##### 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 September 30, 2007
 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
    
    75-2057054(State or other jurisdiction of
    
    (I.R.S. employerincorporation or organization)
    
    identification no.)
 650 SOUTH ROYAL LANE, SUITE 100
COPPELL, TEXAS 75019
 (972) 393-3800
 þ o
  o þ o
 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
 
  CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
 Three Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006Net sales
    
    $
    22,738
    
    
    $
    28,126Cost of goods sold
    
    
    (15,228
    )
    
    
    (19,344
    )Gross profit
    
    
    7,510
    
    
    
    8,782Gross profit as a percentage of net sales
    
    
    33.0
    %
    
    
    31.2
    %Selling, general and administrative expenses
    
    
    (5,541
    )
    
    
    (5,084
    )Depreciation and amortization
    
    
    (205
    )
    
    
    (200
    )Total operating expenses
    
    
    (5,746
    )
    
    
    (5,284
    )Income from operations
    
    
    1,764
    
    
    
    3,498Interest expense, net
    
    
    (322
    )
    
    
    (368
    )Income before income taxes and minority interests
    
    
    1,442
    
    
    
    3,130Income taxes
    
    
    (326
    )
    
    
    (981
    )Income before minority interests
    
    
    1,116
    
    
    
    2,149Minority interests
    
    
    (498
    )
    
    
    (265
    )Net income
    
    $
    618
    
    
    $
    1,884Weighted average common shares outstanding:Basic
    
    
    5,205
    
    
    
    5,204Diluted
    
    
    5,206
    
    
    
    5,215Basic earnings per common share
    
    $
    0.12
    
    
    $
    0.36Diluted earnings per common share
    
    $
    0.12
    
    
    $
    0.36Cash dividends declared per common share
    
    $
    0.12
    
    
    $
    0.12
 
 1




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##### Table of Contents



CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
 September 30,
    
    
    June 30,2007
    
    
    2007(Unaudited)ASSETSCurrent assetsCash
    
    $
    712
    
    
    $
    928Accounts receivable, net
    
    
    17,091
    
    
    
    18,082Inventories, net
    
    
    17,631
    
    
    
    18,076Income taxes receivable
    
    
    1,081
    
    
    
    1,376Deferred income taxes
    
    
    1,250
    
    
    
    1,251Prepaid expenses and other current assets
    
    
    1,452
    
    
    
    1,503Total current assets
    
    
    39,217
    
    
    
    41,216Property and equipment, net
    
    
    8,369
    
    
    
    8,379Goodwill
    
    
    13,791
    
    
    
    13,644Other intangibles, net
    
    
    1,453
    
    
    
    1,502Other assets
    
    
    9
    
    
    
    10Total non-current assets
    
    
    23,622
    
    
    
    23,535Total assets
    
    $
    62,839
    
    
    $
    64,751LIABILITIES, MINORITY INTERESTS AND STOCKHOLDERS EQUITYCurrent liabilitiesBook overdrafts
    
    $
    189
    
    
    $
    48Accounts payable
    
    
    5,470
    
    
    
    5,903Other accrued expenses
    
    
    2,241
    
    
    
    2,472Current portion of long-term obligations
    
    
    42
    
    
    
    264Total current liabilities
    
    
    7,942
    
    
    
    8,687Non-current liabilitiesLong-term obligations
    
    
    18,004
    
    
    
    18,938Deferred income taxes
    
    
    1,140
    
    
    
    1,107Other long-term liabilities
    
    
    190
    
    
    
    Total non-current liabilities
    
    
    19,334
    
    
    
    20,045Total liabilities
    
    
    27,276
    
    
    
    28,732Minority interests
    
    
    3,017
    
    
    
    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;
9,704,420 shares issued
    
    
    97
    
    
    
    97Additional paid-in capital
    
    
    17,859
    
    
    
    17,831Retained earnings
    
    
    52,716
    
    
    
    52,722Less: treasury stock, 4,499,920 common shares at cost
    
    
    (38,126
    )
    
    
    (38,126
    )Total stockholders equity
    
    
    32,546
    
    
    
    32,524Total liabilities, minority interests and stockholders equity
    
    $
    62,839
    
    
    $
    64,751
 
 2




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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 Three Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006Net cash provided by operating activities
    
    $
    2,738
    
    
    $
    1,207Cash flows from investing activitiesAcquisition of Marketing Impressions, Inc.
Initial payment and acquisition-related
costs, net of cash acquired
    
    
    
    
    
    
    (1,391
    )Additional contingent consideration
    
    
    (197
    )
    
    
    (375
    )Additions to property and equipment
    
    
    (140
    )
    
    
    (190
    )Cash used in investing activities
    
    
    (337
    )
    
    
    (1,956
    )Cash flows from financing activitiesIncrease/(decrease) in book overdrafts
    
    
    141
    
    
    
    (33
    )Distributions to minority interest members
    
    
    (975
    )
    
    
    (972
    )Net proceeds from/(payments) on lines of credit
    
    
    (923
    )
    
    
    1,244Cash dividends
    
    
    (624
    )
    
    
    (624
    )Principal payments on notes payable
    
    
    (223
    )
    
    
    (275
    )Principal payments on capital lease
    
    
    (13
    )
    
    
    Net cash used in financing activities
    
    
    (2,617
    )
    
    
    (660
    )Net decrease in cash
    
    
    (216
    )
    
    
    (1,409
    )Cash at beginning of period
    
    
    928
    
    
    
    2,164Cash at end of period
    
    $
    712
    
    
    $
    755
 
 3




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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
     4




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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
    Purchase Price Summary
(Dollars in thousands)
 As of September 30, 2007:Amount paid at closing, net of cash acquired
    
    $
    1,287Contingent payments earned
    
    
    1,844Acquisition-related costs
    
    
    220Total consideration as of September 30, 2007
    
    $
    3,351Percent of Adjusted Gross Profit
July 1, 2006 to August 31, 2011
    
    
    22
    %Additonal Percent of Adjusted Gross Profit
July 1, 2006 to June 30, 2007 (not to exceed $750)
    
    
    15
    %
  5




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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
    
    
    September 30,2007
    
    
    Payments
    
    
    2007Assets:Accounts receivable
    
    $
    368
    
    
    $
    
    
    
    $
    368Inventory
    
    
    2
    
    
    
    
    
    
    
    2Property and equipment
    
    
    214
    
    
    
    
    
    
    
    214Deferred tax assets
    
    
    70
    
    
    
    
    
    
    
    70Acquired intangibles
    
    
    1,530
    
    
    
    
    
    
    
    1,530Goodwill
    
    
    2,164
    
    
    
    147
    
    
    
    2,3114,348
    
    
    
    147
    
    
    
    4,495Liabilities:Accounts payable
    
    
    1,120
    
    
    
    
    
    
    
    1,120Note payable and other liabilities
    
    
    24
    
    
    
    
    
    
    
    241,144
    
    
    
    
    
    
    
    1,144Total purchase price
    
    $
    3,204
    
    
    $
    147
    
    
    $
    3,351
  6




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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
   Three Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006(In thousands,except per share data)Basic and diluted earnings per share:NumeratorNet income
    
    $
    618
    
    
    $
    1,884Denominator for basic EPSWeighted average common shares outstanding
    
    
    5,205
    
    
    
    5,204Denominator for diluted EPSWeighted average common shares outstanding
    
    
    5,205
    
    
    
    5,204Incremental shares for stock options
    
    
    1
    
    
    
    11Dilutive weighted average common shares
    
    
    5,206
    
    
    
    5,215Basic earnings per share
    
    $
    0.12
    
    
    $
    0.36Diluted earnings per share
    
    $
    0.12
    
    
    $
    0.36
  Summary of Anti-Dilutive Shares
(In thousands, except per share and fiscal year data)
 Anti-
    
    
    
    
    
    
    FiscalDilutive
    
    
    Range of
    
    
    Year ofThree Months Ended
    
    Shares
    
    
    Exercise Prices
    
    
    ExpirationSeptember 30, 2007
    
    
    94
    
    
    $
    17.48-$25.20
    
    
    
    2014 - 2018September 30, 2006
    
    
    9
    
    
    $
    17.48-$25.20
    
    
    
    2014 - 2016
 7




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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
     Summary of Segment Information
 Three Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006(In thousands)Net salesCraftmade
    
    $
    14,283
    
    
    $
    16,451TSI
    
    
    8,455
    
    
    
    11,675Total
    
    $
    22,738
    
    
    $
    28,126Gross profitCraftmade
    
    $
    5,007
    
    
    $
    5,752TSI
    
    
    2,503
    
    
    
    3,030Total
    
    $
    7,510
    
    
    $
    8,782Income from operationsCraftmade
    
    $
    906
    
    
    $
    1,975TSI
    
    
    858
    
    
    
    1,523Total
    
    $
    1,764
    
    
    $
    3,498
 8




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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
    Stock-Based Compensation Expense
(Dollars in thousands)
 Three Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006Stock-based compensation expense recognized:Selling, general & administrative
    
    $
    28
    
    
    $
    4
  Future Stock-Based Compensation Expense
(Dollars in thousands)
 ExpectedFutureCompensationFiscal Year Ending
    
    CostJune 30, 2008 (remaining nine months)
    
    $
    85June 30, 2009
    
    
    113June 30, 2010
    
    
    113June 30, 2011
    
    
    52
 9




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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
    
    
    
    8.8Options granted
    
    
    
    
    
    
    Options exercised
    
    
    
    
    
    
    Options forfeited
    
    
    
    
    
    
    Options expired
    
    
    
    
    
    
    Outstanding at September 30, 2007
    
    
    99,100
    
    
    $
    18.06
    
    
    
    8.5Exercisable at September 30, 2007
    
    
    18,500
    
    
    $
    16.26
    
    
    
    5.8
  10




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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
        11




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CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
    
 12




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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.
 13




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Results of Operations
  Three Months Ended September 30, 2007 Compared to Three Months Ended September 30, 2006
  Summary Income Statement by Segment(Dollars in thousands)Three Months Ended
    
    
    Three Months EndedSeptember 30, 2007




    
    
    September 30, 2006Craftmade
    
    
    TSI
    
    
    Total
    
    
    Craftmade
    
    
    TSI
    
    
    TotalNet sales
    
    $
    14,283
    
    
    $
    8,455
    
    
    $
    22,738
    
    
    $
    16,451
    
    
    $
    11,675
    
    
    $
    28,126Cost of goods sold
    
    
    (9,276
    )
    
    
    (5,952
    )
    
    
    (15,228
    )
    
    
    (10,699
    )
    
    
    (8,645
    )
    
    
    (19,344
    )Gross profit
    
    
    5,007
    
    
    
    2,503
    
    
    
    7,510
    
    
    
    5,752
    
    
    
    3,030
    
    
    
    8,782Gross profit as a % of net sales
    
    
    35.1
    %
    
    
    29.6
    %
    
    
    33.0
    %
    
    
    35.0
    %
    
    
    26.0
    %
    
    
    31.2
    %Selling, general and administrative
    
    
    (3,961
    )
    
    
    (1,580
    )
    
    
    (5,541
    )
    
    
    (3,638
    )
    
    
    (1,446
    )
    
    
    (5,084
    )As a % of net sales
    
    
    27.7
    %
    
    
    18.7
    %
    
    
    24.4
    %
    
    
    22.1
    %
    
    
    12.4
    %
    
    
    18.1
    %Depreciation and amortization
    
    
    (140
    )
    
    
    (65
    )
    
    
    (205
    )
    
    
    (139
    )
    
    
    (61
    )
    
    
    (200
    )Total operating expenses
    
    
    (4,101
    )
    
    
    (1,645
    )
    
    
    (5,746
    )
    
    
    (3,777
    )
    
    
    (1,507
    )
    
    
    (5,284
    )Income from operations
    
    $
    906
    
    
    $
    858
    
    
    
    1,764
    
    
    $
    1,975
    
    
    $
    1,523
    
    
    
    3,498Interest expense, net
    
    
    
    
    
    
    
    
    
    
    (322
    )
    
    
    
    
    
    
    
    
    
    
    (368
    )Income before income taxes
and minority interests
    
    
    
    
    
    
    
    
    
    
    1,442
    
    
    
    
    
    
    
    
    
    
    
    3,130Income taxes
    
    
    
    
    
    
    
    
    
    
    (326
    )
    
    
    
    
    
    
    
    
    
    
    (981
    )Income before minority interests
    
    
    
    
    
    
    
    
    
    
    1,116
    
    
    
    
    
    
    
    
    
    
    
    2,149Minority interests
    
    
    
    
    
    
    
    
    
    
    (498
    )
    
    
    
    
    
    
    
    
    
    
    (265
    )Net income
    
    
    
    
    
    
    
    
    
    $
    618
    
    
    
    
    
    
    
    
    
    
    $
    1,884
 Net Sales.
   14




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Net Sales of TSI Segment
(Dollars in thousands)
 Trade
    
    
    Design
    
    
    SegmentThree Months Ended
    
    Source
    
    
    Trends
    
    
    TotalSeptember 30, 2007
    
    $
    4,536
    
    
    $
    3,919
    
    
    $
    8,455September 30, 2006
    
    
    7,382
    
    
    
    4,293
    
    
    
    11,675Dollar decrease
    
    $
    (2,846
    )
    
    $
    (374
    )
    
    $
    (3,220
    )Percent decrease
    
    
    (38.6
    %)
    
    
    (8.7
    %)
    
    
    (27.6
    %)
     Gross Profit.
   15




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Gross Profit as a Percentage of Net Sales of TSI
 Trade
    
    Design
    
    SegmentThree Months Ended
    
    Source
    
    Trends
    
    TotalSeptember 30, 2007
    
    
    25.0
    %
    
    
    35.0
    %
    
    
    29.6
    %September 30, 2006
    
    
    28.4
    %
    
    
    21.8
    %
    
    
    26.0
    %Percent increase/(decrease)
    
    
    (3.4
    %)
    
    
    13.2
    %
    
    
    3.6
    %
   Selling, General and Administrative Expenses.
 Selling, General and Administrative Expenses
(Dollars in thousands)
 Increase/Three Months Ended
    
    
    (Decrease)September 30,
    
    
    September 30,
    
    
    Over Prior2007
    
    
    2006
    
    
    Year PeriodAccounting, legal and consulting
    
    $
    737
    
    
    $
    465
    
    
    $
    272Group health claims
    
    
    374
    
    
    
    170
    
    
    
    204Other
    
    
    4,430
    
    
    
    4,449
    
    
    
    (19
    )$
    5,541
    
    
    $
    5,084
    
    
    $
    457
   Interest Expense.
 16




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Minority Interests.
 Provision for Income Taxes.
 Liquidity and Capital Resources
       17




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Recent Accounting Pronouncements
   Long-Term Obligations
  Summary of Long-Term Obligations
At September 30, 2007
 OutstandingCommitment
    
    
    Balance
    
    
    Interest Rate
    
    
    MaturityRevolving line of credit
    
    $
    30,000,000
    
    
    $
    17,902,000
    
    
    LIBOR plus 1.5%
    
    September 1, 2009Capital lease obligation
    
    
    
    
    
    
    102,000
    
    
    
    
    
    
    November 5, 2010$
    18,004,000
    18




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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
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  19




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##### Table of Contents



Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
 ExhibitNumber
    
    Description2.1
    
    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.2.2
    
    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.2.3
    
    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.2.4
    
    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.2.5
    
    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.2.6
    
    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.
 20




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##### Table of Contents



ExhibitNumber
    
    Description2.7
    
    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.2.8
    
    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.2.9
    
    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.2.10
    
    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.2.11
    
    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.3.2
    
    Certificate of Amendment of Certificate of Incorporation of the
Company, dated March 24, 1992, and filed as Exhibit 4.2 to the Companys Form S-8
(File No. 333-44337), and incorporated by reference herein.3.3
    
    Amended and Restated Bylaws of the Company, filed as Exhibit 3(b)(2) to
the Companys Post Effective Amendment No. 1 to Form S-8 (File No. 33-33594-FW),
and incorporated by reference herein.4.1
    
    Specimen Common Stock Certificate, filed as Exhibit 4.4 to the
Companys registration statement on Form S-3 (File No. 333-70823), and incorporated
by reference herein.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.
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##### Table of Contents



ExhibitNumber
    
    Description10.1
    
    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 Exhibit 10.2 to Form 10-Q for the quarter
ended December 31, 1995, and incorporated by reference herein.10.2
    
    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 Exhibit 10.3 to Form 10-Q for the quarter ended
December 31, 1995, and incorporated by reference herein.10.3
    
    Second Amended and Restated Loan Agreement with Frost National Bank
dated September 18, 2006, previously filed as Exhibit 10.1 to Form 8-K dated
September 18, 2006 (File No. 000-26667), and incorporated by reference herein.10.4
    
    Revolving Promissory Note with Frost National Bank dated September 18,
2006, previously filed as Exhibit 10.2 to Form 8-K dated September 18, 2006 (File
No. 000-26667), and incorporated by reference herein.10.5
    
    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.10.6
    
    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.10.7
    
    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.10.8
    
    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.10.9
    
    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 302 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Each document marked with an asterisk is filed or furnished
herewith. 22




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##### Table of Contents



SIGNATURES
  CRAFTMADE INTERNATIONAL, INC.(Registrant)Date: November 7, 2007
    
    /s/ James R. RidingsJAMES R. RIDINGSChairman of the Board andChief Executive OfficerDate: November 7, 2007
    
    /s/ J. Marcus ScrudderJ. MARCUS SCRUDDERChief Financial Officer
 23