##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 For the quarterly period ended March 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.
 Commission File Number 000-26667
 CRAFTMADE INTERNATIONAL, INC.
  DELAWARE
(State or other jurisdiction of 
incorporation or organization)
    
    75-2057054
(I.R.S. employer
identification no.)
 650 SOUTH ROYAL LANE, SUITE 100
 COPPELL, TEXAS 75019
  (972) 393-3800
 þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



CRAFTMADE INTERNATIONAL, INC.
AND SUBSIDIARIES
 TABLE OF CONTENTS
 Part I. Financial InformationItem 1. Financial StatementsItem 2. Managements Discussion and Analysis of Financial
Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures About Market
RiskItem 4. Controls and ProceduresPart II. Other InformationItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 2. Unregistered Sales of Equity Securities and Use of
ProceedsItem 3. Defaults Upon Senior SecuritiesItem 4. Submission of Matters to a Vote of Security HoldersItem 5. Other InformationItem 6. ExhibitsCertification of CEO Pursuant to Section 302Certification of CFO Pursuant to Section 302Certification of CEO Pursuant to Section 906Certification of CFO Pursuant to Section 906




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##### Table of Contents



PART I
FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
 Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales
    
    $
    54,918
    
    
    $
    22,492
    
    
    $
    98,468
    
    
    $
    77,181Cost of goods sold
    
    
    (44,226
    )
    
    
    (15,401
    )
    
    
    (73,732
    )
    
    
    (52,784
    )Gross profit
    
    
    10,692
    
    
    
    7,091
    
    
    
    24,736
    
    
    
    24,397Gross profit as a percentage of net sales
    
    
    19.5
    %
    
    
    31.5
    %
    
    
    25.1
    %
    
    
    31.6
    %Selling, general and administrative expenses
    
    
    (8,848
    )
    
    
    (5,483
    )
    
    
    (19,366
    )
    
    
    (15,702
    )Depreciation and amortization
    
    
    (210
    )
    
    
    (195
    )
    
    
    (628
    )
    
    
    (596
    )Total operating expenses
    
    
    (9,058
    )
    
    
    (5,678
    )
    
    
    (19,994
    )
    
    
    (16,298
    )Income from operations
    
    
    1,634
    
    
    
    1,413
    
    
    
    4,742
    
    
    
    8,099Interest expense, net
    
    
    (524
    )
    
    
    (351
    )
    
    
    (1,144
    )
    
    
    (1,112
    )Other Income
    
    
    139
    
    
    
    
    
    
    
    139
    
    
    
    Income before income taxes and minority interest
    
    
    1,249
    
    
    
    1,062
    
    
    
    3,737
    
    
    
    6,987Income tax (expense) / benefit
    
    
    (343
    )
    
    
    118
    
    
    
    (929
    )
    
    
    (1,645
    )Income before minority interest
    
    
    907
    
    
    
    1,180
    
    
    
    2,809
    
    
    
    5,342Minority interest
    
    
    (267
    )
    
    
    (447
    )
    
    
    (1,069
    )
    
    
    (1,225
    )Net income
    
    $
    639
    
    
    $
    733
    
    
    $
    1,739
    
    
    $
    4,117Weighted average common shares outstanding:Basic
    
    
    5,694
    
    
    
    5,204
    
    
    
    5,366
    
    
    
    5,204Diluted
    
    
    5,700
    
    
    
    5,206
    
    
    
    5,373
    
    
    
    5,207Basic earnings per common share
    
    $
    0.11
    
    
    $
    0.14
    
    
    $
    0.32
    
    
    $
    0.79Diluted earnings per common share
    
    $
    0.11
    
    
    $
    0.14
    
    
    $
    0.32
    
    
    $
    0.79Cash dividends declared per common share
    
    $
    0.12
    
    
    $
    0.12
    
    
    $
    0.36
    
    
    $
    0.36
 
 1




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##### Table of Contents



CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 March 31,
    
    
    June 30,2008
    
    
    2007(Unaudited)ASSETSCurrent assetsCash
    
    $
    986
    
    
    $
    928Accounts receivable, net
    
    
    42,881
    
    
    
    18,082Inventories, net
    
    
    24,261
    
    
    
    18,076Income taxes receivable
    
    
    2,019
    
    
    
    1,376Deferred income taxes
    
    
    1,106
    
    
    
    1,251Prepaid expenses and other current assets
    
    
    2,298
    
    
    
    1,503Total current assets
    
    
    73,551
    
    
    
    41,216Property and equipment, net
    
    
    10,550
    
    
    
    8,379Goodwill
    
    
    14,100
    
    
    
    13,644Other intangibles, net
    
    
    1,351
    
    
    
    1,502Other assets
    
    
    1,588
    
    
    
    10Total non-current assets
    
    
    27,589
    
    
    
    23,535Total assets
    
    $
    101,140
    
    
    $
    64,751LIABILITIES, MINORITY INTEREST AND STOCKHOLDERS EQUITYCurrent liabilitiesBook overdrafts
    
    $
    95
    
    
    $
    48Accounts payable
    
    
    13,404
    
    
    
    5,903Other accrued expenses
    
    
    3,463
    
    
    
    2,472Current portion of long-term obligations
    
    
    499
    
    
    
    264Total current liabilities
    
    
    17,461
    
    
    
    8,687Non-current liabilitiesLong-term obligations
    
    
    42,465
    
    
    
    18,938Deferred income taxes
    
    
    1,178
    
    
    
    1,107Total non-current liabilities
    
    
    43,644
    
    
    
    20,045Total liabilities
    
    
    61,104
    
    
    
    28,732Minority interest
    
    
    3,339
    
    
    
    3,495Commitments and contingencies (Note 9)Stockholders equityPreferred stock, $1.00 par value, 2,000,000 shares authorized; nil shares issued
    
    
    
    
    
    
    Common stock, $0.01 par value, 15,000,000 shares authorized; 10,204,420 shares issued
    
    
    102
    
    
    
    97Additional paid-in capital
    
    
    22,192
    
    
    
    17,831Retained earnings
    
    
    52,529
    
    
    
    52,722Less: treasury stock, 4,499,920 common shares at cost
    
    
    (38,126
    )
    
    
    (38,126
    )Total stockholders equity
    
    
    36,697
    
    
    
    32,524Total liabilities, minority interest and stockholders equity
    
    $
    101,140
    
    
    $
    64,751
 
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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
 Nine Months EndedMarch 31,
    
    
    March 31,2008
    
    
    2007Net cash provided (used) in operating activities
    
    $
    (3,601
    )
    
    $
    5,828Cash flows from investing activitiesAcquisition of assets of Woodard, LLC.
    
    
    (16,135
    )
    
    
    Acquisition of Marketing Impressions, Inc.Initial payment and acquisition-related costs, net of cash acquired
    
    
    
    
    
    
    (1,501
    )Additional contingent consideration
    
    
    (486
    )
    
    
    (1,075
    )Additions to property and equipment
    
    
    (436
    )
    
    
    (575
    )Cash used in investing activities
    
    
    (17,057
    )
    
    
    (3,151
    )Cash flows from financing activitiesNet proceeds from/(payments) on note payable
    
    
    10,668
    
    
    
    (842
    )Net proceeds from/(payments) on lines of credit
    
    
    13,125
    
    
    
    (636
    )Cash dividends
    
    
    (1,874
    )
    
    
    (1,873
    )Distributions to minority interest members
    
    
    (1,225
    )
    
    
    (1,597
    )Increase/(decrease) in book overdrafts
    
    
    47
    
    
    
    99Principal payments on capital lease
    
    
    (26
    )
    
    
    Proceeds from capital lease
    
    
    
    
    
    
    164Stock options exercised
    
    
    
    
    
    
    10Net cash provided (used) in financing activities
    
    
    20,716
    
    
    
    (4,675
    )Net increase/(decrease) in cash
    
    
    58
    
    
    
    (1,998
    )Cash at beginning of period
    
    
    928
    
    
    
    2,164Cash at end of period
    
    $
    986
    
    
    $
    166
 
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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note 1  BASIS OF PREPARATION AND PRESENTATION
    4




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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note 2  ACQUISITIONS
 Acquisition of Certain Net Assets of Woodard, LLC
   Purchase Price Summary
(Dollars in thousands)
 Cash paid at closing
    
    $
    16,168GAAP value of 500,000 shares issued
    
    
    4,000
    (1)Value of 200,000 Warrants
    
    
    279
    (2)Purchase price adjustment (Settled April, 2008)
    
    
    (1,272
    )Total consideration
    
    $
    19,175
 
 (1)
    
    The value of the 500,000
shares of common stock was
based on the average closing prices of Craftmades
common stock, $0.01 par value per share, for the two
days before, the day of, and the two days after the
date of the announcement of the merger or $8.00 per
share.(2)
    
    The 200,000 common stock
warrants were valued using the Black-Scholes
calculation at a warrant price of $1.39 per share
using the following assumptions: Expected volatility
    
    
    33
    %Risk-free interest rate
    
    
    3.81
    %Expected lives
    
    10 yearsDividend yield
    
    
    5.8
    %
  5




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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Preliminary Purchase Price AllocationInitial estimated purchase price
    
    
    
    
    
    $
    20,168Less: Working capital adjustment
    
    
    
    
    
    
    (1,272
    )Value of Warrants
    
    
    
    
    
    
    279Total Purchase Consideration
    
    
    
    
    
    $
    19,175Acquired Assets (Adjusted to estimated fair value)Accounts receivable, net
    
    $
    12,710Inventories, net
    
    
    8,351Prepaid expenses and other current assets
    
    
    1,479Plant property and equipment
    
    
    2,274Goodwill
    
    
    Other intangible assets
    
    
    Other assets
    
    
    1,528Total Assets
    
    
    
    
    
    $
    26,342Assumed LiabilitiesAccounts payable
    
    $
    4,545Other accrued expenses
    
    
    1,598Other liabilities incurred during transactionProfessional Fees Associated with Acquisition
    
    
    685Restructuring Reserve
    
    
    339Total Liabilities
    
    
    
    
    
    $
    7,167Total Purchase Price
    
    
    
    
    
    $
    19,175
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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
   Unaudited Pro Forma Results
(In thousands, except per share data)
 Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Net sales(1)As reported
    
    $
    54,918
    
    
    $
    22,492
    
    
    $
    98,468
    
    
    $
    77,181Pro forma
    
    
    54,918
    
    
    
    55,287
    
    
    
    125,468
    
    
    
    143,290Net income(2)As reported
    
    $
    639
    
    
    $
    733
    
    
    $
    1,739
    
    
    $
    4,117Pro forma
    
    
    639
    
    
    
    1,537
    
    
    
    487
    
    
    
    5,513Basic earnings per shareAs reported
    
    $
    0.11
    
    
    $
    0.14
    
    
    $
    0.32
    
    
    $
    0.79Pro forma
    
    $
    0.11
    
    
    $
    0.27
    
    
    $
    0.09
    
    
    $
    0.97Diluted earnings per shareAs reported
    
    $
    0.11
    
    
    $
    0.14
    
    
    $
    0.32
    
    
    $
    0.79Pro forma
    
    $
    0.11
    
    
    $
    0.27
    
    
    $
    0.09
    
    
    $
    0.97
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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Acquisition of Marketing Impressions, Inc.
   Purchase Price Summary
(Dollars in thousands)
 As of March 31, 2008:Amount paid at closing, net of cash acquired
    
    $
    1,287Contingent payments earned
    
    
    2,153Acquisition-related costs
    
    
    220Total consideration as of March 31, 2008
    
    $
    3,660Percent of Adjusted Gross ProfitJuly 1, 2006 to August 31, 2011
    
    
    22
    %Additional Percent of Adjusted Gross ProfitJuly 1, 2006 to June 30, 2007 (Actual amount paid was $677)
    
    
    15
    %
  8




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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
  Purchase Price Allocation
(Dollars in thousands)
 As of
    
    
    Additional
    
    
    As ofJune 30,
    
    
    Contingent
    
    
    March 31,2007
    
    
    Consideration
    
    
    2008Assets:Accounts receivable
    
    $
    368
    
    
    $
    
    
    
    $
    368Inventory
    
    
    2
    
    
    
    
    
    
    
    2Property and equipment
    
    
    214
    
    
    
    
    
    
    
    214Deferred tax assets
    
    
    70
    
    
    
    
    
    
    
    70Acquired intangibles
    
    
    1,530
    
    
    
    
    
    
    
    1,530Goodwill
    
    
    2,164
    
    
    
    457
    
    
    
    2,6214,348
    
    
    
    457
    
    
    
    4,805Liabilities:Accounts payable
    
    
    1,120
    
    
    
    
    
    
    
    1,120Note payable and other liabilities
    
    
    24
    
    
    
    
    
    
    
    241,144
    
    
    
    
    
    
    
    1,144Total purchase price
    
    $
    3,204
    
    
    $
    457
    
    
    $
    3,661
  9




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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note 3  EARNINGS PER SHARE
  Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands, except per share data)Basic and diluted earnings per share:NumeratorNet income
    
    $
    639
    
    
    $
    733
    
    
    $
    1,739
    
    
    $
    4,117Denominator for basic EPSWeighted average common shares outstanding
    
    
    5,694
    
    
    
    5,204
    
    
    
    5,366
    
    
    
    5,204Denominator for diluted EPSWeighted average common shares outstanding
    
    
    5,694
    
    
    
    5,204
    
    
    
    5,366
    
    
    
    5,204Incremental shares for stock options/warrants
    
    
    6
    
    
    
    2
    
    
    
    7
    
    
    
    3Dilutive weighted average common shares
    
    
    5,700
    
    
    
    5,206
    
    
    
    5,373
    
    
    
    5,207Basic earnings per share
    
    $
    0.11
    
    
    $
    0.14
    
    
    $
    0.32
    
    
    $
    0.79Diluted earnings per share
    
    $
    0.11
    
    
    $
    0.14
    
    
    $
    0.32
    
    
    $
    0.79
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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note 4  SEGMENT INFORMATION
     11




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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
  Summary of Segment Information
 Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007(In thousands)Net salesCraftmade
    
    $
    23,146
    
    
    $
    13,714
    
    
    $
    49,726
    
    
    $
    43,943TSI
    
    
    31,772
    
    
    
    8,778
    
    
    
    48,742
    
    
    
    33,238Total
    
    $
    54,918
    
    
    $
    22,492
    
    
    $
    98,468
    
    
    $
    77,181Gross profitCraftmade
    
    
    6,328
    
    
    $
    4,949
    
    
    
    15,823
    
    
    $
    15,606TSI
    
    
    4,364
    
    
    
    2,142
    
    
    
    8,913
    
    
    
    8,791Total
    
    $
    10,692
    
    
    $
    7,091
    
    
    $
    24,736
    
    
    $
    24,397Income from operationsCraftmade
    
    $
    486
    
    
    $
    998
    
    
    $
    2,387
    
    
    $
    4,308TSI
    
    
    1,149
    
    
    
    415
    
    
    
    2,355
    
    
    
    3,791Total
    
    $
    1,634
    
    
    $
    1,413
    
    
    $
    4,742
    
    
    $
    8,099
 Changes in Assets of Segments
  Changes in Total Assets
 March 31,
    
    
    June 30,
    
    
    Increase/2008
    
    
    2007
    
    
    (Decrease)(Unaudited)Craftmade
    
    $
    63,196
    
    
    $
    41,049
    
    
    $
    22,147TSI
    
    
    37,944
    
    
    
    23,702
    
    
    
    14,241Total
    
    $
    101,140
    
    
    $
    64,751
    
    
    $
    36,389
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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note 5  STOCK-BASED COMPENSATION
   Stock-Based Compensation Expense
(Dollars in thousands)
 Three Months Ended
    
    Nine Months EndedMarch 31,
    
    March 31,
    
    March 31,
    
    March 31,2008
    
    2007
    
    2008
    
    2007Stock-based compensation expense recognized:Selling, general & administrative
    
    $
    30
    
    
    $
    26
    
    
    $
    86
    
    
    $
    36
  Future Stock-Based Compensation Expense
(Dollars in thousands)
 ExpectedFutureCompensationFiscal Year Ending
    
    CostJune 30, 2008 (remaining three months)
    
    $
    30June 30, 2009
    
    
    137June 30, 2010
    
    
    137June 30, 2011
    
    
    52June 30, 2012
    
    
    16
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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
  Stock Option Information
 WeightedAverageWeighted
    
    
    RemainingAverage
    
    
    ContractualNumber of
    
    
    Exercise
    
    
    LifeShares
    
    
    Price
    
    
    (Years)Outstanding at June 30, 2007
    
    
    99,100
    
    
    $
    18.06
    
    
    
    8.5Options granted
    
    
    75,500
    
    
    
    8.01
    
    
    
    9.8Options exercised
    
    
    
    
    
    
    
    
    
    
    Options forfeited
    
    
    (7,600
    )
    
    
    18.85
    
    
    
    Options expired
    
    
    
    
    
    
    
    
    
    
    Outstanding at March 31, 2008
    
    
    167,000
    
    
    $
    13.48
    
    
    
    9.5Exercisable at March 31, 2008
    
    
    3,500
    
    
    $
    6.00
    
    
    
    1.5
   Expected volatility
    
    
    33
    %Risk-free interest rate
    
    
    3.74
    %Expected lives
    
    4 yearsDividend yield
    
    
    6.0
    %
 14




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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note 6  INCOME TAXES
  Summary of Effective Tax Rate
 Three Months Ended
    
    
    Nine Months EndedMarch 31,
    
    
    March 31,
    
    
    March 31,
    
    
    March 31,2008
    
    
    2007
    
    
    2008
    
    
    2007Effective tax rate
    
    
    34.9
    %
    
    
    (19.2
    %)
    
    
    34.8
    %
    
    
    28.5
    %
     15




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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
  Reconciliation of Unrecognized Tax Benefits
(Dollars in thousands)
 Increases/(Decreases) in UnrecognizedTax Benefits As a Result ofTax Positions from
    
    
    
    
    
    
    Lapse inJuly 1,
    
    
    Prior
    
    
    Current
    
    
    
    
    
    
    Statute of
    
    
    March 31,2007
    
    
    Periods
    
    
    Period
    
    
    Settlements
    
    
    Limitations
    
    
    2008Unrecognized tax benefits
    
    $
    290
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    290
   Note 7   RELATED PARTY TRANSACTIONS
   Note 8  COMMITMENTS AND CONTINGENCIES
  16




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
 Disclosure Regarding Forward-looking Statements
  Critical Accounting Policies and Estimates
  Accounting for Uncertainty in Income Taxes.
 17




---



##### Table of Contents



Results of Operations
   Three Months Ended March 31, 2008 Compared to Three Months Ended March 31, 2007
  Summary Income Statement by Segment
(Dollars in thousands)
 Three Months Ended
    
    
    Three Months EndedMarch 31, 2008
    
    
    March 31, 2007Craftmade
    
    
    TSI
    
    
    Total
    
    
    Craftmade
    
    
    TSI
    
    
    TotalNet sales
    
    $
    23,146
    
    
    $
    31,772
    
    
    $
    54,918
    
    
    $
    13,714
    
    
    $
    8,778
    
    
    $
    22,492Cost of goods sold
    
    
    (16,818
    )
    
    
    (27,408
    )
    
    
    (44,226
    )
    
    
    (8,765
    )
    
    
    (6,636
    )
    
    
    (15,401
    )Gross profit
    
    
    6,328
    
    
    
    4,364
    
    
    
    10,692
    
    
    
    4,949
    
    
    
    2,142
    
    
    
    7,091As a % of net sales
    
    
    27.3
    %
    
    
    13.7
    %
    
    
    19.5
    %
    
    
    36.1
    %
    
    
    24.4
    %
    
    
    31.5
    %Selling, general and administrative
    
    
    (5,697
    )
    
    
    (3,151
    )
    
    
    (8,848
    )
    
    
    (3,823
    )
    
    
    (1,660
    )
    
    
    (5,483
    )As a % of net sales
    
    
    24.6
    %
    
    
    9.9
    %
    
    
    16.1
    %
    
    
    27.9
    %
    
    
    18.9
    %
    
    
    24.4
    %Depreciation and amortization
    
    
    (145
    )
    
    
    (66
    )
    
    
    (210
    )
    
    
    (130
    )
    
    
    (65
    )
    
    
    (195
    )Total operating expenses
    
    
    (5,842
    )
    
    
    (3,216
    )
    
    
    (9,058
    )
    
    
    (3,953
    )
    
    
    (1,725
    )
    
    
    (5,678
    )Income from operations
    
    $
    486
    
    
    $
    1,148
    
    
    
    1,633
    
    
    $
    996
    
    
    $
    417
    
    
    
    1,413Other income
    
    
    
    
    
    
    
    
    
    
    139
    
    
    
    
    
    
    
    
    
    
    
    Interest expense, net
    
    
    
    
    
    
    
    
    
    
    (524
    )
    
    
    
    
    
    
    
    
    
    
    (351
    )Other expenses
    
    
    
    
    
    
    
    
    
    
    (385
    )
    
    
    
    
    
    
    
    
    
    
    (351
    )Income before income taxes
and minority interest
    
    
    
    
    
    
    
    
    
    
    1,249
    
    
    
    
    
    
    
    
    
    
    
    1,062Income taxes (expense) / benefit
    
    
    
    
    
    
    
    
    
    
    (343
    )
    
    
    
    
    
    
    
    
    
    
    118Income before minority interest
    
    
    
    
    
    
    
    
    
    
    907
    
    
    
    
    
    
    
    
    
    
    
    1,180Minority interest
    
    
    
    
    
    
    
    
    
    
    (267
    )
    
    
    
    
    
    
    
    
    
    
    (447
    )Net income
    
    
    
    
    
    
    
    
    
    $
    639
    
    
    
    
    
    
    
    
    
    
    $
    733
 Net Sales.
 18




---



##### Table of Contents



Net Sales of Craftmade Segment
(Dollars in thousands)
 Fans
    
    
    WoodardLighting &
    
    
    Outdoor
    
    
    SegmentThree Months Ended
    
    Accessories
    
    
    Furniture
    
    
    TotalMarch 31, 2008
    
    $
    11,627
    
    
    $
    11,519
    
    
    $
    23,146March 31, 2007
    
    
    13,714
    
    
    
    
    
    
    
    13,714Dollar increase (decrease)
    
    $
    (2,087
    )
    
    $
    11,519
    
    
    $
    9,432Percent increase (decrease)
    
    
    (15.2
    %)
    
    
    100.0
    %
    
    
    68.8
    %
     Net Sales of TSI Segment
(Dollars in thousands)
 Trade
    
    
    Design
    
    
    
    
    
    
    SegmentThree Months Ended
    
    Source
    
    
    Trends
    
    
    Woodard
    
    
    TotalMarch 31, 2008
    
    $
    4,042
    
    
    $
    3,403
    
    
    $
    24,327
    
    
    $
    31,772March 31, 2007
    
    
    4,989
    
    
    
    3,789
    
    
    
    
    
    
    
    8,778Dollar increase (decrease)
    
    $
    (947
    )
    
    $
    (386
    )
    
    $
    24,327
    
    
    $
    22,994Percent increase (decrease)
    
    
    (19.0
    %)
    
    
    (10.2
    %)
    
    
    100.0
    %
    
    
    261.9
    %
  19




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##### Table of Contents



Gross Profit.
  Gross Profit as a Percentage of Net Sales of Craftmade Segment
 Fans
    
    
    WoodardLighting &
    
    
    Outdoor
    
    
    SegmentThree Months Ended
    
    Accessories
    
    
    Furniture
    
    
    TotalMarch 31, 2008
    
    
    33.1
    %
    
    
    21.5
    %
    
    
    27.3
    %March 31, 2007
    
    
    36.1
    %
    
    
    
    
    
    
    36.1
    %Percent decrease
    
    
    (3.0
    %)
    
    
    
    
    
    
    (8.7
    %)
 20




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##### Table of Contents



Gross Profit as a Percentage of Net Sales of TSI
 Trade
    
    
    Design
    
    
    
    
    
    
    SegmentThree Months Ended
    
    Source
    
    
    Trends
    
    
    Woodard
    
    
    TotalMarch 31, 2008
    
    
    23.4
    %
    
    
    26.2
    %
    
    
    10.4
    %
    
    
    13.7
    %March 31, 2007
    
    
    23.9
    %
    
    
    25.0
    %
    
    
    n/a
    
    
    
    24.4
    %Percent increase/(decrease)
    
    
    (0.5
    %)
    
    
    1.2
    %
    
    
    
    
    
    
    (10.7
    %)
   Selling, General and Administrative Expenses.
 Selling, General and Administrative Expenses
(Dollars in thousands)
 Increase/Three Months Ended
    
    
    (Decrease)March 31,
    
    
    March 31,
    
    
    Over Prior2008
    
    
    2007
    
    
    Year PeriodHistorical Craftmade
    
    $
    5,312
    
    
    $
    5,483
    
    
    $
    (171
    )Woodard Incremental
    
    
    3,537
    
    
    
    
    
    
    
    3,537$
    8,849
    
    
    $
    5,483
    
    
    $
    3,366
  21




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##### Table of Contents



Historical Craftmade
Selling, General and Administrative Expenses
(Dollars in thousands)
 Increase/Three Months Ended
    
    
    (Decrease)March 31,
    
    
    March 31,
    
    
    Over Prior2008
    
    
    2007
    
    
    Year PeriodCommissions
    
    $
    614
    
    
    $
    754
    
    
    $
    (139
    )Bad Debt Expense
    
    
    81
    
    
    
    (5
    )
    
    
    86Accounting, legal and consulting
    
    
    653
    
    
    
    618
    
    
    
    36Salaries and Wages
    
    
    1,820
    
    
    
    1,872
    
    
    
    (52
    )Rent
    
    
    58
    
    
    
    89
    
    
    
    (31
    )Other
    
    
    2,086
    
    
    
    2,157
    
    
    
    (71
    )$
    5,312
    
    
    $
    5,483
    
    
    $
    (171
    )
  Interest Expense.
 Other income.
 Minority interest.
 Provision for Income Taxes.
 22




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##### Table of Contents



Nine Months Ended March 31, 2008 Compared to Nine Months Ended March 31, 2007
  Summary Income Statement by Segment
(Dollars in thousands)
 Nine Months Ended
    
    
    Nine Months EndedMarch 31, 2008
    
    
    March 31, 2007Craftmade
    
    
    TSI
    
    
    Total
    
    
    Craftmade
    
    
    TSI
    
    
    TotalNet sales
    
    $
    49,726
    
    
    $
    48,742
    
    
    $
    98,468
    
    
    $
    43,942
    
    
    $
    33,239
    
    
    $
    77,181Cost of goods sold
    
    
    (33,903
    )
    
    
    (39,829
    )
    
    
    (73,732
    )
    
    
    (28,336
    )
    
    
    (24,448
    )
    
    
    (52,784
    )Gross profit
    
    
    15,823
    
    
    
    8,913
    
    
    
    24,736
    
    
    
    15,606
    
    
    
    8,791
    
    
    
    24,397As a % of net sales
    
    
    31.8
    %
    
    
    18.3
    %
    
    
    25.1
    %
    
    
    35.5
    %
    
    
    26.4
    %
    
    
    31.6
    %Selling, general and administrative
    
    
    (13,003
    )
    
    
    (6,363
    )
    
    
    (19,366
    )
    
    
    (10,888
    )
    
    
    (4,814
    )
    
    
    (15,702
    )As a % of net sales
    
    
    26.1
    %
    
    
    13.1
    %
    
    
    19.7
    %
    
    
    24.8
    %
    
    
    14.5
    %
    
    
    20.3
    %Depreciation and amortization
    
    
    (432
    )
    
    
    (196
    )
    
    
    (628
    )
    
    
    (409
    )
    
    
    (187
    )
    
    
    (596
    )Total operating expenses
    
    
    (13,435
    )
    
    
    (6,559
    )
    
    
    (19,994
    )
    
    
    (11,297
    )
    
    
    (5,001
    )
    
    
    (16,298
    )Income from operations
    
    $
    2,388
    
    
    $
    2,354
    
    
    
    4,742
    
    
    $
    4,309
    
    
    $
    3,790
    
    
    
    8,099Other income
    
    
    
    
    
    
    
    
    
    
    139
    
    
    
    
    
    
    
    
    
    
    
    Interest expense, net
    
    
    
    
    
    
    
    
    
    
    (1,144
    )
    
    
    
    
    
    
    
    
    
    
    (1,112
    )Other expenses
    
    
    
    
    
    
    
    
    
    
    (1,005
    )
    
    
    
    
    
    
    
    
    
    
    (1,112
    )Income before income taxesand minority interest
    
    
    
    
    
    
    
    
    
    
    3,737
    
    
    
    
    
    
    
    
    
    
    
    6,987Income taxes
    
    
    
    
    
    
    
    
    
    
    (929
    )
    
    
    
    
    
    
    
    
    
    
    (1,645
    )Income before minority interest
    
    
    
    
    
    
    
    
    
    
    2,809
    
    
    
    
    
    
    
    
    
    
    
    5,342Minority interest
    
    
    
    
    
    
    
    
    
    
    (1,069
    )
    
    
    
    
    
    
    
    
    
    
    (1,225
    )Net income
    
    
    
    
    
    
    
    
    
    $
    1,739
    
    
    
    
    
    
    
    
    
    
    $
    4,117
 23




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##### Table of Contents



Net Sales.
  Net Sales of Craftmade Segment
(Dollars in thousands)
 Fans
    
    
    WoodardLighting &
    
    
    Outdoor
    
    
    SegmentNine Months Ended
    
    Accessories
    
    
    Furniture
    
    
    TotalMarch 31, 2008
    
    $
    38,207
    
    
    $
    11,519
    
    
    $
    49,725March 31, 2007
    
    
    43,943
    
    
    
    
    
    
    
    43,943Dollar increase (decrease)
    
    $
    (5,736
    )
    
    $
    11,519
    
    
    $
    5,783Percent increase (decrease)
    
    
    (13.1
    %)
    
    
    100.0
    %
    
    
    13.2
    %
     Net Sales of TSI Segment
(Dollars in thousands)
 Trade
    
    
    Design
    
    
    
    
    
    
    SegmentNine Months Ended
    
    Source
    
    
    Trends
    
    
    Woodard
    
    
    TotalMarch 31, 2008
    
    $
    12,530
    
    
    $
    11,885
    
    
    $
    24,327
    
    
    $
    48,742March 31, 2007
    
    
    19,473
    
    
    
    13,766
    
    
    
    
    
    
    
    33,239Dollar increase (decrease)
    
    $
    (6,943
    )
    
    $
    (1,881
    )
    
    $
    24,327
    
    
    $
    15,503Percent increase (decrease)
    
    
    (35.7
    %)
    
    
    (13.7
    %)
    
    
    
    
    
    
    46.6
    %
 24




---



##### Table of Contents



Gross Profit.
  Gross Profit as a Percentage of Net Sales of Craftmade Segment
 Fans
    
    
    WoodardLighting &
    
    
    Outdoor
    
    
    SegmentNine Months Ended
    
    Accessories
    
    
    Furniture
    
    
    TotalMarch 31, 2008
    
    
    34.9
    %
    
    
    21.5
    %
    
    
    31.8
    %March 31, 2007
    
    
    35.5
    %
    
    
    
    
    
    
    35.5
    %Percent decrease
    
    
    (0.6
    %)
    
    
    
    
    
    
    (3.7
    %)
 25




---



##### Table of Contents



Gross Profit as a Percentage of Net Sales of TSI
 Trade
    
    
    Design
    
    
    
    
    
    
    SegmentNine Months Ended
    
    Source
    
    
    Trends
    
    
    Woodard
    
    
    TotalMarch 31, 2008
    
    
    23.7
    %
    
    
    28.8
    %
    
    
    10.4
    %
    
    
    18.3
    %March 31, 2007
    
    
    27.2
    %
    
    
    25.4
    %
    
    
    
    
    
    
    26.4
    %Percent increase/(decrease)
    
    
    (3.5
    %)
    
    
    3.4
    %
    
    
    
    
    
    
    (8.2
    %)
   Selling, General and Administrative Expenses.
 Selling, General and Administrative Expenses
(Dollars in thousands)
 Increase/Nine Months Ended
    
    
    (Decrease)March 31,
    
    
    March 31,
    
    
    Over Prior2008
    
    
    2007
    
    
    Year PeriodHistorical Craftmade
    
    $
    15,829
    
    
    $
    15,702
    
    
    $
    127Woodard Incremental
    
    
    3,537
    
    
    
    
    
    
    
    3,537$
    19,366
    
    
    $
    15,702
    
    
    $
    3,664
  26




---



##### Table of Contents



Historical Craftmade
Selling, General and Administrative Expenses
(Dollars in thousands)
 Increase/Nine Months Ended
    
    
    (Decrease)March 31,
    
    
    March 31,
    
    
    Over Prior2008
    
    
    2007
    
    
    Year PeriodCommissions
    
    $
    2,024
    
    
    $
    2,438
    
    
    $
    (414
    )Group Health Claims
    
    
    832
    
    
    
    579
    
    
    
    253Accounting, legal and consulting
    
    
    1,900
    
    
    
    1,684
    
    
    
    216Salaries and Wages
    
    
    5,440
    
    
    
    5,358
    
    
    
    82Other
    
    
    5,633
    
    
    
    5,643
    
    
    
    (10
    )$
    15,829
    
    
    $
    15,702
    
    
    $
    127
  Interest Expense.
 Other income.
 Minority interest.
 Provision for Income Taxes.
 Liquidity and Capital Resources
  27




---



##### Table of Contents



Recent Accounting Pronouncements
    28




---



##### Table of Contents



Long-Term Obligations
  Summary of Long-Term Obligations
At March 31, 2008
(Dollars in thousands)
 OutstandingCommitment
    
    
    Balance
    
    
    Interest Rate
    
    
    MaturityRevolving lines of credit
    
    $
    50,000
    
    
    $
    31,950
    
    
    LIBOR plus 1.5%
    
    December 31, 2009Note payable  facility
    
    
    
    
    
    
    10,890
    
    
    
    6.5%

    
    December 10, 2017Capital lease obligation
    
    
    
    
    
    
    123
    
    
    
    
    
    
    November 5, 2010Sub-total
    
    
    
    
    
    
    42,963Less: current amounts due
    
    
    
    
    
    
    (499
    )Long-term obligations
    
    
    
    
    
    $
    42,464
   29




---



##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4.
    
    Controls and Procedures
 Disclosure Controls and Procedures
  Changes in Internal Controls
  
 PART II
OTHER INFORMATION
 
 Item 1.
    
    Legal Proceedings
  30




---



##### Table of Contents



Item 1A.
    
    Risk Factors
  
 Item 2.
    
    Unregistered Sales of Equity 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
 ExhibitNumber
    
    Description2.1
    
    
    Asset Purchase Agreement dated as of December 18, 2007, by and among
Woodard, LLC, Henry Crown and Company d/b/a CC Industries, Inc. and Craftmade
International, Inc., previously filed as Exhibit 2.1 to Form 8-K on January 4, 2008
(File No. 000-26667), and incorporated by reference herein.Pursuant to Item 601(b)(2) of Regulation S-K, the Company has not filed
herewith the schedules and exhibits to the foregoing exhibit and agrees to
furnish supplementally to the Securities and Exchange Commission, upon request,
any omitted schedules or similar attachments to the foregoing exhibit.2.2
    
    
    Stock Purchase Agreement between Craftmade International, Inc., Trade
Source International, Inc., and Robert W. Lackey, dated September 15, 2006,
previously filed as Exhibit 10.1 to Form 8-K dated September 15, 2006 (File No.
000-26667), and incorporated by reference herein.Pursuant to Item 601(b)(2) of Regulation S-K, the Company has not filed
herewith the schedules and exhibits to the foregoing exhibit and agrees to
furnish supplementally to the Securities and Exchange Commission, upon request,
any omitted schedules or similar attachments to the foregoing exhibit.2.3
    
    
    Agreement for the Purchase and Sale of Personal Goodwill between Trade
Source International, Inc. and Robert Lackey, dated September 15, 2006, previously
filed as Exhibit 10.2 to Form 8-K dated September 15, 2006 (File No. 000-26667),
and incorporated by reference herein.2.4
    
    
    Agreement for the Purchase and Sale of Personal Goodwill between Trade
Source International, Inc. and Robert Lackey, Jr., dated September 15, 2006,
previously filed as Exhibit 10.3 to Form 8-K dated September 15, 2006 (File No.
000-26667), and incorporated by reference herein.
 31




---



##### Table of Contents



ExhibitNumber
    
    Description2.5
    
    
    Intellectual Property Assignment by and between Trade Source
International, Inc., Robert W. Lackey, Robert W. Lackey, Jr., RWL Incorporated f/k/a Robert W.
Lackey Corporation and R.L. Products Corporation, dated September 15, 2006,
previously filed as Exhibit 10.4 to Form 8-K dated September 15, 2006 (File No.
000-26667), and incorporated by reference herein.2.6
    
    
    Non-Competition Agreement between Trade Source International, Inc. and
Robert W. Lackey, dated September 15, 2006, previously filed as Exhibit 10.5 to
Form 8-K dated September 15, 2006 (File No. 000-26667), and incorporated by
reference herein.2.7
    
    
    Non-Competition Agreement between Trade Source International and Robert
W. Lackey, Jr., dated September 15, 2006, previously filed as Exhibit 10.6 to Form
8-K dated September 15, 2006 (File No. 000-26667), and incorporated by reference
herein.2.8
    
    
    Consulting Agreement by and between Craftmade International, Inc.,
Trade Source International, Inc. and Imagine One Resources, LLC, dated September
15, 2006, previously filed as Exhibit 10.7 to Form 8-K dated September 15, 2006
(File No. 000-26667), and incorporated by reference herein.2.9
    
    
    Partially Subordinate Security Agreement among Trade Source
International, Inc., Marketing Impressions, Inc., Prime Home Impressions, LLC, and
Robert Lackey, (Lackey), as collateral agent for Lackey, Robert W. Lackey, Jr.,
Imagine One Resources, LLC, RWL Corporation and R.L. Products Corporation, dated
September 15, 2006, previously filed as Exhibit 10.8 to Form 8-K dated September
15, 2006 (File No. 000-26667), and incorporated by reference herein.2.10
    
    
    Subordination Agreement by and among Robert W. Lackey (Lackey), as
collateral agent for Lackey, Robert W. Lackey, Jr., Imagine One Resources, LLC, RWL
Corporation, R.L. Products Corporation, and The Frost National Bank, Trade Source
International, Inc., Marketing Impressions, Inc., Prime/Home Impressions, LLC and
Craftmade International, Inc., dated September 15, 2006, previously filed as
Exhibit 10.9 to Form 8-K dated September 15, 2006 (File No. 000-26667), and
incorporated by reference herein.2.11
    
    
    Agreement and Plan of Merger by and among Craftmade International,
Inc., Bill Teiber Co., Inc., Teiber Lighting Products, Inc., Todd Teiber and Edward
Oberstein dated March 1, 2005, previously filed as Exhibit 10.1 to Form 8-K dated
March 1, 2005 (File No. 000-26667), and incorporated by reference herein.2.12
    
    
    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 Form 8-K
filed July 15, 1998 (File No. 33-33594-FW) and incorporated by reference herein.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-8 (File No. 33-33594-FW),
and incorporated by reference herein.
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##### Table of Contents



ExhibitNumber
    
    Description3.2
    
    
    Certificate of Amendment of Certificate of Incorporation of the
Company, dated March 24, 1992, and filed as Exhibit 4.2 to the Companys Form S-8
(File No. 333-44337), and incorporated by reference herein.3.3
    
    
    Amended and Restated Bylaws of the Company, filed as Exhibit 3(b)(2) to
the Companys Post Effective Amendment No. 1 to Form S-8 (File No. 33-33594-FW),
and incorporated by reference herein.4.1
    
    
    Specimen Common Stock Certificate, filed as Exhibit 4.4 to the
Companys registration statement on Form S-3 (File No. 333-70823), and incorporated
by reference herein.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 Exhibit 4 to Form 8-K dated July 9, 1999 (File No. 000-26667), and
incorporated by reference herein.10.1
    
    
    Promissory Note dated November 14, 2007, in the original principal
amount of $11,000,000 payable to the order of Allianz Life Insurance Company of
North America and executed by CM Real Estate, LLC., previously filed as Exhibit
10.1 to Form 8-K on November 20, 2007 (File No. 000-26667), and incorporated by
reference herein.10.2
    
    
    Deed of Trust, Mortgage and Security Agreement by CM Real Estate, LLC,
effective November 14, 2007, previously filed as Exhibit 10.2 to Form 8-K on
November 20, 2007 (File No. 000-26667), and incorporated by reference herein.10.3
    
    
    Guaranty Agreement dated November 14, 2007, by Craftmade International,
Inc. in favor of Allianz Life Insurance Company of North America, previously filed
as Exhibit 10.3 to Form 8-K on November 20, 2007 (File No. 000-26667), and
incorporated by reference herein.10.4
    
    
    Lease Agreement dated as of November 14, 2007, between CM Real Estate,
LLC and Craftmade International, Inc., previously filed as Exhibit 10.4 to Form 8-K
on November 20, 2007 (File No. 000-26667), and incorporated by reference herein.10.5
    
    
    Third Amended and Restated Loan Agreement Among Craftmade International,
Inc., the Frost National Bank, As Administrative Agent, and the Other Lenders Party
Hereto, dated December 31, 2007, previously filed as Exhibit 10.1 to Form 8-K on
January 7, 2008 (File No. 000-26667), and incorporated by reference herein.10.6
    
    
    Revolving Promissory Note Between Craftmade International, Inc., and
The Frost National Bank, dated December 31,2007, previously filed as Exhibit 10.2
to Form 8-K on January 7, 2008 (File No. 000-26667), and incorporated by reference
herein.10.7
    
    
    Revolving Promissory Note Between Craftmade International, Inc., and
Whitney National Bank, dated December 31, 2007, previously filed as Exhibit 10.3 to
Form 8-K on January 7, 2008 (File No. 000-26667), and incorporated by reference
herein.10.8
    
    
    Revolving Promissory Note Between Craftmade International, Inc., and
Commerce Bank, N.A., dated December 31, 2007, previously filed as Exhibit 10.4 to
Form 8-K on January 7, 2008 (File No. 000-26667), and incorporated by reference
herein.
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##### Table of Contents



ExhibitNumber
    
    Description10.9
    
    
    Craftmade International, Inc. 2006 Long-Term Incentive Plan, previously
filed as Exhibit 10.1 to Form 8-K dated November 28, 2006 (File No. 000-26667), and
incorporated by reference herein.10.10
    
    
    Incentive Stock Option Agreement, previously filed as Exhibit 10.2 to
Form 8-K dated November 28, 2006 (File No. 000-26667), and incorporated by
reference herein.10.11
    
    
    Non-qualified Stock Option Agreement, previously filed as Exhibit 10.3
to Form 8-K dated November 28, 2006 (File No. 000-26667), and incorporated by
reference herein.10.12
    
    
    Stock Appreciation Rights Agreement, previously filed as Exhibit 10.4
to Form 8-K dated November 28, 2006 (File No. 000-26667), and incorporated by
reference herein.10.13
    
    
    Restricted Stock Award Agreement, previously filed as Exhibit 10.5 to
Form 8-K dated November 28, 2006 (File No. 000-26667), and incorporated by
reference herein.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 J. Marcus Scrudder, Chief Financial Officer of the
Company, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1*
    
    
    Certification of James R. Ridings, Chairman of the Board, President
and Chief Executive Officer of the Company, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.32.2*
    
    
    Certification of J. Marcus Scrudder, Chief Financial Officer of the
Company, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Each document marked with an asterisk is filed or furnished
herewith. 34




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##### Table of Contents



SIGNATURES
  CRAFTMADE INTERNATIONAL, INC.
(Registrant)Date: May 8, 2008
    
    /s/ James R. RidingsJAMES R. RIDINGSChairman of the Board andChief Executive OfficerDate: May 8, 2008
    
    /s/ J. Marcus ScrudderJ. MARCUS SCRUDDERChief Financial Officer
 35