade International, Inc., Nations Bank of
                  Texas, N.A., as Agent and the Lenders defined therein
                  (including exhibits), previously filed as
</TABLE>



<PAGE>   25

<TABLE>
<S>               <C>
                  an exhibit in Form 10-Q for the quarter ended December 31,
                  1995, and herein incorporated by reference.

10.5              Lease Agreement dated November 30, 1995, between Craftmade
                  International, Inc. and TSI Prime, Inc., previously filed as
                  an exhibit in Form 10-Q for the quarter ended December 31,
                  1995, and herein incorporated by reference.

10.6              Revolving credit facility with Texas Commerce Bank, previously
                  filed as an exhibit in Form 10-K for the year ended June 30,
                  1996, and herein incorporated by reference.

10.7              Agreement and Plan of Merger, dated as of July 1, 1998, by and
                  among Craftmade International, Inc., Trade Source
                  International, Inc., a Delaware corporation, Neall and Leslie
                  Humphrey, John DeBlois, the Wiley Family Trust, James
                  Bezzerides, the Bezzco Inc. Employee Retirement Trust and
                  Trade Source International, Inc., a California corporation,
                  filed as Exhibit 2.1 to the Company's Current Report on Form
                  8-K filed July 15, 1998 (File No. 33-33594-FW) and herein
                  incorporated by reference.

10.8              Voting Agreement, dated July 1, 1998, by and among James R.
                  Ridings, Neall Humphrey and John DeBlois, filed as Exhibit 2.1
                  to the Company's Current Report on Form 8-K filed July 15,
                  1998 (File No. 33-33594-FW) and herein incorporated by
                  reference.

10.9              Third Amendment to Credit Agreement, dated July 1, 1998, by
                  and among Craftmade International, Inc., a Delaware
                  corporation, Trade Source International, Inc., a Delaware
                  corporation, Chase Bank of Texas, National Association
                  (formerly named Texas Commerce Bank, National Association) and
                  Frost National Bank (formerly named Overton Bank and Trust),
                  filed as Exhibit 2.1 to the Company's Current Report on Form
                  8-K filed July 15, 1998 (File No. 33-33594-FW) and herein
                  incorporated by reference.

10.10             Consent to Merger by Chase Bank of Texas, National Association
                  and Frost National Bank, filed as Exhibit 2.1 to the Company's
                  Current Report on Form 8-K filed July 15, 1998 (File No.
                  33-33594-FW) and herein incorporated by reference.

10.11             Employment Agreement, dated July 1, 1998, by and among
                  Craftmade International, Inc., Trade Source International,
                  Inc., a Delaware corporation, and Neall
</TABLE>



<PAGE>   26

<TABLE>
<S>               <C>
                  Humphrey, filed as Exhibit 2.1 to the Company's Current Report
                  on Form 8-K filed July 15, 1998 (File No. 33-33594-FW) and
                  herein incorporated by reference.

10.12             Employment Agreement, dated July 1, 1998, by and among
                  Craftmade International, Inc., Trade Source International,
                  Inc., a Delaware corporation, and Leslie Humphrey, filed as
                  Exhibit 2.1 to the Company's Current Report on Form 8-K filed
                  July 15, 1998 (File No. 33-33594-FW) and herein incorporated
                  by reference.

10.13             Employment Agreement, dated July 1, 1998, by and among
                  Craftmade International, Inc., Trade Source International,
                  Inc., a Delaware corporation, and John DeBlois, filed as
                  Exhibit 2.1 to the Company's Current Report on Form 8-K filed
                  July 15, 1998 (File No. 33-33594-FW) and herein incorporated
                  by reference.

10.14             Registration Rights Agreement, dated July 1, 1998, by and
                  among Craftmade International, Inc., Neall and Leslie Humphrey
                  and John DeBlois, filed as Exhibit 2.1 to the Company's
                  Current Report on Form 8-K filed July 15, 1998 (File No.
                  33-33594-FW) and herein incorporated by reference.

10.15             ISDA Master Agreement and Schedule, dated June 17, 1999, by
                  and among Chase Bank of Texas, National Association, Craftmade
                  International, Inc., Durocraft International, Inc. and Trade
                  Source International, Inc., filed as Exhibit 10.15 to the
                  Company's Quarterly Report on Form 10Q filed November 12, 1999
                  (File No. 000-26667) and herein incorporated by reference.

10.16             Confirmation under ISDA Master Agreement, dated July 23, 1999,
                  from Chase Bank of Texas, National Association to Craftmade
                  International, Inc., filed as Exhibit 10.16 to the Company's
                  Quarterly Report on Form 10Q filed November 12, 1999 (File No.
                  000-26667) and herein incorporated by reference.

10.17*            Fourth Amendment to Credit Agreement, dated April 2, 1999, by
                  and among Craftmade International, Inc., a Delaware
                  corporation, Durocraft International, Inc., a Texas
                  corporation, Trade Source International, Inc., a Delaware
                  corporation, C/D/R Incorporated, a Delaware corporation, Chase
                  Bank of Texas, National Association and The Frost National
                  Bank.
</TABLE>


<PAGE>   27
<TABLE>
<S>               <C>
10.18*            Letter Agreement Concerning Fifth Amendment to Credit
                  Agreement, dated August 11, 1999, from Chase Bank of Texas,
                  N.A. and Frost National Bank to Craftmade International, Inc.,
                  Durocraft International, Inc., Trade Source International,
                  Inc., and C/D/R Incorporated.

10.19*            Sixth Amendment to Credit Agreement, dated November 12, 1999,
                  by and among Craftmade International, Inc., a Delaware
                  corporation, Durocraft International, Inc., a Texas
                  corporation, Trade Source International, Inc., a Delaware
                  corporation, C/D/R Incorporated, a Delaware corporation, Chase
                  Bank of Texas, National Association and The Frost National
                  Bank.

10.20*            First Modification Agreement, dated March 9, 2000, by and
                  between Craftmade International, Inc., a Delaware corporation,
                  and Allianz Life Insurance Company of North America, a
                  Minnesota corporation.

27.1*            Financial Data Schedule.

</TABLE>

-------------
*Filed herewith.