##### Table of Contents



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
DECEMBER 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
of incorporation or organization) |  | (I.R.S. Employer
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   [X]  No  [   ].

5,291,384 shares of Common Stock were outstanding as of February 10, 2004.





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TABLE OF CONTENTS



|                                     |                                                                                              |                                                      |  |  |  |  |  | 
|------------------------------------ | -------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART I FINANCIAL INFORMATION        
|                                     | ITEM 1. Financial Statements                                                                
|                                     |                                                                                              | CONDENSED CONSOLIDATED STATEMENTS OF INCOME         
|                                     |                                                                                              | CONDENSED CONSOLIDATED BALANCE SHEETS               
|                                     |                                                                                              | CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS     
|                                     |                                                                                              | 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 Security Holders                                 
|                                     | Item 5. Other Information                                                                   
|                                     | Item 6. Exhibits and Reports on Form 8-K                                                    
|SIGNATURES                          
|Index to Exhibits                   
|Note and Security Agreement         
|Agreement Regarding Lamps Plus, Inc.
|Certification of CEO - Section 302  
|Certification of CFO - Section 302  
|Certification of CEO - Section 906  
|Certification of CFO - Section 906  



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##### Table of Contents



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 six months ended December 31, 2003 and 2002.
|         |  |                       |  | Condensed Consolidated Balance Sheets as of December
31, 2002 and June 30, 2003.                          
|         |  |                       |  | Condensed Consolidated Statements of Cash Flows for the
six months ended December 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 Security Holders.                                                      
|         |  | Item 5.               |  | Other Information.                                                                                        
|         |  | Item 6.               |  | Exhibits and Reports on Form 8-K.                                                                         

2



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

|                                                                         |                |   |                            |       |                          |   |                                      |       |                  |   |        |       |  |   |        |       | 
|------------------------------------------------------------------------ | -------------- | - | -------------------------- | ----- | ------------------------ | - | ------------------------------------ | ----- | ---------------- | - | ------ | ----- |  | - | ------ | ----- | 
|                                                                         |                |   | FOR THE THREE MONTHS ENDED |       | FOR THE SIX MONTHS ENDED
|                                                                         |                |   |                            |       |                         
|                                                                         |                |   | December 31,2003           |       | December 31,2002         |   | December 31,2003                     |       | December 31,2002
|                                                                         |                |   |                            |       |                          |   |                                      |       |                 
|                                                                         |                |   |                            |       |                          |   | (In thousands except per share data) |       |                  |   |       
|Net Sales                                                                |                | $ | 16,979                     |       |                          | $ | 15,961                               |       |                  | $ | 35,550 |       |  | $ | 34,983 |      
|Cost of goods sold                                                       |                |   | 11,256                     |       |                          |   | 10,754                               |       |                  |   | 23,533 |       |  |   | 23,695 |      
|                                                                         |                |   |                            |       |                          |   |                                      |       |                  |   |        |       |  |   |        |      
|Gross profit                                                             |                |   | 5,723                      |       |                          |   | 5,207                                |       |                  |   | 12,017 |       |  |   | 11,288 |      
|                                                                         |                |   |                            |       |                          |   |                                      |       |                  |   |        |       |  |   |        |      
|Selling, general and
administrative expenses                             |                |   | 3,568                      |       |                          |   | 3,542                                |       |                  |   | 7,452  |       |  |   | 7,366  |      
|Interest expense, net                                                    |                |   | 145                        |       |                          |   | 217                                  |       |                  |   | 328    |       |  |   | 412    |      
|Depreciation and amortization                                            |                |   | 148                        |       |                          |   | 160                                  |       |                  |   | 301    |       |  |   | 311    |      
|                                                                         |                |   |                            |       |                          |   |                                      |       |                  |   |        |       |  |   |        |      
|                                                                         | Total expenses |   |                            | 3,861 |                          |   |                                      | 3,919 |                  |   |        | 8,081 |  |   |        | 8,089 | 
|                                                                         |                |   |                            |       |                          |   |                                      |       |                  |   |        |       |  |   |        |      
|Income before equity in earnings of 50%
owned investees and income taxes |                |   | 1,862                      |       |                          |   | 1,288                                |       |                  |   | 3,936  |       |  |   | 3,199  |      
|Equity in earnings of 50% owned investees
before income taxes            |                |   | 274                        |       |                          |   | 868                                  |       |                  |   | 1,921  |       |  |   | 2,421  |      
|                                                                         |                |   |                            |       |                          |   |                                      |       |                  |   |        |       |  |   |        |      
|Income before income taxes                                               |                |   | 2,136                      |       |                          |   | 2,156                                |       |                  |   | 5,857  |       |  |   | 5,620  |      
|Provision for income taxes                                               |                |   | 772                        |       |                          |   | 786                                  |       |                  |   | 2,125  |       |  |   | 2,046  |      
|                                                                         |                |   |                            |       |                          |   |                                      |       |                  |   |        |       |  |   |        |      
|Net income                                                               |                | $ | 1,364                      |       |                          | $ | 1,370                                |       |                  | $ | 3,732  |       |  | $ | 3,574  |      
|                                                                         |                |   |                            |       |                          |   |                                      |       |                  |   |        |       |  |   |        |      
|Basic earnings per common share                                          |                | $ | 0.25                       |       |                          | $ | 0.25                                 |       |                  | $ | 0.69   |       |  | $ | 0.63   |      
|                                                                         |                |   |                            |       |                          |   |                                      |       |                  |   |        |       |  |   |        |      
|Diluted earnings per common share                                        |                | $ | 0.25                       |       |                          | $ | 0.25                                 |       |                  | $ | 0.68   |       |  | $ | 0.63   |      
|                                                                         |                |   |                            |       |                          |   |                                      |       |                  |   |        |       |  |   |        |      
|Cash dividends declared
per common share                                 |                | $ | 0.10                       |       |                          | $ | 0.07                                 |       |                  | $ | 0.20   |       |  | $ | 0.14   |      
|                                                                         |                |   |                            |       |                          |   |                                      |       |                  |   |        |       |  |   |        |      

SEE ACCOMPANYING NOTES TO
CONDENSEDCONSOLIDATED FINANCIAL STATEMENTS

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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS

|                                                                            |                                                                                            |                                   |        |                |        |          |        |        |        | 
|--------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | --------------------------------- | ------ | -------------- | ------ | -------- | ------ | ------ | ------ | 
|                                                                            |                                                                                            |                                   |        | December 31,   |        | June 30,
|                                                                            |                                                                                            |                                   |        | 2003           |        | 2003    
|                                                                            |                                                                                            |                                   |        |                |        |         
|                                                                            |                                                                                            |                                   |        | (Unaudited)    |        |          |        |       
|                                                                            |                                                                                            |                                   |        | (In thousands)
|Current assets:                                                             |                                                                                            |                                   |        |                |        |          |        |       
|                                                                            | Cash                                                                                       |                                   | $      | 1,113          |        |          | $      | 3,469  |       
|                                                                            | Accounts receivable - net of
allowance for doubtful accounts of
$150 and $150 respectively |                                   |        | 9,700          |        |          |        | 11,706 |       
|                                                                            | Receivables from 50% owned investees                                                       |                                   |        | 2,206          |        |          |        | 217    |       
|                                                                            | Inventory                                                                                  |                                   |        | 9,687          |        |          |        | 9,394  |       
|                                                                            | Deferred income taxes                                                                      |                                   |        | 358            |        |          |        | 358    |       
|                                                                            | Prepaid expenses and other
current assets                                                  |                                   |        | 402            |        |          |        | 540    |       
|                                                                            |                                                                                            |                                   |        |                |        |          |        |        |       
|                                                                            |                                                                                            | Total current assets              |        |                | 23,466 |          |        |        | 25,684 | 
|                                                                            |                                                                                            |                                   |        |                |        |          |        |        |       
|Property and equipment, net                                                 |                                                                                            |                                   |        |                |        |          |        |       
|                                                                            | Land                                                                                       |                                   |        | 1,535          |        |          |        | 1,535  |       
|                                                                            | Building                                                                                   |                                   |        | 7,784          |        |          |        | 7,784  |       
|                                                                            | Office furniture and equipment                                                             |                                   |        | 3,951          |        |          |        | 3,873  |       
|                                                                            | Leasehold improvements                                                                     |                                   |        | 259            |        |          |        | 259    |       
|                                                                            |                                                                                            |                                   |        |                |        |          |        |        |       
|                                                                            |                                                                                            |                                   | 13,529 |                |        |          | 13,451 |       
|Less: accumulated depreciation                                              |                                                                                            |                                   | (4,410 | )              |        |          | (4,109 | )     
|                                                                            |                                                                                            |                                   |        |                |        |          |        |        |       
|                                                                            |                                                                                            | Total property and equipment, net |        |                | 9,119  |          |        |        | 9,342  | 
|                                                                            |                                                                                            |                                   |        |                |        |          |        |        |       
|Goodwill, net of accumulated
amortization of $1,204 and $1,204 respectively |                                                                                            |                                   | 4,735  |                |        |          | 4,735  |       
|Investment in 50% owned investees                                           |                                                                                            |                                   | 2,585  |                |        |          | 3,567  |       
|Other assets                                                                |                                                                                            |                                   | 12     |                |        |          | 12     |       
|                                                                            |                                                                                            |                                   |        |                |        |          |        |        |       
|                                                                            |                                                                                            | Total other assets                |        |                | 7,332  |          |        |        | 8,314  | 
|                                                                            |                                                                                            |                                   |        |                |        |          |        |        |       
|Total assets                                                                |                                                                                            | $                                 | 39,917 |                |        | $        | 43,340 |       
|                                                                            |                                                                                            |                                   |        |                |        |          |        |        |       

SEE ACCOMPANYING NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

4



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##### Table of Contents



CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

LIABILITIES AND STOCKHOLDERS EQUITY

|                                           |                                                                                                                               |                           |                            |         |                |        |          |         |        |        | 
|------------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------- | ------------------------- | -------------------------- | ------- | -------------- | ------ | -------- | ------- | ------ | ------ | 
|                                           |                                                                                                                               |                           |                            |         | December 31,   |        | June 30,
|                                           |                                                                                                                               |                           |                            |         | 2003           |        | 2003    
|                                           |                                                                                                                               |                           |                            |         |                |        |         
|                                           |                                                                                                                               |                           |                            |         | (Unaudited)    |        |          |         |       
|                                           |                                                                                                                               |                           |                            |         | (In thousands)
|Current liabilities:                       |                                                                                                                               |                           |                            |         |                |        |          |        
|                                           | Note payable - current                                                                                                        |                           | $                          | 843     |                |        | $        | 809     |       
|                                           | Revolving lines of credit                                                                                                     |                           |                            | 7,403   |                |        |          | 12,000  |       
|                                           | Accounts payable                                                                                                              |                           |                            | 1,965   |                |        |          | 2,517   |       
|                                           | Commissions payable                                                                                                           |                           |                            | 220     |                |        |          | 247     |       
|                                           | Income taxes payable                                                                                                          |                           |                            | 442     |                |        |          | 484     |       
|                                           | Accrued customer allowances                                                                                                   |                           |                            | 1,101   |                |        |          | 1,012   |       
|                                           | Other accrued expenses                                                                                                        |                           |                            | 1,039   |                |        |          | 914     |       
|                                           |                                                                                                                               |                           |                            |         |                |        |          |         |       
|                                           |                                                                                                                               | Total current liabilities |                            |         | 13,013         |        |          |         | 17,983 |       
|Other non-current liabilities:             |                                                                                                                               |                           |                            |         |                |        |          |        
|                                           | Note payable - long term                                                                                                      |                           |                            | 3,892   |                |        |          | 4,322   |       
|                                           | Deferred income taxes                                                                                                         |                           |                            | 497     |                |        |          | 497     |       
|                                           |                                                                                                                               |                           |                            |         |                |        |          |         |       
|                                           | Total liabilities                                                                                                             |                           |                            | 17,402  |                |        |          | 22,802  |       
|                                           |                                                                                                                               |                           |                            |         |                |        |          |         |       
|Commitments and contingencies              |                                                                                                                               |                           |                            |         |                |        |          |        
|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, 9,464,035 and
9,425,535 shares issued, respectively               |                           |                            | 95      |                |        |          | 94      |       
|Additional paid-in capital                 |                                                                                                                               |                           | 13,840                     |         |                |        | 13,584   |        
|Unearned deferred compensation             |                                                                                                                               |                           | (27                        | )       |                |        | (43      | )      
|Retained earnings                          |                                                                                                                               |                           | 38,304                     |         |                |        | 35,684   |        
|                                           |                                                                                                                               |                           |                            |         |                |        |          |         |       
|                                           |                                                                                                                               |                           | 52,244                     |         |                |        | 49,351   |        
|                                           | Less: treasury stock, 4,041,474 and
4,004,474 common shares at cost,
and 32,000 preferred shares at cost                      |                           |                            | (29,729 | )              |        |          | (28,813 | )     
|                                           |                                                                                                                               |                           |                            |         |                |        |          |         |       
|                                           |                                                                                                                               |                           | Total stockholders equity |         |                | 22,515 |          |         |        | 20,538 | 
|                                           |                                                                                                                               |                           |                            |         |                |        |          |         |       
|Total liabilities and stockholders equity |                                                                                                                               | $                         | 39,917                     |         |                | $      | 43,340   |        
|                                           |                                                                                                                               |                           |                            |         |                |        |          |         |       

SEE ACCOMPANYING NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

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##### Table of Contents



CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
FOR THE SIX MONTHS ENDED DECEMBER 31, 2003

(In thousands)

|                                   |                                                       |  |                     |   |        |   |         |   |              |   |           |   |            |   |          |   |          |   |     |   |  |   |        |       | 
|---------------------------------- | ----------------------------------------------------- |  | ------------------- | - | ------ | - | ------- | - | ------------ | - | --------- | - | ---------- | - | -------- | - | -------- | - | --- | - |  | - | ------ | ----- | 
|                                   |                                                       |  |                     |   |        |   |         |   |              |   |           |   |            |   |          |   |          |   |     |   |  |   |        |       | 
|                                   |                                                       |  |                     |   |        |   |         |   |              |   | SERIES A  |   | ADDITIONAL |   | UNEARNED |   |          |   |    
|                                   |                                                       |  |                     |   |        |   |         |   |              |   | PREFERRED |   | PAID-IN    |   | DEFERRED |   | RETAINED
|                                   |                                                       |  | VOTING COMMON STOCK |   | STOCK  |   | CAPITAL |   | COMPENSATION |   | EARNINGS 
|                                   |                                                       |  |                     |   |        |   |         |   |              |   |          
|                                   |                                                       |  | Shares              |   | Amount |   |         |   |              |   |           |   |            |   |          |   |          |   |     |   | 
|                                   |                                                       |  |                     |   |        |   |         |   |              |   |           |   |            |   |          |   |          |   |     |   | 
|Balance as of June 30, 2003        |                                                       |  | 9,426               |   |        |   | 94      |   |              |   | 32        |   |            |   | 13,584   |   |          |   | (43 | ) |  |   | 35,684 |      
|Comprehensive income:              |                                                       |  |                     |   |        |   |         |   |              |   |           |   |            |   |          |   |          |   |     |   |  |   |        |      
|                                   | Net income for the six
months ended December 31, 2003 |  |                     |  |        |   |         |  |              |   |           |  |            |   |          |  |          |   |     |  |  |   |        | 3,732 | 
|                                   |                                                       |  |                     |   |        |   |         |   |              |   |           |   |            |   |          |   |          |   |     |   |  |   |        |      
|Total comprehensive income         |                                                       |  |                     |   |        |   |         |   |              |   |           |   |            |   |          |   |          |   |     |   |  |   | 3,732  |      
|Deferred compensation earned       |                                                       |  |                    |   |        |   |        |   |              |   |          |   |            |   |         |   |          |   | 16  |   |  |   |       |      
|Treasury stock purchases           |                                                       |  |                     |   |        |   |         |   |              |   |           |   |            |   |          |   |          |   |     |   |  |   |        |      
|Exercise of employee stock options |                                                       |  | 38                  |   |        |   | 1       |   |              |   |          |   |            |   | 256      |   |          |   |    |   |  |   |       |      
|Cash dividends                     |                                                       |  |                    |   |        |   |        |   |              |   |          |   |            |   |         |   |          |   |    |   |  |   | (1,112 | )    
|                                   |                                                       |  |                     |   |        |   |         |   |              |   |           |   |            |   |          |   |          |   |     |   |  |   |        |      
|Balance as of December 31, 2003    |                                                       |  | 9,464               |   |        | $ | 95      |   |              | $ | 32        |   |            | $ | 13,840   |   |          | $ | (27 | ) |  | $ | 38,304 |      
|                                   |                                                       |  |                     |   |        |   |         |   |              |   |           |   |            |   |          |   |          |   |     |   |  |   |        |      

[Additional columns
below]

[Continue from above table, first
column(s) repeated
]

|                                   |                                                       |  |   |               |   |                |  |        |   |        |   |         |   |  |   |        |       | 
|---------------------------------- | ----------------------------------------------------- |  | - | ------------- | - | -------------- |  | ------ | - | ------ | - | ------- | - |  | - | ------ | ----- | 
|                                   |                                                       |  |   | ACCUMULATED   |   |                |  |        |   |        |   |         |   |  |   |       
|                                   |                                                       |  |   | OTHER         |   |                |  |        |   |        |   |         |   |  |   |       
|                                   |                                                       |  |   | COMPREHENSIVE |   |                |  |        |   |        |   |         |   |  |   |       
|                                   |                                                       |  |   | INCOME        |   | TREASURY STOCK |  |        |   |       
|                                   |                                                       |  |   |               |   |                |  |        |   |       
|                                   |                                                       |  |   |               |   |                |  | Shares |   | Amount |   | Total  
|                                   |                                                       |  |   |               |   |                |  |        |   |        |   |        
|Balance as of June 30, 2003        |                                                       |  |   |              |   |                |  | 4,036  |   |        |   | (28,813 | ) |  |   | 20,538 |      
|Comprehensive income:              |                                                       |  |   |               |   |                |  |        |   |        |   |         |   |  |   |        |      
|                                   | Net income for the six
months ended December 31, 2003 |  |   |               |  |                |  |        |  |        |   |         |  |  |   |        | 3,732 | 
|                                   |                                                       |  |   |               |   |                |  |        |   |        |   |         |   |  |   |        |      
|Total comprehensive income         |                                                       |  |   |               |   |                |  |        |   |        |   |         |   |  |   | 3,732  |      
|Deferred compensation earned       |                                                       |  |   |              |   |                |  |       |   |        |   |        |   |  |   | 16     |      
|Treasury stock purchases           |                                                       |  |   |               |   |                |  | 37     |   |        |   | (916    | ) |  |   | (916   | )    
|Exercise of employee stock options |                                                       |  |   |              |   |                |  |       |   |        |   |        |   |  |   | 257    |      
|Cash dividends                     |                                                       |  |   |              |   |                |  |       |   |        |   |        |   |  |   | (1,112 | )    
|                                   |                                                       |  |   |               |   |                |  |        |   |        |   |         |   |  |   |        |      
|Balance as of December 31, 2003    |                                                       |  | $ |              |   |                |  | 4,073  |   |        | $ | (29,729 | ) |  | $ | 22,515 |      
|                                   |                                                       |  |   |               |   |                |  |        |   |        |   |         |   |  |   |        |      

SEE ACCOMPANYING NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

6



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##### Table of Contents






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

|                                           |                                                |   |                          |        |          |   |        |        |  
|------------------------------------------ | ---------------------------------------------- | - | ------------------------ | ------ | -------- | - | ------ | ------ | -
|                                           |                                                |   | FOR THE SIX MONTHS ENDED
|                                           |                                                |   |                         
|                                           |                                                |   | December                 |        | December
|                                           |                                                |   | 31, 2003                 |        | 31, 2002
|                                           |                                                |   |                          |        |         
|                                           |                                                |   | (In thousands)          
|Net cash provided by operating activities: |                                                |   | 4,487                    |        |          | $ | 7,508  |       
|                                           |                                                |   |                          |        |          |   |        |       
|Cash flows from investing activities:      |                                                |   |                          |        |          |   |        |       
|                                           | Net additions to equipment                     |   |                          | (79    | )        |   |        | (66    | )
|                                           |                                                |   |                          |        |          |   |        |       
|Net cash used in investing activities      |                                                |   | (79                      | )      |          |   | (66    | )     
|                                           |                                                |   |                          |        |          |   |        |       
|Cash flows from financing activities:      |                                                |   |                          |        |          |   |        |       
|                                           | Net proceeds from (payments to) line of credit |   |                          | (4,597 | )        |   |        | 2,016  |  
|                                           | Principal payments on note payable             |   |                          | (396   | )        |   |        | (341   | )
|                                           | Treasury stock repurchases                     |   |                          | (916   | )        |   |        | (6,553 | )
|                                           | Stock options exercised                        |   |                          | 256    |          |   |        | 74     |  
|                                           | Cash dividends                                 |   |                          | (1,113 | )        |   |        | (807   | )
|                                           |                                                |   |                          |        |          |   |        |       
|Net cash used in financing activities      |                                                |   | (6,766                   | )      |          |   | (5,611 | )     
|                                           |                                                |   |                          |        |          |   |        |       
|Net increase in cash                       |                                                |   | (2,357                   | )      |          |   | 1,831  |       
|Cash at beginning of period                |                                                |   | 3,469                    |        |          |   | 624    |       
|                                           |                                                |   |                          |        |          |   |        |       
|Cash at end of period                      |                                                | $ | 1,113                    |        |          | $ | 2,455  |       
|                                           |                                                |   |                          |        |          |   |        |       

SEE ACCOMPANYING NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

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

DECEMBER 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. The
Companys 50% owned equity method investees, Prime Home
Impressions, LLC (PHI)
and Design Trends, LLC (Design Trends), 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 for the fiscal year ended June 30, 2003. 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.

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|                                        |  |                            |       |              |  |   |       | 
|--------------------------------------- |  | -------------------------- | ----- | ------------ |  | - | ----- | 
|                                        |  | FOR THE THREE MONTHS ENDED
|                                        |  |                           
|                                        |  | December 31,               |       | December 31,
|                                        |  | 2003                       |       | 2002        
|                                        |  |                            |       |             
|Net income, as reported                 |  | $                          | 1,364 |              |  | $ | 1,370 | 
|Net income, proforma                    |  |                            | 1,333 |              |  |   | 1,339 | 
|Basic earnings per share, as report     |  |                            | 0.25  |              |  |   | 0.25  | 
|Basic earnings per share, pro forma     |  |                            | 0.25  |              |  |   | 0.24  | 
|Diluted
earnings per share, as reported |  |                            | 0.25  |              |  |   | 0.25  | 
|Diluted
earnings per share, pro forma   |  |                            | 0.24  |              |  |   | 0.24  | 

|                                        |  |                          |       |              |  |   |       | 
|--------------------------------------- |  | ------------------------ | ----- | ------------ |  | - | ----- | 
|                                        |  | FOR THE SIX MONTHS ENDED
|                                        |  |                         
|                                        |  | December 31,             |       | December 31,
|                                        |  | 2003                     |       | 2002        
|                                        |  |                          |       |             
|Net income, as reported                 |  | $                        | 3,732 |              |  | $ | 3,574 | 
|Net income, proforma                    |  |                          | 3,670 |              |  |   | 3,512 | 
|Basic earnings per share, as report     |  |                          | 0.69  |              |  |   | 0.63  | 
|Basic earnings per share, pro forma     |  |                          | 0.68  |              |  |   | 0.62  | 
|Diluted
earnings per share, as reported |  |                          | 0.68  |              |  |   | 0.63  | 
|Diluted
earnings per share, pro forma   |  |                          | 0.67  |              |  |   | 0.61  | 

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

December 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:

|                          |  |                                      |       |                          |  |          |       |          |  |   |       |  |  |   |       | 
|------------------------- |  | ------------------------------------ | ----- | ------------------------ |  | -------- | ----- | -------- |  | - | ----- |  |  | - | ----- | 
|                          |  | FOR THE THREE MONTHS ENDED           |       | FOR THE SIX MONTHS ENDED
|                          |  |                                      |       |                         
|                          |  | December                             |       | December                 |  | December |       | December
|                          |  | 31, 2003                             |       | 31, 2002                 |  | 31, 2003 |       | 31, 2002
|                          |  |                                      |       |                          |  |          |       |         
|                          |  | (In thousands except per share data)
|Basic and
Diluted EPS     |  |                                      |       |                          |  |          |       |          |  |   |       |  |  |   |       | 
|Numerator:                |  |                                      |       |                          |  |          |       |          |  |   |       |  |  |   |       | 
|Net Income                |  | $                                    | 1,364 |                          |  | $        | 1,370 |          |  | $ | 3,732 |  |  | $ | 3,574 | 
|                          |  |                                      |       |                          |  |          |       |          |  |   |       |  |  |   |       | 
|Denominator:              |  |                                      |       |                          |  |          |       |          |  |   |       |  |  |   |       | 
|Common
Shares
Outstanding |  |                                      | 5,437 |                          |  |          | 5,516 |          |  |   | 5,430 |  |  |   | 5,656 | 
|                          |  |                                      |       |                          |  |          |       |          |  |   |       |  |  |   |       | 
|Basic EPS                 |  | $                                    | 0.25  |                          |  | $        | 0.25  |          |  | $ | 0.69  |  |  | $ | 0.63  | 
|                          |  |                                      |       |                          |  |          |       |          |  |   |       |  |  |   |       | 
|Denominator:              |  |                                      |       |                          |  |          |       |          |  |   |       |  |  |   |       | 
|Common
Shares
Outstanding |  |                                      | 5,437 |                          |  |          | 5,516 |          |  |   | 5,430 |  |  |   | 5,656 | 
|Options                   |  |                                      | 40    |                          |  |          | 58    |          |  |   | 50    |  |  |   | 60    | 
|                          |  |                                      |       |                          |  |          |       |          |  |   |       |  |  |   |       | 
|Total Shares              |  |                                      | 5,477 |                          |  |          | 5,574 |          |  |   | 5,479 |  |  |   | 5,716 | 
|                          |  |                                      |       |                          |  |          |       |          |  |   |       |  |  |   |       | 
|Diluted EPS               |  | $                                    | 0.25  |                          |  | $        | 0.25  |          |  | $ | 0.68  |  |  | $ | 0.63  | 
|                          |  |                                      |       |                          |  |          |       |          |  |   |       |  |  |   |       | 

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

December 31, 2003
(Unaudited)
(In Thousands)

Note 3 -  INVESTMENT IN 50% OWNED INVESTEES

Combined summarized financial information for Design Trends and PHI for the three and six
months ended December 31, 2003 and 2002 is as follows:

|                           |  |                            |        |                          |  |          |       |          |  |   |        |  |  |   |        | 
|-------------------------- |  | -------------------------- | ------ | ------------------------ |  | -------- | ----- | -------- |  | - | ------ |  |  | - | ------ | 
|                           |  | FOR THE THREE MONTHS ENDED |        | FOR THE SIX MONTHS ENDED
|                           |  | December                   |        | December                 |  | December |       | December
|                           |  | 31, 2003                   |        | 31, 2002                 |  | 31, 2003 |       | 31, 2002
|                           |  |                            |        |                          |  |          |       |         
|Net Sales                  |  | $                          | 11,968 |                          |  | $        | 8,975 |          |  | $ | 24,588 |  |  | $ | 20,130 | 
|Gross profit               |  |                            | 1,920  |                          |  |          | 2,684 |          |  |   | 5,847  |  |  |   | 6,675  | 
|Income before income taxes |  |                            | 549    |                          |  |          | 1,735 |          |  |   | 3,841  |  |  |   | 4,832  | 

|                          |  |          |        |          |  |  |        |  |  |  |  |  |  |  |  | 
|------------------------- |  | -------- | ------ | -------- |  |  | ------ |  |  |  |  |  |  |  |  | 
|                          |  | December |        | December |  |  |        |  |  |  |  | 
|                          |  | 31, 2003 |        | 31, 2002 |  |  |        |  |  |  |  | 
|                          |  |          |        |          |  |  |        |  |  |  |  | 
|Accounts receivable - net |  |          | 7,573  |          |  |  | 3,918  |  |  |  |  |  |  |  |  | 
|Inventories               |  |          | 4,828  |          |  |  | 3,896  |  |  |  |  |  |  |  |  | 
|Total current assets      |  |          | 14,299 |          |  |  | 9,902  |  |  |  |  |  |  |  |  | 
|Total assets              |  |          | 15,113 |          |  |  | 12,277 |  |  |  |  |  |  |  |  | 
|Revolving line of credit  |  |          | 3,000  |          |  |  | 267    |  |  |  |  |  |  |  |  | 
|Note
payable - current    |  |          | 167    |          |  |  | 167    |  |  |  |  |  |  |  |  | 
|Total current liabilities |  |          | 15,113 |          |  |  | 6,693  |  |  |  |  |  |  |  |  | 
|Long term debt            |  |          | 111    |          |  |  | 277    |  |  |  |  |  |  |  |  | 
|Total liabilities         |  |          | 9,943  |          |  |  | 6,970  |  |  |  |  |  |  |  |  | 
|Total partners capital   |  |          | 5,170  |          |  |  | 5,307  |  |  |  |  |  |  |  |  | 

The Company received distributions of $2,903,000 and $835,000 for the six
months ended
December 31, 2003 and 2002 respectively, from these two 50% owned investees.

The Companys 50% owned investees operate in the form of limited liability
companies, and,
consequently, do not pay federal income taxes. Instead, the Companys
share of their income
is reported in the Companys federal tax return.

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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.

From time to time 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 and Design Trends reimburse the Company approximately $51,000 and $313,000
per month, respectively, for general warehouse and administrative expenses.
The calculation for such reimbursement is based on a percentage of sales
method. Prior to October 1, 2003, PHI reimbursed the Company a fixed amount of
$30,000 per month and Design Trends reimbursed the Company approximately
$105,000 per month for general warehouse and administrative expenses.

Craftmades charges to its 50% owned investees are summarized as follows for
the periods indicated (in thousands):

|                                                     |  |                     |         |              |  |   |         | 
|---------------------------------------------------- |  | ------------------- | ------- | ------------ |  | - | ------- | 
|                                                     |  | Three Months Ending
|                                                     |  | December 31,        |         | December 31,
|                                                     |  | 2003                |         | 2002        
|                                                     |  |                     |         |             
|Warehouse and administrative
expense  Design Trends |  | $                   | 941,000 |              |  | $ | 311,000 | 
|Warehouse and administrative
expense  PHI           |  | $                   | 152,000 |              |  | $ | 90,000  | 

|                                                     |  |                   |           |              |  |   |         | 
|---------------------------------------------------- |  | ----------------- | --------- | ------------ |  | - | ------- | 
|                                                     |  | Six Months Ending
|                                                     |  | December 31,      |           | December 31,
|                                                     |  | 2003              |           | 2002        
|                                                     |  |                   |           |             
|Warehouse and administrative
expense  Design Trends |  | $                 | 1,255,000 |              |  | $ | 614,000 | 
|Interest  Design Trends                             |  |                   |          |              |  | $ | 20,000  | 
|Warehouse and administrative
expense  PHI           |  | $                 | 242,000   |              |  | $ | 180,000 | 

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NOTE 5  SEGMENT INFORMATION

The Company operates in two reportable segments, Craftmade and TSI. 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, 2003. The Company evaluates the
performance of its segments and allocates resources to them based on their
operating profit and loss and cash flows.

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, outdoor lighting, and
lamps offered primarily through lighting showrooms, certain major retail chains
and catalog houses. The TSI segment derives its revenue from ceiling mount
lighting fixtures, bath-strip lighting and outdoor lighting marketed solely to
mass merchandisers.

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

Craftmade
    
    TSI
    
    TotalFor
the three months ended
December 31, 2003Net sales
    
    
    12,546
    
    
    
    4,433
    
    
    
    16,979Operating profit (loss)
    
    
    2,076
    
    
    
    (70
    )
    
    
    2,006For
the three months ended
December 31, 2002Net sales
    
    
    10,962
    
    
    
    4,999
    
    
    
    15,961Operating profit (loss)
    
    
    1,517
    
    
    
    (12
    )
    
    
    1,505For
the six months ended
December 31, 2003Net sales
    
    
    26,858
    
    
    
    8,692
    
    
    
    35,550Operating profit (loss)
    
    
    4,814
    
    
    
    (549
    )
    
    
    4,265For
the six months ended
December 31, 2002Net sales
    
    
    24,423
    
    
    
    10,560
    
    
    
    34,983Operating profit (loss)
    
    
    3,847
    
    
    
    (236
    )
    
    
    3,611


NOTE 6  CONTINGENT LIABILITIES

The Company is a party to a lawsuit alleging patent infringement related to a
utility patent held by Lamps Plus, Inc. In November 2003, a jury verdict held
that the Company willfully infringed on the utility patent. The jury awarded
damages of $143,385, and Lamps Plus has filed a motion to seek treble damages
plus reasonable attorneys fees and court costs. The outcome of this
litigation is uncertain. The Company has appealed the verdict, and all
post-verdict motions are still pending. A final judgment has not been entered.

Craftmade has an agreement with Dolan Northwest, LLC (the owner of the 50% of
Design Trends not owned by Craftmade) pursuant to which Dolan Northwest is
responsible for any judgment that may be rendered in the lawsuit, plus all
costs and expenses (including legal fees and court costs) associated with any
such judgment, in excess of the first $150,000 of legal fees, which has already
been incurred by Design Trends. Pat Dolan has agreed to unconditionally
guarantee the obligations of Dolan Northwest under this agreement.

In the event that both Dolan Northwest and Pat Dolan became insolvent or
otherwise unable to meet this obligation, the obligation could become a
liability of Design Trends or Craftmade. The Company believes this is unlikely
to occur, and therefore has not recorded a reserve for this contingent
liability.

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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, the dependency of Trade
Source International, Inc. (TSI), Design Trends and PHI 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, labor strikes,
the ability of the Company to import merchandise from foreign countries without
significantly restrictive tariffs, duties or quotas and the ability of the
Company to source, ship and deliver items from foreign countries to its U.S.
distribution centers at reasonable prices and rates and in a timely fashion, as
well as 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 December 31, 2003 Compared to Three Months Ended December
31, 2002

Net Sales. Net sales for the Company increased $1,018,000 or 6.4% to
$16,979,000 for the three month period ended December 31, 2003 compared to
$15,961,000 for the same three month period last year. Net sales from the
Craftmade division increased $1,584,000, or 14.4%, to $12,546,000 for the three
months ended December 31, 2003 from $10,962,000 for the same three month period
last year. The increase in sales of the Craftmade division was primarily due to
an increased focus on sales and marketing and an expanded product offering.

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Net sales of the TSI division decreased $566,000, or 11.3%, to $4,433,000 for
the three months ended December 31, 2003 from $4,999,000 for the same
three-month period last year. The decrease in sales of the TSI division was
due to sales of promotional or non-core program items that occurred in the
three month period ended December 31, 2002 that did not occur in the three
month period ended December 31, 2003. TSIs sales results can have a high
degree of variability due to the buying patterns of its mass retail customers,
which can be inconsistent from period to period.

Gross Profit. Gross profit of the Company as a percentage of sales increased
to 33.7% of net sales for the three months ended December 31, 2003, compared to
32.6% for the same period of 2002. The gross margin of the showroom division
was relatively unchanged at 38.3% of net sales compared to 38.6% of net sales
in the year ago period. The gross margin of the TSI division improved to 20.8%
of sales for the three months ended December 31, 2003 compared to 19.4% of
sales in the year ago period. The improvement in the TSI gross margin was
primarily due to an inventory write down of $46,000 in the three-month period
ended December 31, 2002 that did not occur in the three month period ended
December 31, 2003.

Selling, General and Administrative Expenses. Total selling, general and
administrative (SG&A) expenses of the Company increased $26,000 to $3,568,000
or 21.0% of net sales for the three months ended December 31, 2003 from
$3,542,000 or 22.2% of net sales for the same three month period last year.
Total SG&A expenses of the showroom division were relatively unchanged at
$2,590,000 or 20.6% of sales compared to $2,578,000 or 23.5% of sales for the
same period in the previous fiscal year. The decline in SG&A expenses of the
Craftmade division as a percentage of sales was primarily due to the effect of
increased sales leveraging down fixed administrative expenses.

Total SG&A expenses of the TSI division increased $12,000 to $978,000 or 22.0%
of sales compared to $964,000 or 19.3% of sales for the same period in the
previous year. The increase in SG&A expenses of the TSI division as a
percentage of sales was primarily related to the decline in sales and the
de-leveraging effect on fixed SG&A expenses.

Interest Expense. Net interest expense of the Company decreased $72,000 to
$145,000 for the three months ended December 31, 2003 from $217,000 for the
same three-month period last year. This decrease was primarily the result of a
decrease in the outstanding balances of the Companys note payable and
revolving line of credit.

Equity in Earnings of 50% Owned Investees. Income from investees, representing
the Companys 50% ownership of PHI and Design Trends decreased $594,000 to
$274,000 from $868,000 for the three months

15



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##### Table of Contents



ended December 31, 2003 and 2002,
respectively. The decrease in income from investees was due in part to a
charge of $2,100,000, or $1,050,000 net of the 50% minority interest, incurred
in connection
with the roll out of a new product to a customer at PHI. The $1,050,000 charge
was partially offset by an increase in Design Trends pretax net income in the
amount of $370,000. The increase in Design Trends income was driven by a sales
increase of 50% or $3,763,000 to $11,292,000 for the three months ended
December 31, 2003 compared to $7,529,000 for the same period in the previous
year.

Provision For Income Taxes. The provision for income taxes decreased $14,000 to
$772,000 or 36.1% of net income before income taxes for the three months ended
December 31, 2003, from $786,000 or 36.5% for the same period of the prior
year.

Results of Operations

Six Months Ended December 31, 2003 Compared to Six Months Ended December 31,
2002

Net Sales. Net sales for the Company increased $567,000, or 1.6%, to
$35,550,000 for the six-month period ended December 31, 2003 from $34,983,000
for the same six-month period last year. Net sales of the Craftmade division
increased $2,435,000, or 10.0%, to $26,858,000 for the six months ended
December 31, 2003 from $24,423,000 for the same six-month period last year.
The increase in sales of the Craftmade division was primarily due to new
product introductions and increased sales of outdoor lighting, as well as an
increased focus on sales and marketing.

Net sales of the TSI division declined $1,868,000, or 17.7%, to $8,692,000 for
the six months ended December 31, 2003 from $10,560,000 for the same six month
period last year. The decrease was primarily attributable to a decline in sales
of outdoor lighting to a mass retail customer that occurred in the first half
of the six-month period ended December 31, 2003 compared to the same period in
the previous year, as well a decline in sales of seasonal or non-core program
items that occurred in the latter half of the six-month period. TSIs sales
results can have a high degree of variability due to the buying patterns of its
mass retail customers, which can be inconsistent from period to period.

Gross Profit. Gross profit of the Company as a percentage of sales increased
to 33.8% of net sales for the six months ended December 31, 2003 compared to
32.3% for the same period of 2002. The gross margin of the Craftmade division
was unchanged at 39.6% of sales for each six month period. The gross margin of
the TSI division increased to 15.9% of sales for the six months ended December
31, 2003 compared to

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15.3% of sales in the year ago period. The improvement in the gross margin of
TSI was due to a write down of slow moving inventory in the amount of $426,000
in the six-month period ended December 31, 2002 that did not occur in the
six-month period ended December 31, 2003.

Selling, General and Administrative Expenses. Total selling, general and
administrative (SG&A) expenses of the Company increased $86,000 to $7,452,000
or 21.0% of net sales for the six months ended December 31, 2003 from
$7,366,000 or 21.1% of net sales for the same six-month period last year. Total
SG&A expense of the Craftmade division was relatively unchanged at $5,551,000
or 20.7% of sales compared to $5,552,000 or 22.7% of sales for the same period
in the previous year. The decline in SG&A expense as a percent of sales is
primarily attributable to the effect of increased sales leveraging down fixed
SG&A expenses. Total SG&A expenses of the TSI division increased $86,000 to
$1,901,000 or 21.9% of sales for the six-month period ended December 31, 2003
from $1,814,000 or 17.2% 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 the
effect of the decline in revenue and the de-leveraging effect on fixed SG&A
expenses. The increase in SG&A expenses in total dollars was primarily related
to costs incurred in connection with the closing of the California office.

Interest Expense. Net interest expense of the Company decreased $84,000 to
$328,000 for the six-months ended December 31, 2003 from $412,000 for the same
six-month period last year. This decrease was primarily the result of a
decline in the outstanding balance of the Companys revolving line 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 decreased $500,000 to
$1,921,000 from $2,421,000 for the six months ended December 31, 2003 and 2002,
respectively. The decrease in income from investees was due to a charge of
$2,100,000 or $1,050,000 net of the 50% minority interest, incurred in
connection with the roll out of a new product at PHI. The $1,050,000 charge
was partially offset by an increase in Design Trends pretax net income in the
amount of $445,000. The increase in Design Trends income was driven by a net
sales increase of 31.7% or $5,159,000 to $21,410,000 for the six months ended
December 31, 2003 from $16,251,000 the same period in the previous year.

Provision for Income Taxes. The provision for income taxes increased to
$2,125,000 or 36.3% of net income before income taxes but after minority
interest expense, for the six months ended December 31, 2003, from $2,046,000
or 36.4% for the same period of the prior year.

17



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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES

The Companys cash decreased $2,356,000 from $3,469,000 at June 30, 2003 to
$1,113,000 at December 31, 2003. The Companys operating activities provided
cash of $4,486,000, which was primarily attributable to (i) net income after
taxes but before depreciation and amortization of $1,950,000 from the Companys
wholly owned subsidiaries, (ii) dividends from 50% owned investees of
$2,903,000, and (iii) collections of customer receivables of $1,955,000. These
amounts were partially offset by an increase in receivables from investees of
$1,989,000 and an increase in inventory of $293,000. The increase in
receivables from investees was related to cash advances made to PHI to fund the
$2.1 million charge associated with the roll out of a new product to a customer
at PHI, as discussed in Results of Operations, above.

The $79,000 of cash used in investing activities related to additions to
equipment, which consisted primarily of warehouse racking, as well as purchases
of office equipment in connection with the relocation of employees from the
California office to the Companys headquarters in Coppell, Texas.

Cash used in financing activities of $6,766,000 was primarily the result of (i)
principal payments of $396,000 on the Companys facility note payable, (ii)
principal payments of $4,597,000 on the Companys line of credit, and (iii)
cash dividends of $1,113,000.

At December 31, 2003, subject to continued compliance with certain covenants
and restrictions, the Company had a $20,000,000 line of credit, of which
$7,403,000 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, debt service payments, treasury
stock purchases, and any future dividend payments, as well as fund its
projected growth over the next twelve months. The line of credit matures on
October 31, 2005.

At December 31 2003, $4,735,000 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.

With respect to the Companys 50%-owned investees, PHI has a $3,000,000 line of
credit (the $3 Million Line of Credit) with Wachovia Bank, N.A. (Wachovia),
at an interest rate equal to the Monthly LIBOR index plus 2%. There was an
outstanding balance of $3,000,000 on the $3 Million Line of Credit at December
31, 2003,

18



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##### Table of Contents



which expires October 1, 2004. PHI has a $500,000 three-year note
payable to Wachovia (the $500 Thousand Note) maturing on July 29, 2005, of
which $278,000 was outstanding at December 31, 2003. The $500 Thousand Note
bears interest at a rate equal to the Monthly LIBOR Index plus 2.5%. In
addition, on November 24, 2003, PHI entered into a loan agreement with Wachovia
(the $2.1 Million Note) whereby Wachovia agreed to advance up to $2,100,000
to PHI, subject to PHIs continued compliance with certain loan covenants
specified by the agreement. The $2.1 Million Note bears interest at a rate
equal to the Monthly LIBOR Index plus 2.5%. At December 31, 2003, there was a
zero balance outstanding under the $2.1 million facility, which is scheduled to
mature on March 15, 2005. Pursuant to the Companys understanding with
Wachovia, when funds are advanced under
the $2.1 Million Note, the availability under the $3 Million Line of Credit
will be reduced to $2,000,000. Craftmade agreed to be the guarantor of the $3
Million Line of Credit, the $500 Thousand Note and the $2.1 Million Note for
business purposes, in order to induce the lender to provide these loans to PHI.

Fanthing, Craftmades ceiling fan manufacturer, has provided Craftmade with a
$1,000,000 credit limit, pursuant to which it will manufacture and ship ceiling
fans prior to receipt of payment from Craftmade. Accordingly, payment can be
deferred until delivery of such products. At present levels, such credit
facility is equivalent to approximately three weeks supply of ceiling fans and
represents a supplier commitment, which, in the opinion of the Companys
management, is unusual for the industry and favorable to the Company. This
manufacturer is not required to provide this credit facility under its
agreement with Craftmade, and it may discontinue this arrangement at any time.

TSI, PHI and Design Trends maintained inventory levels of $441,000, $1,670,000
and $3,158,000 respectively at December 31, 2003. The sales of each of these
entities are highly concentrated with one mass merchandiser customer. Should
the revenues generated by TSI, PHI, and Design Trends from their programs with
this particular mass merchandiser be at levels significantly lower 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 any alternative
sources would generate similar sales levels and profit margins as anticipated
with the current mass merchandiser customer.

On December 10, 2003, the Companys Board of Directors authorized the Companys
management to repurchase up to 500,000 shares of the Companys outstanding
common stock. As of February 8, 2004 the Company had repurchased 100,649
shares at an aggregate cost of $2,547,774 under this program.

19



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|       |  |                                                            
|------ |  | -----------------------------------------------------------
|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 December 31, 2003, the Company had a $20,000,000 line of credit with The
Frost National Bank (the Craftmade Line of Credit) at an interest rate of
prime (4.00% at December 31, 2003) less .5%, of which $7,403,000 was
outstanding. The line of credit is due on demand; however, if no demand is
made, it is scheduled to mature October 31, 2005.

At December 31, 2003, PHI had the
$3 Million Line of Credit with Wachovia at an interest rate equal to the
one-month LIBOR plus 2%. At December 31, 2003, the one-month LIBOR rate was
equal to 1.10%. There was a $3,000,000 outstanding balance on the line of
credit at December 31, 2003. The $3 Million Line of Credit is due on demand; however,
if no demand is made, it is scheduled to mature October 1, 2004.

PHI has the $500 Thousand Note payable to Wachovia maturing on July 29,
2005, of which $278,000 was outstanding at December 31, 2003. The note bears
interest at a rate equal to the Monthly LIBOR Index plus 2.5%. In addition, on
November 24, 2003, PHI entered into the $2.1 Million Note with Wachovia whereby
Wachovia agreed to advance up to $2,100,000 to PHI, subject to PHIs continued
compliance with certain loan covenants specified by the agreement. At December
31, 2003, there was a zero balance outstanding under the
$2.1 Million Note, which is scheduled to mature on March 15, 2005.

The short-term nature of each of the
Craftmade Line of Credit and the $3 Million
Line of Credit, the $500 Thousand Note and the $2.1 Million Note (collectively,
the PHI Lines of Credit), the Company is subject to market-risk-associated,
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 $74,000. Consequently, an increase in
the prime rate of five percentage points

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(5%) would result in an estimated
annualized increase in interest expense for the Company of approximately
$370,000.

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 $33,000. 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 $164,000.

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 February 9, 2004 one U.S. dollar equaled $33.20 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. All other purchases of the Company 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 December 31, 2003, the Company purchased
approximately $4,552,000 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 $455,000, based on the Companys purchases during the
fiscal quarter ended December 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 $2,276,000, based on
the Companys purchases during the fiscal quarter ended December 31, 2003 (on
an annualized basis). A $10 incremental appreciation of the Taiwanese dollar
would result in an increase of approximately $4,552,000 on an annualized basis,
based on the Companys purchases during the fiscal quarter ended December 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

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purchases from Fanthing for
the fiscal quarter ended December 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



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PART II

OTHER INFORMATION




|        |  |                  
|------- |  | -----------------
|Item 1. |  | Legal Proceedings

On August 8, 2001, Lamps Plus, Inc. and Pacific Coast Lighting (collectively
Lamps Plus) sued several defendants, including Patrick S. Dolan (Dolan),
Design Trends, and Craftmade International, Inc. (collectively, the Craftmade
Parties), for alleged patent infringement in the United States District Court
for the Northern District of Texas. The suit alleged that the Craftmade Parties
infringed two patents  a design patent and a utility patent  held by Lamps
Plus related to a design for a free-standing torchiere lamp with attached
sidelights. The suit sought a declaration that the two patents were infringed,
treble damages, a preliminary and permanent injunction from further alleged
infringement, attorneys fees, and other unspecified damages. The Craftmade
Parties denied the allegations of patent infringement, asserting affirmative
defenses, and counterclaimed for a declaration that the patents are invalid,
not infringed, and unenforceable.

In November 2003, the lawsuit went to trial and on November 20, 2003, the jury
found that the Craftmade Parties directly and indirectly infringed the utility
patent with four of the five lamp models, and that their infringement was
willful. The jury found that the Craftmade Parties did not infringe the design
patent for any of the five accused lamp models. The jury further found that
neither patent was invalid or unenforceable, and awarded damages against the
Craftmade Parties, jointly and severally, in the amount of $143,385.

Lamps Plus has filed a motion to seek treble damages based on the jurys
finding that the infringement by the Craftmade Parties was willful, and their
reasonable attorneys fees and costs of court.

The Craftmade Parties have filed a renewed motion for judgment as a matter of
law and alternative motion for new trial, requesting that the court enter a
judgment, notwithstanding the jury verdict, that the Craftmade Parties did not
infringe the utility patent and that both patents are invalid and
unenforceable. The Craftmade Parties also requested that they be awarded their
attorneys fees and costs if the court finds that Lamps Plus committed
inequitable conduct in connection with obtaining their patents. The Craftmade
Parties also have filed a motion for partial judgment on the jurys verdict,
seeking that judgment be entered in favor of the Craftmade Parties on the
jurys finding that they did not infringe the design patent and that one of the
five accused lamp models did not infringe the utility patent.

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The outcome of this litigation is uncertain. All post-verdict motions are
still pending, and a final judgment has not yet been
entered. Therefore, there can be no assurance that judgment will not be
entered in Lamps Plus favor and that treble damages and attorneys fees will
not be awarded against the Craftmade Parties.

With regard to the foregoing litigation (the Lawsuit), the Craftmade Parties
entered into an agreement (the Agreement), that sets forth the
responsibilities of each of them for payment of fees, costs and expenses of the
Lawsuit, along with the rights to any recovery as a result of the Lawsuit.
Pursuant to the Agreement, Design Trends (which is owned jointly by Craftmade
and Dolan Northwest, LLC) agreed to pay the first $150,000 of legal fees and
expenses incurred by the Parties after February 21, 2003. On April 16, 2003,
Dolan Northwest became responsible for all legal fees and expenses incurred by
the Craftmade Parties in connection with the Lawsuit from that date forward,
and agreed to indemnify and hold harmless Craftmade and Design Trends from and
against any and all claims, liabilities, or losses arising out of the legal
fees and expenses incurred in the defense of the Lawsuit after February 21,
2003.

Pursuant to the Agreement, Dolan Northwest is solely responsible for any
judgment that may be rendered in the Lawsuit against any of the Craftmade
Parties and has agreed to indemnify and hold harmless Craftmade and Design
Trends from and against any and all liabilities, losses, damages, costs or
other expenses associated with any such judgment. Dolan Northwest is also
responsible for all additional legal fees and expenses (including any
supersedeas bond posted), which may be incurred in the prosecution or defense
of any appeal perfected by any party to the Lawsuit. Dolan Northwest also has
agreed to assume and be responsible for all obligations of Design Trends to
indemnify Lowes Companies, Inc. (who was also named as a defendant in the
Lawsuit although the jury found that Lowes did not infringe on any of Lamps Plus' patents) or any of its subsidiaries for any loss or damage incurred as a result
of the Lawsuit. In the event of a recovery in the Lawsuit in favor of any or
all of the Craftmade Parties, Dolan is entitled to retain all of the proceeds
of such recovery.

As an accommodation and convenience to Dolan Northwest, Design Trends has
agreed to advance the funds necessary to pay the legal fees and expenses for
which Dolan Northwest will be responsible as well as any final judgment that
may be entered against any of the Craftmade Parties in the Lawsuit. Any such
advances have been and will continue to be treated by Design Trends as loans
and are charged against Dolan Northwests capital account in Design Trends. In
the event that Dolan Northwests capital account is insufficient to pay any
such fees and expenses for which Dolan Northwest is responsible

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under the
Agreement, Design Trends shall notify in writing both Pat Dolan and Dolan
Northwest of such deficiency and Dolan Northwest shall reimburse Design Trends
for any such fees and expenses (including any final judgment) within ten days.
Pat Dolan has agreed to unconditionally guarantee the obligations of Dolan
Northwest under this Agreement.
















|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Item 2. |  | Changes in Securities and Use of Proceeds                                                                                                                                                                                                                                                                                                                                                                                          
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        |  | not applicable                                                                                                                                                                                                                                                                                                                                                                                                                     
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Item 3. |  | Defaults Upon Senior Securities                                                                                                                                                                                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        |  | not applicable                                                                                                                                                                                                                                                                                                                                                                                                                     
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|Item 4. |  | Submission of Matters to a Vote of Security Holders                                                                                                                                                                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        |  | At the annual meeting of the Companys stockholders on November 26, 2003, the
stockholders of the Company (i) elected James R. Ridings, Kathleen B. Oher,
Clifford Crimmings, John DeBlois, A. Paul Knuckley, Jerry E. Kimmel, Lary C.
Snodgrass, R. Don Morris, L. Dale Griggs and William E. Bucek as directors of
the Company; and (ii) ratified the appointment of PricewaterhouseCoopers LLP as
independent auditors for 2004.

The vote in the election of directors was follows:

Number of Votes
    
    Number of Votes
    
    Abstentionsof Common Stock
    
    of Common Stock
    
    andFor
    
    Withheld
    
    Broker Non-VotesJames Ridings
    
    
    2,471,418
    
    
    
    621,663
    
    
    
    Kathleen B. Oher
    
    
    2,468,235
    
    
    
    624,846
    
    
    
    Clifford Crimmings
    
    
    2,470,993
    
    
    
    622,088
    
    
    
    John DeBlois
    
    
    2,541,992
    
    
    
    551,089
    
    
    
    A. Paul Knuckley
    
    
    3,077,648
    
    
    
    15,433
    
    
    
    Jerry E. Kimmel
    
    
    3,077,924
    
    
    
    15,157
    
    
    
    Lary C. Snodgrass
    
    
    3,077,557
    
    
    
    15,524
    
    
    
    R. Don Morris
    
    
    3,075,961
    
    
    
    17,120
    
    
    
    L. Dale Griggs
    
    
    3,075,663
    
    
    
    17,418
    
    
    
    William E. Bucek
    
    
    3,076,423
    
    
    
    16,658
    
    
    
    


The vote in the ratification of PricewaterhouseCoopers LLP as independent
auditors for the fiscal year ending June 30, 2004 was 3,077,405 for, 13,365
against, and 2,311 abstentions and broker non-votes.

|        |  |                                 
|------- |  | --------------------------------
|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                                                                                                                      

25



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| |      |  |                                                                                                                                                                                                                                                                                                                                                                    
| | ---- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |  | 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, and
herein incorporated by reference.                                                                    
| |      |  |                                                                                                                                                                                                                                                                                                                                                                    
| | 10.2 |  | Assignment of Rents and Leases dated
December 21, 1995, between Craftmade International, Inc.
and Allianz Life Insurance Company of North America
(including exhibits), previously filed as an exhibit in
Form 10-Q for the quarter ended December 31, 1995, and
herein incorporated by reference.                                                                 
| |      |  |                                                                                                                                                                                                                                                                                                                                                                    
| | 10.3 |  | Deed of Trust, Mortgage and Security
Agreement made by Craftmade International, Inc., dated
December 21, 1995, to Patrick M. Arnold, as trustee for
the benefit of Allianz Life Insurance Company of North
America (including exhibits), previously filed as an
exhibit in Form 10-Q for the quarter ended December 31,
1995, and herein incorporated by reference.
| |      |  |                                                                                                                                                                                                                                                                                                                                                                    
| | 10.4 |  | Second Amended and Restated Credit
Agreement dated November 14, 1995, among Craftmade
International, Inc., Nations Bank of Texas, N.A., as
Agent and the Lenders defined therein (including
exhibits), previously filed as an exhibit in Form 10-Q
for the quarter ended December 31, 1995, and herein
incorporated by reference.                                  
| |      |  |                                                                                                                                                                                                                                                                                                                                                                    
| | 10.5 |  | Lease Agreement dated November 30,
1995, between Craftmade International, Inc. and TSI
Prime, Inc., previously filed as an exhibit in                                                                                                                                                                                                                              

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| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | ----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |  | Form 10-Q
for the quarter ended December 31, 1995, and herein
incorporated by reference.                                                                                                                                                                                                                                                                                                                                                                                                                      
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | 10.6  |  | Revolving credit facility with Texas
Commerce Bank, previously filed as an exhibit in Form
10-K for the year ended June 30, 1996, and herein
incorporated by reference.                                                                                                                                                                                                                                                                                                                                       
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | 10.7  |  | Agreement and Plan of Merger, dated as
of July 1, 1998, by and among Craftmade International,
Inc., Trade Source International, Inc., a Delaware
corporation, Neall and Leslie Humphrey, John DeBlois, the
Wiley Family Trust,
James Bezzerides, the Bezzco Inc. Employee Retirement
Trust and Trade Source International, Inc., a
California corporation, filed as Exhibit 2.1 to the
Companys Current Report on Form 8-K filed July 15,
1998 (File No. 33-33594-FW) and herein incorporated by
reference.  
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | 10.8  |  | Voting Agreement, dated July 1, 1998,
by and among James R. Ridings, Neall Humphrey and John
DeBlois, filed as Exhibit 2.1 to the Companys Current
Report on Form 8-K filed July 15, 1998 (File No.
33-33594-FW) and herein incorporated by reference.                                                                                                                                                                                                                                                       
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | 10.9  |  | Third Amendment to Credit Agreement,
dated July 1, 1998, by and among Craftmade International,
Inc., a Delaware corporation, Trade Source International,
Inc., a Delaware corporation, Chase Bank of Texas,
National Association (formerly named Texas Commerce Bank,
National Association) and Frost National Bank (formerly
named Overton Bank and Trust), filed as Exhibit 2.1 to
the Companys Current Report on Form 8-K filed July 15,
1998 (File No. 33-33594-FW) and herein incorporated by
reference.
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | 10.10 |  | Consent to Merger by Chase Bank of
Texas, National Association and Frost National Bank,
filed as Exhibit 2.1 to the Companys Current Report on
Form 8-K filed July 15, 1998 (File No. 33-33594-FW) and
herein incorporated by reference.                                                                                                                                                                                                                                                                     
| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | 10.11 |  | Employment Agreement, dated July 1,
1998, by and among Craftmade International, Inc., Trade                                                                                                                                                                                                                                                                                                                                                                                                                   

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| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |  | 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 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                                                                                                                                                                                                                                                                                           

28



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##### Table of Contents



| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |  | 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 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                                                                                                                                                   

29



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##### Table of Contents



| |       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | ----- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |  | 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.              

30



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##### Table of Contents



| |        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.
| |        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | 10.27  |  | Modification, Renewal and Extension
Agreement dated October 27, 2003, by and between The
Frost National Bank, a national banking association, and
Craftmade International, Inc., a Delaware corporation,
filed as Exhibit 10.27 to the Companys Quarterly
Report on Form 10-Q filed November 14, 2003 (File No.
000-26667) and herein incorporated by reference.                                                                                                                     
| |        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | *10.28 |  | Note and Security Agreement dated November 24, 2003 by
Prime/Home Impressions LLC, a North Carolina limited
liability company, to Wachovia Bank, N.A., with Security
Agreement of Prime/Home Impressions, LLC, and Guaranty
Agreement of Craftmade International, Inc.                                                                                                                                                                                                                
| |        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | *10.29 |  | Agreement regarding Lamps Plus, Inc. Litigation, entered
into on December 31, 2003 and effective February 21, 2003,
by and among Craftmade International, Inc., a Delaware
corporation, Design Trends, LLC, a Delaware limited
liability company, Dolan Northwest, LLC, an Oregon limited
liability company and Patrick S. Dolan.                                                                                                                                                     
| |        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | *31.1  |  | Certification of James R. Ridings, Chief
Executive Officer of the Company, pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                 
| |        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | *31.2  |  | Certification of Kathleen B. Oher, Chief
Financial Officer of the Company, pursuant to Section 302
of the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                                                                                                                                 

31



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##### Table of Contents



| |       |  |                                                                                                                                                                                    
| | ----- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | *32.1 |  | Certification of James R. Ridings, Chief
Executive Officer of the Company, pursuant to 18 U.S.C.
Section 1350 as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
| |       |  |                                                                                                                                                                                    
| | *32.2 |  | Certification of Kathleen B. Oher, Chief
Financial Officer of the Company, pursuant to 18
U.S.C. Section 1350 as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.



---

*     Each
document marked with an asterisk is filed
herewith.

32



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##### Table of Contents





| | b). |  | Reports on Form 8-K
| | --- |  | -------------------

On December 10, 2003, the Company filed a Form 8-K concerning the
issuance of a press release regarding the Companys stock repurchase
program reported under Item 5 and Item 7.

33



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##### Table of Contents






SIGNATURES

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 February 17, 2004 |                               | /s/ James R. Ridings   
|                       |                               |                        
|                       |                               | JAMES R. RIDINGS       
|                       |                               | President and Chief    
|                       |                               | Executive Officer      
|                       |                               |                        
|Date February 17, 2004 |                               | /s/ Kathleen B. Oher   
|                       |                               | KATHLEEN B. OHER       
|                       |                               | Chief Financial Officer

34



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##### Table of Contents






Index to Exhibits

|        |  |                                                                                                                                                                                                                                                                                                   
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                   
|Number  |  | Description                                                                                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                   
|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, and herein incorporated by reference.   
|        |  |                                                                                                                                                                                                                                                                                                   
|10.2    |  | Assignment of Rents and Leases dated December 21, 1995, between Craftmade
International, Inc. and Allianz Life Insurance Company of North America
(including exhibits), previously filed as an exhibit in Form 10-Q for the
quarter ended December 31, 1995, and herein incorporated by reference.
|        |  |                                                                                                                                                                                                                                                                                                   
|10.3    |  | Deed of Trust, Mortgage and Security Agreement made by Craftmade
International, Inc., dated December 21, 1995, to Patrick M. Arnold, as
trustee for the benefit of Allianz Life Insurance Company of North America
(including exhibits), previously filed as an exhibit in Form 10-Q for          





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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Number  |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        |  | the quarter ended December 31, 1995, and herein incorporated by
reference.                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.4    |  | Second Amended and Restated Credit Agreement dated November 14, 1995,
among Craftmade International, Inc., Nations Bank of Texas, N.A., as Agent
and the Lenders defined therein (including exhibits), previously filed as
an exhibit in Form 10-Q for the quarter ended December 31, 1995, and
herein incorporated by reference.                                                                                                                                                                             
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.5    |  | Lease Agreement dated November 30, 1995, between Craftmade
International, Inc. and TSI Prime, Inc., previously filed as an exhibit in
Form 10-Q for the quarter ended December 31, 1995, and herein incorporated
by reference.                                                                                                                                                                                                                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.6    |  | Revolving credit facility with Texas Commerce Bank, previously filed as
an exhibit in Form 10-K for the year ended June 30, 1996, and herein
incorporated by reference.                                                                                                                                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.7    |  | Agreement and Plan of Merger, dated as of July 1, 1998, by and among
Craftmade International, Inc., Trade Source International, Inc., a
Delaware corporation, Neall and Leslie Humphrey, John DeBlois, the Wiley
Family Trust, James Bezzerides, the Bezzco Inc. Employee Retirement Trust
and Trade Source International, Inc., a California corporation, filed as
Exhibit 2.1 to the Companys Current Report on Form 8-K filed July 15,
1998 (File No. 33-33594-FW) and herein incorporated by reference.  
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.8    |  | Voting Agreement, dated July 1, 1998, by and among James R. Ridings,
Neall Humphrey and John DeBlois, filed as Exhibit 2.1 to the Companys
Current Report on Form 8-K filed July 15, 1998 (File No. 33-33594-FW) and
herein incorporated by reference.                                                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.9    |  | Third Amendment to Credit Agreement, dated July 1, 1998, by and among
Craftmade International, Inc., a Delaware corporation, Trade Source
International, Inc., a Delaware corporation, Chase Bank of Texas, National
Association (formerly named Texas Commerce Bank, National Association) and
Frost National Bank (formerly named Overton Bank and Trust), filed as
Exhibit 2.1 to the Companys Current Report on Form 8-K filed July 15,
1998 (File No. 33-33594-FW) and herein incorporated by reference.
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.10   |  | Consent to Merger by Chase Bank of Texas, National Association and Frost
National Bank, filed as Exhibit 2.1 to the Companys Current Report on
Form 8-K filed July 15, 1998 (File No. 33-33594-FW) and herein
incorporated by reference.                                                                                                                                                                                                                                                                     





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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|Number  |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|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 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                                                                                                                                                                                                                                                                                                                                                                                               





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##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|Number  |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|        |  | 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.   
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|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,                                                                                                                                                                                                                                                                                                                                                                                      





---



##### Table of Contents



|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|Number  |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|        |  | 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.                                                        
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10.27   |  | Modification, Renewal and Extension Agreement dated October 27, 2003, by
and between The Frost National Bank, a national banking association, and
Craftmade International, Inc., a Delaware corporation, filed as Exhibit
10.27 to the Companys Quarterly Report on Form 10-Q filed November 14,
2003 (File No. 000-26667) and herein incorporated by reference.                                                                                                                                                                             
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|*10.28  |  | Note and Security Agreement dated November 24, 2003 by Prime/Home
Impressions LLC, a North Carolina limited liability company, to Wachovia
Bank, N.A., with Security Agreement of Prime/Home Impressions, LLC, and
Guaranty Agreement of Craftmade International, Inc.                                                                                                                                                                                                                                                                        
|        |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|*10.29  |  | Agreement Regarding Lamps Plus, Inc. Litigation, entered
into on December 31, 2003 and effective February 21, 2003,                                                                                                                                                                                                                                                                                                                                                                                                                           





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##### Table of Contents



|        |  |                                                                                                                                                                                                              
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |  |                                                                                                                                                                                                              
|Number  |  | Description                                                                                                                                                                                                  
|        |  |                                                                                                                                                                                                              
|        |  | by and among Craftmade International, Inc., a Delaware
corporation, Design Trends, LLC, a Delaware limited liability
company, Dolan Northwest, LLC, an Oregon limited liability
company and Patrick S. Dolan.
|        |  |                                                                                                                                                                                                              
|*31.1   |  | Certification of James R. Ridings, Chief Executive Officer of the
Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                        
|        |  |                                                                                                                                                                                                              
|*31.2   |  | Certification of Kathleen B. Oher, Chief Financial Officer of the
Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                        
|        |  |                                                                                                                                                                                                              
|*32.1   |  | Certification of James R. Ridings, Chief Executive Officer of the
Company, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.                          
|        |  |                                                                                                                                                                                                              
|*32.2   |  | Certification of Kathleen B.Oher, Chief Financial Officer
of the Company, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.                           



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*     Each
document marked with an asterisk is filed herewith.