<PAGE>
                       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, 2003 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
----------------------
       000-26667

                          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       .
----------      ----------

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

Yes      .      No      x.
----------      ----------

5,410,258 shares of Common Stock were outstanding as of April 30, 2003.

<PAGE>

                  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,
                  2003 and 2002.

                  Condensed Consolidated Balance Sheets as of
                  March 31, 2003 and June 30, 2002.

                  Condensed Consolidated Statements of Cash
                  Flows for the nine months ended March 31,
                  2003 and 2002.

                  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.

         Item 4.  Controls and Procedures.


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 Stockholders

         Item 5.  Other Information

         Item 6.  Exhibits and Reports on Form 8-K


                                       2
<PAGE>

                 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME


<Table>
<Caption>
                                              FOR THE THREE MONTHS ENDED     FOR THE NINE MONTHS ENDED
                                              --------------------------     -------------------------
                                              March 31,        March 31,     March 31,       March 31,
                                                2003             2002          2003            2002
                                              ---------        ---------     ---------       ---------
                                                        (In thousands except per share data)
<S>                                           <C>              <C>           <C>             <C>
Net Sales                                     $  17,878        $  14,988     $  52,860       $  53,207
Cost of goods sold                               12,511           10,094        36,206          36,524
                                              ---------        ---------     ---------       ---------

Gross profit                                      5,367            4,894        16,654          16,683
                                              ---------        ---------     ---------       ---------

Selling, general and
  administrative expenses                         3,813            3,768        11,179          11,267
Interest expense, net                               218              159           630             705
Depreciation and amortization                       160              133           471             402
                                              ---------        ---------     ---------       ---------

      Total expenses                              4,191            4,060        12,280          12,374
                                              ---------        ---------     ---------       ---------

Income before equity in earnings of 50%
  owned investees and income taxes                1,176              834         4,374           4,309

Equity in earnings of 50% owned investees
  before income taxes                             1,043              676         3,464           1,993
                                              ---------        ---------     ---------       ---------

Income before income taxes                        2,219            1,510         7,838           6,302

Provision for income taxes                          863              541         2,910           2,255
                                              ---------        ---------     ---------       ---------

Net income                                    $   1,356        $     969     $   4,928       $   4,047
                                              =========        =========     =========       =========

Basic earnings per common share               $    0.25        $    0.16     $    0.89       $    0.68
                                              =========        =========     =========       =========

Diluted earnings per common share             $    0.25        $    0.16     $    0.88       $    0.68
                                              =========        =========     =========       =========


Cash dividends declared
  per common share                            $    0.07        $    0.07     $    0.21       $    0.21
                                              =========        =========     =========       =========
</Table>


                       SEE ACCOMPANYING NOTES TO CONDENSED
                       CONSOLIDATED FINANCIAL STATEMENTS


                                       3
<PAGE>
                 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS


                                     ASSETS

<Table>
<Caption>
                                              March 31,      June 30,
                                                2003           2002
                                              ---------      ---------
                                             (Unaudited)

                                                  (In thousands)
<S>                                           <C>            <C>
Current assets:
  Cash                                        $   2,558      $     624
  Accounts receivable - net of
    allowance of $150 and $150
    respectively                                 12,173         15,077
  Receivables from 50% owned investees              240          2,227
  Inventory                                      10,101          8,570
  Deferred income taxes                             588            588
  Prepaid expenses and other
    current assets                                  544            453
                                              ---------      ---------

     Total current assets                        26,204         27,539
                                              ---------      ---------

Property and equipment, net
  Land                                            1,535          1,535
  Building                                        7,784          7,784
  Office furniture and equipment                  3,801          3,694
  Leasehold improvements                            259            253
                                              ---------      ---------
                                                 13,379         13,266

Less: accumulated depreciation                   (3,931)        (3,460)
                                              ---------      ---------

     Total property and equipment, net            9,448          9,806
                                              ---------      ---------

Goodwill, net of accumulated
  amortization of $1,204,000                      4,735          4,735
Deferred income tax                                 156            156
Investment in 50% owned investees                 3,847          2,244
Other assets                                         12             12
                                              ---------      ---------

     Total other assets                           8,750          7,147
                                              ---------      ---------

Total assets                                  $  44,402      $  44,492
                                              =========      =========
</Table>


                       SEE ACCOMPANYING NOTES TO CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS


                                       4
<PAGE>
                 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY


<Table>
<Caption>
                                                     March 31,        June 30,
                                                       2003             2002
                                                    -----------      -----------
                                                    (Unaudited)

                                                (In thousands except for share data)
<S>                                                 <C>              <C>
Current liabilities:
  Note payable - current                            $       792      $       696
  Revolving lines of credit                              13,204            9,034
  Accounts payable                                        3,848            3,067
  Commissions payable                                       238              274
  Income taxes payable                                    1,061              567
  Accrued liabilities                                     1,894            2,484
                                                    -----------      -----------
    Total current liabilities                            21,037           16,122

Other non-current liabilities:
  Note payable - long term                                4,531            5,746
                                                    -----------      -----------

  Total liabilities                                      25,568           21,868
                                                    -----------      -----------
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, 9,390,535 and
    9,390,535 shares issued, respectively                    94               94
Additional paid-in capital                               13,422           13,261
Unearned deferred compensation                              (51)             (76)
Retained earnings                                        34,150           30,380
                                                    -----------      -----------
                                                         47,647           43,691
  Less: treasury stock, 4,001,277 and
    3,446,477 common shares at cost,
    and 32,000 preferred shares at cost                 (28,813)         (21,067)
                                                    -----------      -----------
      Total Stockholders' Equity                         18,834           22,624
                                                    -----------      -----------

Total liabilities and stockholders' equity          $    44,402      $    44,492
                                                    ===========      ===========
</Table>


                       SEE ACCOMPANYING NOTES TO CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS


                                       5
<PAGE>
                 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
                    FOR THE NINE MONTHS ENDED MARCH 31, 2003


<Table>
<Caption>
(In thousands)                                                                                                         ACCUMULATED
                                                                  SERIES A      ADDITIONAL    UNEARNED                    OTHER
                                                                  PREFERRED      PAID-IN      DEFERRED      RETAINED  COMPREHENSIVE
                                        VOTING COMMON STOCK         STOCK        CAPITAL    COMPENSATION    EARNINGS      INCOME
                                       ----------------------     ---------     ----------  ------------    --------  -------------
                                        SHARES        AMOUNT
                                       --------      --------
<S>                                    <C>           <C>          <C>           <C>         <C>             <C>       <C>
Balance as of June 30, 2002               9,391      $     94      $     32      $ 13,261     $    (76)     $ 30,380     $     --

Comprehensive income:

  Net income for the nine months
    ended March 31, 2003                                                                                       4,928
                                       --------      --------      --------      --------     --------      --------     --------

Total comprehensive income                                                                                     4,928

Deferred Compensation Earned                                                                        25

Stock Repurchase

Exercise of Employee Stock Options           24             0                         161

Cash Dividends                                                                                                (1,158)
                                       --------      --------      --------      --------     --------      --------     --------
Balance as of March 31, 2003              9,415      $     94      $     32      $ 13,422     $    (51)     $ 34,151     $      0
                                       ========      ========      ========      ========     ========      ========     ========

<Caption>
(In thousands)


                                          TREASURY STOCK
                                       ---------------------
                                        SHARES       AMOUNT        TOTAL
                                       --------     --------      --------
<S>                                    <C>          <C>           <C>
Balance as of June 30, 2002               3,478     $(21,067)     $ 22,624

Comprehensive income:

  Net income for the nine months
    ended March 31, 2003                                   0         4,928
                                       --------     --------      --------

Total comprehensive income                                           4,928

Deferred Compensation Earned                                            25

Stock Repurchase                            558       (7,746)       (7,746)

Exercise of Employee Stock Options                                     161

Cash Dividends                                                      (1,158)
                                       --------     --------      --------
Balance as of March 31, 2003              4,036     $(28,813)     $ 18,835
                                       ========     ========      ========
</Table>


                       SEE ACCOMPANYING NOTES TO CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS


                                       6
<PAGE>
                 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)


<Table>
<Caption>
                                                          FOR THE NINE MONTHS ENDED
                                                          -------------------------
                                                          March 31,       March 31,
                                                             2003           2002
                                                          ---------       ---------
                                                                (In thousands)

<S>                                                       <C>             <C>
Net cash provided by operating activities:                $   7,739       $  13,462
                                                          ---------       ---------

Cash flows from investing activities:
       Net additions to equipment                              (114)           (627)
                                                          ---------       ---------
Net cash used for investing activities                         (114)           (627)
                                                          ---------       ---------

Cash flows from financing activities:
       Net proceeds from (payment to) lines of credit         4,170          (6,625)
       Principal payments on note payable                    (1,119)         (2,009)
       Stock repurchase                                      (7,746)             --
       Stock options exercised                                  162             418
       Cash dividends                                        (1,158)         (1,249)
                                                          ---------       ---------
Net cash used for financing activities                       (5,690)         (9,465)
                                                          ---------       ---------
Net increase in cash                                          1,935           3,370
Cash at beginning of period                                     624             723
                                                          ---------       ---------
Cash at end of period                                     $   2,558       $   4,093
                                                          =========       =========
</Table>


                       SEE ACCOMPANYING NOTES TO CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS


                                       7
<PAGE>

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

                                 MARCH 31, 2003
                                   (Unaudited)


Note 1 - BASIS OF PREPARATION AND PRESENTATION

The accompanying unaudited 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 wholly-owned subsidiaries; 50% owned
subsidiaries are accounted for using the equity method. 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 incorporated by
reference in the Company's Annual Report on Form 10-K, as amended, for the
fiscal year ended June 30, 2002. The financial data for the interim periods may
not necessarily be indicative of results to be expected for the year.

Employee stock-based compensation

The Company has adopted SFAS 123, "Accounting for Stock-Based Compensation," on
a disclosure basis only. The Company measures compensation costs under
Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued
to Employees" and its related interpretations. Had compensation cost for all of
the Company's stock option plans been determined based upon fair value at the
grant dates consistent with the methodology prescribed in FAS 123, the Company's
net income and net income per share would have changed to the pro forma amounts
listed below using the weighted average fair values indicated.

                                       8
<PAGE>
<Table>
<Caption>
                                                 THREE MONTHS     THREE MONTHS
                                                ENDED MARCH 31,  ENDED MARCH 31,
                                                     2003             2002
                                                ---------------  ---------------
<S>                                             <C>              <C>
Net income, as reported                            $   1,356        $     969
Net income, pro forma                                  1,217              828

Basic earnings per share, as reported                    .25              .16
Basic earnings per share, pro forma                      .23              .14
Diluted earnings per share, pro forma                    .25              .16
Diluted earnings per share, as reported                  .22              .14

Weighted average fair value of options granted     $    6.02        $    5.93
</Table>


<Table>
<Caption>
                                                  NINE MONTHS      NINE MONTHS
                                                ENDED MARCH 31,  ENDED MARCH 31,
                                                      2003            2002
                                                ---------------  ---------------
<S>                                             <C>              <C>
Net income as reported                             $   4,928     $   4,047
Net income, pro forma                                  4,789         3,906

Basic earnings per share, as reported                    .89           .68
Basic earnings per share, pro forma                      .86           .66
Diluted earnings per share, as reported                  .88           .68
Dilted earnings per share, pro forma                     .85           .65

Weighted average fair value of options granted     $    6.01     $    5.92
</Table>


                                       9
<PAGE>
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                        OF CRAFTMADE INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                                 March 31, 2003
                                   (Unaudited)
                                 (In Thousands)


Note 2 - 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           March         March          March
                               31, 2003        31, 2002      31, 2003       31, 2002
                              ----------      ----------    ----------     ----------
                                        (In thousands except per share data)
<S>                           <C>             <C>           <C>            <C>
Basic and Diluted EPS

Numerator:
Net Income                    $    1,356      $      969    $    4,928     $    4,047
                              ----------      ----------    ----------     ----------

Denominator:
Common Shares Outstanding          5,384           5,957         5,565          5,930
                              ----------      ----------    ----------     ----------
Basic EPS                     $     0.25      $     0.16    $     0.89     $     0.68
                              ==========      ==========    ==========     ==========

Denominator:
Common Shares Outstanding          5,384           5,957         5,565          5,930
Options                               52              55            58             62
                              ----------      ----------    ----------     ----------
Total Shares                       5,436           6,012         5,623          5,992
                              ==========      ==========    ==========     ==========

Diluted EPS                   $     0.25      $     0.16    $     0.88     $     0.68
                              ==========      ==========    ==========     ==========
</Table>


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

                                 March 31, 2003
                                   (Unaudited)
                                 (In Thousands)


Note 3 - INVESTMENT IN 50% OWNED INVESTEES

Combined summarized financial information for Design Trends, LLC ("Design
Trends") and Prime/Home Impressions, LLC ("PHI") at March 31, 2003 and 2002 and
for the three and nine months ended is as follows:

<Table>
<Caption>
                                  FOR THE THREE MONTHS ENDED      FOR THE NINE MONTHS ENDED
                                  --------------------------      -------------------------
                                   March             March         March            March
                                  31, 2003          31, 2002      31, 2003         31, 2002
                                  --------          --------      --------         --------
<S>                               <C>               <C>           <C>              <C>
Net Sales                         $  8,900          $  7,146      $ 29,031         $ 23,730
Gross profit                         2,843             2,111         9,518            6,469
Income before income taxes           2,086             1,320         6,918            3,798
</Table>

<Table>
<Caption>
                                   March             March
                                  31, 2003          31, 2002
                                  --------          --------
<S>                               <C>               <C>
Accounts receivable - net            3,769             3,206
Inventories                          3,784             3,209
Total current assets                 8,875             7,058
Total assets                        10,935             9,873
Revolving line of credit               241             1,300
Note payable - current                 153                --
Total current liabilities            5,307             6,159
Long term debt                         277                --
Total liabilities                    5,583             6,158
Total partners' captial              5,351             3,715
</Table>

The Company received distributions of $1,855,000 and $516,000 for the nine
months ended March 31, 2003 and 2002 respectively, from these two 50% owned
investees.

The Company's 50% owned investees operate in the form of partnerships and,
consequently, do not file federal income tax returns. Instead, the Company's
share of their income is reported in the Company's federal tax return.


                                       11
<PAGE>
Note 4 - TRANSACTIONS WITH 50% OWNED INVESTEES

There are no sales between the Company and its 50% investees or between the
investees. The investees utilize the Company's Coppell, Texas distribution
facility and Company personnel in the conduct of their operations.

The Company charges Design Trends for facility rent and payroll costs for those
full time Company employees when they work directly in Design Trends operations.
Facility rent is based on total square footage occupied by Design Trends and
payroll costs represent actual costs for those employees. No allocation of
indirect personnel costs, including management level personnel, is included in
the charge to Design Trends.

The Company utilizes borrowings under its line of credit to provide Design
Trends with advances for its working capital needs. The Company charges Design
Trends interest on these advances at its bank's prime rate plus two percentage
points and interest is calculated on the average outstanding monthly balance.

PHI reimburses the Company $30,000 per month for general warehouse and
administrative expenses.

Craftmade's charges to its 50% owned investees are summarized as follows for the
three months and nine months ended (in thousands):

<Table>
<Caption>
                                   Three Months Ending
                                March 31,        March 31,
                                   2003             2002
                                ---------        ---------
<S>                             <C>              <C>
Rent - Design Trends            $  60,000        $  60,000
Payroll - Design Trends         $ 255,000        $ 231,000
Interest - Design Trends           12,000        $  61,000
Administrative - PHI            $  90,000        $  90,000
</Table>

<Table>
<Caption>
                                    Nine Months Ending
                                March 31,        March 31,
                                  2003             2002
                                ---------        ---------
<S>                             <C>              <C>
Rent - Design Trends            $ 180,000        $ 180,000
Payroll - Design Trends         $ 749,000        $ 675,000
Interest - Design Trends        $  32,000        $ 377,000
Administrative - PHI            $ 270,000        $ 270,000
</Table>


                                       12
<PAGE>
Note 5 - SEGMENT INFORMATION

The Company has two reportable segments, Craftmade and Trade Source
International, Inc. ("TSI"). The Company is organized on a combination of
product type and customer base. The Craftmade segment primarily derives its
revenue from home furnishings including ceiling fans, light kits, bathstrip
lighting and lamps offered primarily through lighting showrooms, certain major
retail chains and catalog houses. The TSI segment derives its revenue from
outdoor lighting, portable lamps, indoor 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, 2002. The Company evaluates the
performance of its segments and allocates resources to them based on their
operating profit and loss and cash flows.

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, 2003

Net sales from external customers        $ 11,146        $  6,732         $ 17,878
Operating profit (loss)                     1,521            (127)           1,394

For the three months ended
March 31, 2002

Net sales from external customers        $ 11,375        $  3,613         $ 14,988
Operating profit (loss)                     1,498            (505)             993

For the nine months ended
March 31, 2003

Net sales from external customers        $ 35,568        $ 17,292         $ 52,860
Operating profit (loss)                     5,366            (362)           5,004

For the nine months ended
March 31, 2002

Net sales from external customers        $ 36,351        $ 16,856         $ 53,207
Operating profit                            5,208            (194)           5,014
</Table>


                                       13
<PAGE>

Note 6 - NEW ACCOUNTING PRONOUNCEMENTS

The FASB issued Interpretation No. 46 (FIN 46), "Consolidation of Variable
Interest Entities," ("FIN 46"), which is effective immediately to variable
interest entities created after January 31, 2003, and applies in the first
interim period beginning after June 15, 2003 to variable interest entities
created before February 1, 2003. FIN 46 addresses the consolidation of variable
interest entities through identification of a primary beneficiary. We do not
expect the adoption of this standard to have a material impact on our financial
statements in 2003.

In November of 2002, the Emerging Issues Task Force ("EITF") reached a consensus
on Issue No. 02-16, "Accounting by a Customer (Including a Reseller) for Certain
Consideration Received from a Vendor" ("EITF 02-16"), effective for fiscal years
beginning after December 15, 2002. EITF 02-16 addresses the accounting for cash
consideration given to a reseller of a vendor's products from a vendor. EITF
02-16 indicates that, generally, cash consideration received by a customer from
a vendor is presumed to be a reduction in the price of the vendor's products or
services and should, therefore, be characterized as a reduction of cost of sales
when recognized in the customer's income statement. EITF 02-16 also indicates
that cash consideration would be characterized as revenue if the vendor
receives, or will receive, an identifiable benefit (goods or services) in
exchange for the consideration, provided that the identified benefit is
sufficiently separable from the customer's purchase of the vendor's products and
the customer can reasonably estimate the fair value of the benefit provided. We
do not expect the adoption of this standard to have a material impact on our
financial statements in 2003.


                                       14
<PAGE>

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 in this
document contain forward-looking statements. There are certain important factors
which could cause actual results to differ materially from those anticipated by
these forward-looking statements. Some of the important factors which would
cause actual results to differ materially from those in the forward-looking
statements include, among other things, TSI's, Design Trends' and PHI's
dependence on sales to select mass merchandiser customers and changes in those
relationships, changes in anticipated levels of sales, whether due to future
national or regional economic and competitive conditions, changes in
relationships with Craftmade customers, customer acceptance of existing and new
products, pricing pressures due to excess capacity, cost increases, changes in
tax or interest rates, unfavorable economic and political developments in Asia
(the location of the Company's primary vendors) and changes in the foreign
currency exchange rate between the U.S. and Taiwan dollar, 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 of the Company.

Results of Operations

Three Months Ended March 31, 2003 Compared to Three Months Ended March 31, 2002.

Net Sales. Net sales for the Company increased $2,890,000 or 19.3% to
$17,878,000 for the three month period ended March 31, 2003 compared to
$14,988,000 for the same three month period last year. Net sales from the
Craftmade division decreased $229,000, or 2.0%, to $11,146,000 for the three
months ended March 31, 2003 from $11,375,000 for the same three month period
last year. The decrease in sales of the Craftmade division was primarily due to
lower unit sales and lower prices on certain discontinued models of fans that
were replaced by new models that were introduced in the January lighting market.
This was a continuation of a trend that began in the second quarter of fiscal
2003. Management expects the showroom division to generate positive sales growth
in fiscal 2004 as a result of new product introductions and fewer close-out
sales.

Net sales of the TSI division increased $3,119,000, or 86.3%, to $6,732,000 for
the three months ended March 31, 2003 compared to $3,613,000 for the same
three-month period last year. The increase in sales of the TSI division was due
to increased sales to a mass retail customer as a result of a new product roll
out that included five new outdoor lighting designs and one promotional item.


                                       15
<PAGE>
Gross Profit. Gross profit of the Company as a percentage of sales decreased to
30.0% of net sales for the three months ended March 31, 2003, compared to 32.7%
for the same period of 2002. The gross margin of the Craftmade division
decreased to 39.7% of sales from 40.8% of net sales in the year-ago period,
primarily due to lower prices on certain close-out models, as discussed above.
The gross margin of the TSI division improved to 13.9% of sales for the three
months ended March 31, 2003 compared to 7.1% of sales in the year ago period.
The improvement in the TSI gross margin was primarily due to a write down of
slow moving inventory in the amount of $200,000 in the third quarter of fiscal
2002 that did not occur in the third quarter of fiscal 2003.

Selling, General and Administrative Expenses. Total selling, general and
administrative ("SG&A") expenses of the Company increased $45,000 to $3,813,000
or 21.3% of net sales for the three months ended March 31, 2003 from $3,768,000
or 25.1% of net sales for the same period last year. Total SG&A expenses of the
showroom division declined $264,000 to $2,767,000 or 24.8% of sales compared to
$3,031,000 or 26.6% of sales for the same period in the previous period. The
decline in SG&A expenses of the Craftmade division in dollars and as a
percentage of sales was primarily due to expenses incurred in connection with
the company's logistics and accounting systems upgrade in the three months ended
March 31, 2002 which did not occur in the same period this year. Total SG&A
expenses of the TSI division increased $309,000 to $1,046,000 or 15.5% of sales
compared to $737,000 or 20.4% of sales for the same period in the previous year.
The improvement in SG&A as a percentage of sales was related to the effect of
increased revenue leveraging down fixed SG&A expenses. The increase in SG&A
expense dollars was related to an increase in selling costs and payroll related
costs to support the increase in sales during the period.

Interest Expense. Net interest expense of the Company increased $59,000 to
$218,000 for the three months ended March 31, 2003 from $159,000 for the same
three-month period last year. The increase in net interest expense was related
to a decline in interest income due to a decrease in the outstanding balance of
the receivable from the Company's 50% owned subsidiary, Design Trends.

Equity in Earnings of 50% Owned Investees. Income from investees, representing
the Company's 50% ownership of Prime/Home Impressions, LLC ("PHI") and Design
Trends, LLC ("Design Trends") increased $367,000 to $1,043,000 from $676,000 for
the three months ended March 31, 2003 and 2002, respectively. The increase in
income from investees was primarily due to an increase in sales of Design
Trends' portable lamp program, which generated $1,282,000 in incremental revenue
for Design Trends during the period. In addition, PHI generated incremental
sales of $473,000 during the quarter.


                                       16
<PAGE>
Provision For Income Taxes. The provision for income taxes increased $322,000 to
$863,000 or 38.9% of net income before taxes for the three months ended March
31, 2003, from $541,000 or 35.8% for the same period of the prior year.

Results of Operations

Nine Months Ended March 31, 2003 Compared to Nine Months Ended March 31, 2002

Net Sales. Net sales for the Company decreased $347,000, or 0.7%, to $52,860,000
for the nine month period ended March 31, 2003 from $53,207,000 for the same
nine-month period last year. Net sales of the Craftmade division decreased
$783,000, or 2.2%, to $35,569,000 for the nine months ended March 31, 2003 from
$36,351,000 for the same nine-month period last year. The decline in sales of
the Craftmade division was primarily due to lower unit sales and lower prices on
certain discontinued models of fans, as discussed above. Net sales of the TSI
division increased $436,000, or 2.6%, to $17,292,000 for the nine months ended
March 31, 2003 from $16,856,000 for the same nine-month period last year. The
increase was primarily attributable to an increase in sales during the third
quarter of fiscal 2003 to a mass retail customer as a result of a new product
roll out that included five new outdoor lighting designs and one new promotional
item. The increase was partially offset by a first-quarter decline in direct
shipment sales of outdoor lighting to a mass retail customer.

Gross Profit. Gross profit of the Company as a percentage of sales remained
relatively unchanged at 31.5% of net sales for the nine months ended March 31,
2003 compared to 31.4% for the same period of 2002. The gross margin of the
Craftmade division increased to 39.6% of sales from 39.2% of sales in the year
ago period. The improvement in the gross margin of the Craftmade division was
due primarily to the first quarter improvement in the exchange rate of the U.S.
dollar relative to the Taiwanese dollar. The gross margin of the TSI division
improved slightly to 14.8% of sales for the nine months ended March 31, 2003
compared to 14.5% of sales in the year ago period. The improvement in the gross
margin of TSI was due to a smaller write down of slow moving inventory in the
nine-month period ended March 31, 2003 compared to the same period last year.
The TSI division recorded an inventory write-down of $426,000 and $500,000 in
the nine-month period ended March 31, 2003 and March 31, 2002, respectively.

Selling, General and Administrative Expenses. Total selling, general and
administrative ("SG&A") expenses of the Company decreased $88,000 to $11,179,000
or 21.1% of net sales for the nine


                                       17
<PAGE>

months ended March 31, 2003 from $11,267,000 or 21.2% of net sales for the same
nine-month period last year. Total SG&A expenses of the Craftmade division
decreased $384,000 to $8,319,000 or 23.4% of sales compared to $8,703,000 or
23.9% of sales for the same period in the previous year. The decline in SG&A
expense dollars of Craftmade is primarily attributable to lower selling costs
associated with the decline in sales of the Craftmade division. Total SG&A
expenses of the TSI division increased $296,000 to $2,860,000 or 16.5% of sales
from $2,564,000 or 15.2% of sales for the same period in the previous year. The
increase in TSI's SG&A expenses as a percentage of sales was related to an
increase in product development costs and payroll related expenses to support
the increase in sales during the period.

Interest Expense. Net interest expense of the Company decreased $75,000 to
$630,000 for the nine-months ended March 31, 2003 from $705,000 for the same
nine-month period last year. This improvement was primarily the result of a
decrease in the outstanding balance of the Company's revolving lines of credit,
combined with lower interest rates in effect during the period.

Equity in Earnings of 50% Owned Investees. Income from investees, representing
the Company's 50% ownership of PHI and Design Trends increased $1,471,000 to
$3,464,000 from $1,993,000 for the nine months ended March 31, 2003 and 2002,
respectively. The increase in income from investees was primarily due to an
increase in sales of Design Trends' portable lamp program, which generated
$4,330,000 in incremental revenue during the period. In addition, PHI generated
incremental sales of $971,000 during the period. The increase was due to an
expansion in the core program business of PHI's largest mass retail customer, as
well as an increase in promotional business with another mass retail customer.

Provision for Income Taxes. The provision for income taxes increased $655,000 to
$2,910,000 or 37.1% of net income before taxes but after minority interest
expense, for the nine months ended March 31, 2003, from $2,255,000 or 35.8% for
the same period of the prior year.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash increased $1,935,000 from $624,000 at June 30, 2002 to
$2,558,000 at March 31, 2003. The Company's operating activities provided cash
of $7,739,000 primarily attributable to the Company's net income from operations
and collections on customer accounts.

The $114,000 of cash used for investing activities related primarily to
additions to property and equipment associated with the implementation of the
Company's logistics and accounting systems upgrade.


                                       18
<PAGE>

Cash used for financing activities of $5,690,000 was primarily the result of (i)
the repurchase of 558,000 shares of the Company's common stock at an aggregate
cost of $7,746,000, (ii) principal payments of $1,119,000 on the Company's
facility note payable, and(iii) cash dividends of $1,158,000. These amounts were
partially offset by proceeds of $4,170,000 on the Company's line of credit and
$162,000 received from stock options exercised.

At March 31, 2003, subject to continued compliance with certain covenants and
restrictions, the Company had $20,000,000 available on its line of credit, of
which $13,204,000 had been utilized. The Company's management believes that its
current line of credit, combined with cash flows from operations, is adequate to
fund the Company's current operating needs, make annual payments of
approximately $1,200,000 under the Company's facility note payable, fund any
future dividend payments, as well as fund its projected growth over the next
twelve months.

At March 31, 2003, $5,323,000 remained outstanding under the note payable for
the Company's 378,000 square foot operating facility. The Company's management
believes that this facility will be sufficient for its purposes for the
foreseeable future. The facility note payable matures on January 1, 2008.

During the year ended June 30, 2002, the Company's Board of Directors authorized
the Company's management to repurchase up to 600,000 shares of the Company's
outstanding common stock. At June 30, 2002, the Company had repurchased 17,000
shares at an aggregate cost of $235,000. During the nine month period ended
March 31, 2003, the Company repurchased 558,000 shares at an aggregate cost of
$7,746,000. As of April 30, 2003 25,000 shares remained available for repurchase
under this program.

With respect to the Company's 50%-owned investees, PHI had $3,000,000 available
on its line of credit, of which $241,000 had been utilized at March 31, 2003.
Craftmade is a guarantor of this line of credit. Craftmade provides Design
Trends with loans to finance its working capital needs, drawing on the $20
million Line of Credit described above, as needed. To satisfy anticipated demand
for the portable lamp program, Design Trends maintained an inventory level of
$2,783,000 at March 31, 2003. This program is highly concentrated with one mass
merchandiser customer. Should the terms of the program with this particular mass
merchandiser be at a level less than originally anticipated the Company would be
required to find other customers for this inventory. There can be no assurances
that the Company would be able to obtain additional customers for this inventory
or that these alternative sources would generate similar sales levels and profit
margins as anticipated with the current mass merchandiser customer.


                                       19
<PAGE>

NEW ACCOUNTING PRONOUNCEMENTS

The FASB issued Interpretation No. 46 (FIN 46), "Consolidation of Variable
Interest Entities," ("FIN 46"), which is effective immediately to variable
interest entities created after January 31, 2003, and applies in the first
interim period beginning after June 15, 2003 to variable interest entities
created before February 1, 2003. FIN 46 addresses the consolidation of variable
interest entities through identification of a primary beneficiary. We do not
expect the adoption of this standard to have a material impact on our financial
statements in 2003.

In November of 2002, the Emerging Issues Task Force ("EITF") reached a consensus
on Issue No. 02-16, "Accounting by a Customer (Including a Reseller) for Certain
Consideration Received from a Vendor" ("EITF 02-16"), effective for fiscal years
beginning after December 15, 2002. EITF 02-16 addresses the accounting for cash
consideration given to a reseller of a vendor's products from a vendor. EITF
02-16 indicates that, generally, cash consideration received by a customer from
a vendor is presumed to be a reduction in the price of the vendor's products or
services and should, therefore, be characterized as a reduction of cost of sales
when recognized in the customer's income statement. EITF 02-16 also indicates
that cash consideration would be characterized as revenue if the vendor
receives, or will receive, an identifiable benefit (goods or services) in
exchange for the consideration, provided that the identified benefit is
sufficiently separable from the customer's purchase of the vendor's products and
the customer can reasonably estimate the fair value of the benefit provided. We
do not expect the adoption of this standard to have a material impact on our
financial statements in 2003.

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.

At March 31, 2003, the Company had a $20,000,000 line of credit (the "Craftmade
Line of Credit") with Frost at an interest rate of prime less .5%, of which
$13,205,000 was outstanding. At March 31, 2003, the prime rate was equal to
4.25%. The Craftmade Line of Credit is due on demand; however, if no demand is
made, it is scheduled to mature October 31, 2003.

At March 31, 2003, PHI had a $3,000,000 line of credit with Wachovia Bank, N.A.
at an interest rate equal to the one-month LIBOR plus 2%, of which $241,000 was
outstanding. At March 31, 2003, the one-month LIBOR rate was equal to 1.30%. The
PHI Line of


                                       20
<PAGE>

Credit is due on demand; however, if no demand is made, it is scheduled to
mature October 1, 2003. In addition, PHI had a $500,000 three-year note payable
with Wachovia maturing on July 29, 2005, of which $431,000 was outstanding at
March 31, 2003. The note bears interest at a rate equal to the Monthly LIBOR
Index plus 2.5%. These two lines of credit of PHI are referred to as the "PHI
Lines of Credit."

Because of the variable rate and short-term nature of the Craftmade Line of
Credit and the PHI Lines of Credit, the Company is subject to market risk
associated with adverse changes in interest rates. A sharp rise in interest
rates could materially adversely affect the financial condition and results of
operations of the Company. The Company has not entered into any instruments to
minimize this market risk of adverse changes in interest rates because the
Company believes the cost associated with such instruments would outweigh the
benefits that would be obtained from utilizing such instruments.

Under the Craftmade Line of Credit, for each one-percentage point (1%)
incremental increase in the prime rate, the Company's annualized interest
expense would increase by approximately $132,000. Consequently, an increase in
the prime rate of five percentage points (5%) would result in an estimated
annualized increase of interest expense for the Company of approximately
$660,000.

Under the PHI Lines of Credit, for each one-percentage point (1%) incremental
increase in LIBOR, the Company's annualized interest expense would increase by
approximately $7,000. Consequently, an increase in LIBOR of five percentage
points (5%) would result in an estimated annualized increase in interest expense
for the Company of approximately $35,000.

The Company currently purchases a substantial amount of ceiling fans and other
products of its Craftmade division from Fanthing, a Taiwanese company. The
Company's verbal understanding with Fanthing provides that all transactions are
to be denominated in U.S. dollars; however, the understanding further provides
that, in the event that the value of the U.S. dollar appreciates or depreciates
against the Taiwanese dollar by one Taiwanese dollar or more, Fanthing's prices
will be accordingly adjusted by 2.5%. As of March 31, 2003, one U.S. dollar
equaled $34.84 Taiwanese dollars. A sharp appreciation of the Taiwanese dollar
relative to the U.S. dollar could materially adversely affect the financial
condition and results of operations of the Company. The Company has not entered
into any instruments to minimize this market risk of adverse changes in currency
rates because the Company believes the cost associated with such instruments
would outweigh the benefits that would be obtained from utilizing such
instruments.


                                       21
<PAGE>

All other purchases of the Company and its 50% owned investees from foreign
vendors are denominated in U.S. dollars and are not subject to adjustment
provisions with respect to foreign currency fluctuations. As a result, the
Company does not believe that it is subject to any material foreign currency
exchange risk with respect to such purchases.

During the fiscal quarter ended March 31, 2003, the Company purchased
approximately $3,759,000 of products from Fanthing. Under the Company's
understanding with Fanthing, each $1 incremental appreciation of the Taiwanese
dollar would result in an estimated annualized net increase in cost of goods
sold of approximately $376,000, based on the Company's purchases during the
fiscal quarter ended March 31, 2003 (on an annualized basis). A $5 incremental
appreciation of the Taiwanese dollar would result in an estimated annualized
increase in cost of goods sold of approximately $1,880,000, based on the
Company's purchases during the fiscal quarter ended March 31, 2003 (on an
annualized basis). A $10 incremental appreciation of the Taiwanese dollar would
result in an increase of approximately $3,760,000 on an annualized basis, based
on the Company's purchases during the fiscal quarter ended March 31, 2003 (on an
annualized basis). These amounts are estimates of the financial impact of an
appreciation of the Taiwanese dollar relative to the U.S. dollar and are based
on annualizations of the Company's purchases from Fanthing for the fiscal
quarter ended March 31, 2003. Consequently, these amounts are not necessarily
indicative of the effect of such changes with respect to an entire year.

ITEM 4   CONTROLS AND PROCEDURES.

The Company maintains controls and procedures designed to ensure that
information required to be disclosed in the reports that the Company files or
submits under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the Securities and Exchange Commission. Based upon their evaluation of those
controls and procedures performed within 90 days of the filing date of this
report, the chief executive officer and the chief financial officer of the
Company concluded that the Company's disclosure controls and procedures are
effective in ensuring that all material information required to be filed in this
quarterly report has been made known to them in a timely manner.

The Company made no significant changes in its internal controls or in other
factors that could significantly affect these controls subsequent to the date of
the evaluation of those controls by the chief executive officer and chief
financial officer, including any corrective actions with regard to significant
deficiencies and material weaknesses.


                                       22
<PAGE>

                                     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 Stockholders

        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
                herein.

        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 herein.

        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-8 (File No. 33-33594-FW) and incorporated by reference herein.

        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 herein.


                                       23
<PAGE>

        4.2     Rights Agreement, dated as of June 23, 1999, between Craftmade
                International, Inc. and Harris Trust and Savings Bank, as Rights
                Agent, previously filed as an exhibit to Form 8-K dated July 9,
                1999 (File No. 000-26667) and incorporated by reference herein.

        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
                (File No. 001-10471), 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
                (File No. 001-10471), 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 (File No. 001-10471), 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 (File No. 001-10471), 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


                                       24
<PAGE>

                31, 1995 (File No. 001-10471), 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 (File No. 001-10471), 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.,


                                       25
<PAGE>

                Trade Source International, Inc., a Delaware corporation and
                Neall 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   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, Chase Bank of
                Texas, National Association and Frost National Bank, filed as
                Exhibit 10.17 to the Company's Quarterly Report on Form 10-Q
                filed May 15, 2000 (File No. 000-26667) and herein incorporated
                by reference.

        10.15   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, filed as Exhibit 10.18 to the Company's Quarterly
                Report on Form 10Q filed May 15, 2000 (File No. 000-26667) and
                herein incorporated by reference.

        10.16   Sixth Amendment to Credit Agreement, dated November 12, 1999, by
                and among Craftmade International, Inc., a Delaware corporation.


                                       26
<PAGE>

                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 Frost National Bank, filed as Exhibit 10.19 to
                the Company's Quarterly Report on Form 10Q filed May 15, 2000
                (File No. 000-26667) and herein incorporated by reference.

        10.17   Employment Agreement dated October 25, 1999, between Kathy Oher
                and Craftmade International, Inc., filed as Exhibit 10.20 to the
                Company's Annual Report on Form 10-K filed September 26, 2000
                (File No. 000-26667) and herein incorporated by reference.

        10.18   Seventh Amendment to Credit Agreement dated May 12, 2000, 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 Frost National Bank, filed as Exhibit 10.21 to
                the Company's Annual Report on Form 10-K filed September 26,
                2000 (File No. 000-26667) and herein incorporated by reference.

        10.19   Craftmade International, Inc. 1999 Stock Option Plan, filed as
                Exhibit A to the Company's Proxy Statement on Schedule 14A filed
                October 4, 2000 (File No. 000-26667) and herein incorporated by
                reference.

        10.20   Craftmade International, Inc. 2000 Non-Employee Director Stock
                Plan, filed as Exhibit B to the Company's Proxy Statement on
                Schedule 14A filed October 4, 2000 (File No. 000-26667) and
                herein incorporated by reference.

        10.21   Eighth Amendment to Credit Agreement dated February 12, 2001, by
                and among Craftmade International, Inc. a Delaware corporation,
                Durocraft International, Inc., a Texas corporation, Trade Source
                International, Inc., a Delaware corporation, Design Trends, LLC,
                a Delaware limited liability company, C/D/R Incorporated, a
                Delaware corporation,


                                       27
<PAGE>

                The Chase Manhattan Bank and The Frost National Bank, filed as
                Exhibit 10.24 to the Company's Annual Report on Form 10-K filed
                May 14, 2001(File No. 000-26667) and herein incorporated by
                reference.

        10.22   Ninth Amendment to Credit Agreement dated June 29, 2001, by and
                among Craftmade International, Inc. a Delaware corporation,
                Durocraft International, Inc., a Texas corporation, Trade Source
                International, Inc., a Delaware corporation, Design Trends, LLC,
                a Delaware limited liability company, C/D/R Incorporated, a
                Delaware corporation, The Chase Manhattan Bank and The Frost
                National Bank, filed as Exhibit 10.25 to the Company's Annual
                Report on Form 10-K filed September 26, 2001 (File No.
                000-26667) and herein incorporated by reference.

        10.23   Loan Agreement dated November 6, 2001, by and between Craftmade
                International, Inc., a Delaware corporation, and The Frost
                National Bank, a national banking association, filed as Exhibit
                10.26 to the Company's quarterly Report on Form 10-Q filed
                February 14, 2002 (File No. 000-26667) and herein incorporated
                by reference.

        10.24   Termination Agreement dated November 16, 2001, by and between
                Craftmade International, Inc., a Delaware corporation, and JP
                Morgan Chase Bank, filed as Exhibit 10.27 to the Company's
                Quarterly Report on Form 10-Q filed February 14, 2002 (File No.
                000-26667) and herein incorporated by reference.

        10.25   Loan Agreement dated April 17, 2002, by and between Prime/Home
                Impressions, LLC, a North Carolina limited liability company,
                and Wachovia Bank, N.A., with Note and Security Agreement of
                Prime/Home Impressions, LLC, Guaranty Agreement of Craftmade
                International, Inc., Guaranty Agreement of Trade Source
                International, Inc., and Guaranty Agreement of Home Impressions,
                Inc., filed as Exhibit 10.25 to the Company's Quarterly Report
                on Form 10-Q filed November 14, 2002 (File No. 000-26667) and
                herein incorporated by reference.


                                       28
<PAGE>

        10.26   Note and Security Agreement dated April 29, 2002, by Prime/Home
                Impressions LLC, a North Carolina limited liability company, to
                Wachovia Bank, N.A., with Security Agreement of Prime/Home
                Impressions, LLC, Guaranty Agreement of Craftmade International,
                Inc., and Guaranty Agreement of Trade Source International,
                Inc., filed as Exhibit 10.26 to the Company's Quarterly Report
                on Form 10-Q filed November 14, 2002 (File No. 000-26667) and
                herein incorporated by reference.

        99.1    Certification of Period Report by the Chief Executive Officer
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
                accompanying the Company's Quarterly Report on Form 10-Q for the
                quarter ended March 31, 2003.

        99.2    Certification of Period Report by the Chief Financial Officer
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
                accompanying the Company's Quarterly Report on Form 10-Q for the
                quarter ended March 31, 2003.

    b). Reports on Form 8-K

        None filed
                                       29
<PAGE>

                                    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 15, 2003                      /s/ James R. Ridings
     ----------------------            ------------------------------------
                                                JAMES R. RIDINGS
                                               President and Chief
                                                Executive Officer


Date May 15, 2003                      /s/ Kathleen B. Oher
     ----------------------            ------------------------------------
                                                 KATHLEEN B. OHER
                                              Chief Financial Officer


                                       30
<PAGE>

                                 CERTIFICATIONS
                             PURSUANT TO SECTION 302
                        OF THE SARBANES-OXLEY ACT OF 2002


I, James R. Ridings, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of Craftmade
         International, Inc.;

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report;

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

         c)       presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):


                                       31
<PAGE>

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         quarterly report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


Date: May 15, 2003                                  /s/ James R. Ridings
                                                    -------------------------
                                                        James R. Ridings
                                                        President and
                                                        Chief Executive Officer


                                       32
<PAGE>

I, Kathleen B. Oher, certify that:

1.       I have reviewed this quarterly report on Form 10-Q of Craftmade
         International, Inc.;

2.       Based on my knowledge, this quarterly report does not contain any
         untrue statement of a material fact or omit to state a material fact
         necessary to make the statements made, in light of the circumstances
         under which such statements were made, not misleading with respect to
         the period covered by this quarterly report; and

3.       Based on my knowledge, the financial statements, and other financial
         information included in this quarterly report, fairly present in all
         material respects the financial condition, results of operations and
         cash flows of the registrant as of, and for, the periods presented in
         this quarterly report.

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and
         we have:

         a)       designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this quarterly report is being prepared;

         b)       evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this quarterly report (the "Evaluation
                  Date"); and

         c)       presented in this quarterly report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of registrant's board of directors (or persons
         performing the equivalent function):

         a)       all significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize and


                                       33
<PAGE>
                  report financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         b)       any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         quarterly report whether or not there were significant changes in
         internal controls or in other factors that could significantly affect
         internal controls subsequent to the date of our most recent evaluation,
         including any corrective actions with regard to significant
         deficiencies and material weaknesses.


Date: May 15, 2003                                   /s/ Kathleen B. Oher
                                                     ---------------------------
                                                         Kathleen B. Oher
                                                         Chief Financial Officer


                                       34
<PAGE>

                                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 herein.

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 herein.

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 herein.

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 herein.

4.2      Rights Agreement, dated as of June 23, 1999, between Craftmade
         International, Inc. and Harris Trust and Savings Bank, as Rights Agent,
         previously filed as an exhibit to Form 8-K dated July 9, 1999 (File No.
         000-26667) and incorporated by reference herein.

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 (File No. 001-10471), 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 (File No. 001-10471),
         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
</Table>


                                       35
<PAGE>

<Table>
<S>      <C>
         Form 10-Q for the quarter ended December 31, 1995 (File No. 001-10471),
         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 (File No. 001-10471), 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 (File No.
         001-10471), 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 (File No.
         001-10471), 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
</Table>


                                       36
<PAGE>

<Table>
<S>      <C>
         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 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    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, a
         Delaware corporation, Chase Bank of Texas, National Association and
         Frost National Bank, filed as Exhibit 10.17 to the Company's Quarterly
         Report on Form 10-Q filed May 15, 2000 (File No. 000-26667) and herein
         incorporated by reference.

10.15    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, filed as Exhibit
         10.18 to the Company's Quarterly Report on Form 10-Q filed May 15, 2000
         (File No. 000-26667) and herein incorporated by reference.

10.16    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 Frost
         National Bank, filed as Exhibit 10.19 to the
</Table>


                                       37
<PAGE>

<Table>
<S>      <C>
         Company's Quarterly Report on Form 10-Q filed May 15, 2000 (File No.
         000-26667) and herein incorporated by reference.

10.17    Employment Agreement dated October 25, 1999, between Kathy Oher and
         Craftmade International, Inc., filed as Exhibit 10.20 to the Company's
         Annual Report on Form 10-K filed September 26, 2000 (File No.
         000-26667) and herein incorporated by reference.

10.18    Seventh Amendment to Credit Agreement dated May 12, 2000, 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 Frost
         National Bank, filed as Exhibit 10.21 to the Company's Annual Report on
         Form 10-K filed September 26, 2000 (File No. 000-26667) and herein
         incorporated by reference.

10.19    Craftmade International Inc. 1999 Stock Option Plan, filed as Exhibit A
         to the Company's Proxy Statement on Schedule 14A filed October 4, 2000
         (File No. 000-26667) and herein incorporated by reference.

10.20    Craftmade International Inc. 2000 Non-Employee Director Stock Plan,
         filed as Exhibit B to the Company's Proxy Statement on Schedule 14A
         filed October 4, 2000 (File No. 000-26667) and herein incorporated by
         reference.

10.21    Eighth Amendment to Credit Agreement dated February 12, 2001, by and
         among Craftmade International, Inc., a Delaware corporation, Durocraft
         International, Inc., a Texas corporation, Trade Source International,
         Inc., a Delaware corporation, Design Trends, LLC, a Delaware limited
         liability company, C/D/R Incorporated, a Delaware corporation, The
         Chase Manhattan Bank and The Frost National Bank, filed as Exhibit
         10.24 to the Company's Quarterly Report on Form 10-Q filed May 14, 2001
         (File No. 000-26667) and herein incorporated by reference.

10.22    Ninth Amendment to Credit Agreement dated June 29, 2001, by and among
         Craftmade International, Inc. a Delaware corporation, Durocraft
         International, Inc., a Texas corporation, Trade Source International,
         Inc., a Delaware corporation, Design Trends, LLC, a Delaware limited
         liability company, C/D/R Incorporated, a Delaware corporation, The
         Chase Manhattan Bank and The Frost National Bank, filed as Exhibit
         10.25 to the Company's Annual Report on Form 10-K filed September 26,
         2001 (File No. 000-26667) and herein incorporated by reference.
</Table>


                                       38
<PAGE>

<Table>
<S>      <C>
10.23    Loan Agreement dated November 6, 2001, by and between Craftmade
         International, Inc., a Delaware corporation, and The Frost National
         Bank, a national banking association, filed as Exhibit 10.26 to the
         Company's Quarterly Report on Form 10-Q filed February 14, 2002 (File
         No. 000-26667) and herein incorporated by reference.

10.24    Termination agreement dated November 16, 2001, by and between Craftmade
         International, Inc., a Delaware corporation, and JPMorgan Chase Bank,
         filed as Exhibit 10.27 to the Company's Quarterly Report on Form 10-Q
         filed February 14, 2002 (File No. 000-26667) and herein incorporated by
         reference.

10.25    Loan Agreement dated April 17, 2002, by and between Prime/Home
         Impressions, LLC, a North Carolina limited liability company, and
         Wachovia Bank, N.A., with Note and Security Agreement of Prime/Home
         Impressions, LLC, Guaranty Agreement of Craftmade International, Inc.,
         Guaranty Agreement of Trade Source International, Inc., and Guaranty
         Agreement of Home Impressions, Inc., filed as Exhibit 10.25 to the
         Company's Quarterly Report on Form 10-Q filed November 14, 2002 (File
         No. 000-26667) and herein incorporated by reference.

10.26    Note and Security Agreement dated April 29, 2002, by Prime/Home
         Impressions LLC, a North Carolina limited liability company, to
         Wachovia Bank, N.A., with Security Agreement of Prime/Home Impressions,
         LLC, Guaranty Agreement of Craftmade International, Inc., and Guaranty
         Agreement of Trade Source International, Inc., filed as Exhibit 10.26
         to the Company's Quarterly Report on Form 10-Q filed November 14, 2002
         (File No. 000-26667) and herein incorporated by reference.

99.1     Certification of Period Report by the Chief Executive Officer pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002, accompanying the
         Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
         2003.

99.2     Certification of Period Report by the Chief Financial Officer pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002, accompanying the
         Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
         2003.
</Table>


                                       39