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

                                   FORM 10-Q/A

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2002 OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM          TO
                                           --------    --------
Commission File Number
----------------------
       000-26667

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

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


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


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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

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

5,962,058 shares of Common Stock were outstanding as of May 10, 2002.
<PAGE>
                 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES

                    Index to Quarterly Report on Form 10-Q/A



Part I.     Financial Information

            Introductory Note - Restatement

            The Company has changed the way it accounts for its two 50%-owned
            investees - Design Trends and Prime/Home Impressions - to account
            for these investees using the equity method of accounting rather
            than consolidation. Assets, liabilities, revenues and expense of
            these two investees are no longer included in the Company's balance
            sheets or statements of income. Instead, the balance sheets include
            the Company's investment in the investees and the income statements
            reflect, as a single line item, its equity share in the earnings of
            these investees. Net income, primary and diluted earnings per share
            and stockholders' equity did not change for any period restated.

            For purposes of this Form 10-Q/A, the Company has amended and
            restated in its entirety Part I of the Company's Form 10-Q for the
            quarterly period ended March 31, 2002. This Form 10-Q/A does not
            reflect events occurring after the filing of the original Form 10-Q,
            or modify or update those disclosures in any way, except as required
            to reflect the effects of this restatement.

            Item 1.     Financial Statements (unaudited)

                        Condensed Consolidated Statements of Income for the
                        three and nine months ended March 31, 2002 and 2001
                        (Restated).

                        Condensed Consolidated Balance Sheets as of March 31,
                        2002 and June 30, 2001 (Restated).

                        Condensed Consolidated Statements of Cash Flows for the
                        nine months ended March 31, 2002 and 2001 (Restated).

                        Notes to Condensed Consolidated Financial Statements
                        (Restated).


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


                                       2
<PAGE>
            Item 3.     Quantitative and Qualitative Disclosures About Market
                        Risk (Restated).


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


<TABLE>
<CAPTION>
                                                 FOR THE THREE MONTHS ENDED            FOR THE NINE MONTHS ENDED
                                               -----------------------------         -----------------------------
                                                 March              March              March              March
                                                31, 2002           31, 2001           31, 2002           31, 2001
                                                Restated           Restated           Restated           Restated
                                               ----------         ----------         ----------         ----------
                                                               (In thousands except per share data)
<S>                                            <C>                <C>                <C>                <C>
Net Sales                                      $   14,988         $   15,468         $   53,207         $   51,297
Cost of goods sold                                 10,094             10,511             36,524             35,123
                                               ----------         ----------         ----------         ----------

Gross profit                                        4,894              4,957             16,683             16,174
                                               ----------         ----------         ----------         ----------

Selling, general and
      administrative expenses                       3,768              3,560             11,267             10,468
Interest expense, net                                 159                458                705              1,428
Depreciation and amortization                         133                222                402                670
                                               ----------         ----------         ----------         ----------

           Total Expenses                           4,060              4,240             12,374             12,566
                                               ----------         ----------         ----------         ----------

Income before equity in earnings
      of 50% owned investees and
      income taxes                                    834                717              4,309              3,608

Equity in earnings of 50% owned
      investees before income taxes                   676                305              1,993              1,004
                                               ----------         ----------         ----------         ----------

Income before income taxes                          1,510              1,022              6,302              4,612

Provision for income taxes                            541                342              2,255              1,707
                                               ----------         ----------         ----------         ----------


Net income                                     $      969         $      680         $    4,047         $    2,905
                                               ==========         ==========         ==========         ==========

Basic earnings per common share                $     0.16         $     0.12         $     0.68         $     0.49
                                               ==========         ==========         ==========         ==========

Diluted earnings per common share              $     0.16         $     0.12         $     0.68         $     0.49
                                               ==========         ==========         ==========         ==========


Cash dividends declared
      per common share                         $     0.07         $     0.07         $     0.21         $     0.18
                                               ==========         ==========         ==========         ==========
</TABLE>


                       SEE ACCOMPANYING NOTES TO CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS










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


                                     ASSETS

<TABLE>
<CAPTION>
                                                  March 31               June 30,
                                                    2002                   2001
                                                  Restated               Restated
                                                 ----------             ----------
                                                 (Unaudited)

                                                          (In thousands)
<S>                                              <C>                    <C>
Current assets:
   Cash                                          $    4,093             $      723
   Accounts receivable - net of
         allowance of $150,000                       10,152                 13,308
   Receivables from 50% owned
         investees                                    1,241                  8,271
   Inventory                                         10,699                 12,650
   Deferred income taxes                                758                    758
   Prepaid expenses and other
         current assets                                 434                  1,158
                                                 ----------             ----------

    Total current assets                             27,377                 36,868


Property and equipment, net
   Land                                               1,535                  1,535
   Building                                           7,784                  7,784
   Office furniture and equipment                     3,613                  2,998
   Leasehold improvements                               253                    253
                                                 ----------             ----------
                                                     13,185                 12,570

Less:  accumulated depreciation                      (3,290)                (2,900)
                                                 ----------             ----------

    Total property and equipment, net                 9,895                  9,670

Goodwill, net of accumulated
   amortization of $1,204,000                         4,735                  4,735
Investment in 50% owned investees                     2,432                  1,049
Other assets                                             12                     39
                                                 ----------             ----------

    Total other assets                                7,179                  5,823
                                                 ----------             ----------


Total assets                                     $   44,451             $   52,361
                                                 ==========             ==========
</TABLE>


                       SEE ACCOMPANYING NOTES TO CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS


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

                      LIABILITIES AND STOCKHOLDERS' EQUITY


<TABLE>
<CAPTION>
                                                                                   March 31,              June 30,
                                                                                     2002                   2001
                                                                                   Restated               Restated
                                                                                  ----------             ----------
                                                                                  (Unaudited)

                                                                                            (In thousands)
<S>                                                                               <C>                    <C>
Current liabilities:
         Note payable - current                                                   $      680             $      512
         Revolving line of credit                                                     12,175                 18,800
         Accounts payable                                                              1,845                  4,124
         Commissions payable                                                             266                    301
         Income taxes payable                                                            125                    719
         Accrued liabilities                                                           2,198                  1,806
                                                                                  ----------             ----------
          Total current liabilities                                                   17,289                 26,262

Other non-current liabilities:
         Deferred income taxes                                                           241                    241
         Note payable - long term                                                      5,927                  8,104
                                                                                  ----------             ----------

         Total liabilities                                                            23,457                 34,607
                                                                                  ----------             ----------
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,9,388,535 and
                            9,326,535 shares issued, respectively                         94                     93
Additional paid-in capital                                                            13,100                 12,683
Unearned deferred compensation                                                           (84)                  (108)
Retained earnings                                                                     28,684                 25,886
                                                                                  ----------             ----------
                                                                                      41,826                 38,586
         Less:  treasury stock, 3,429,477
                            common shares at cost, and 32,000
                            preferred shares at cost                                 (20,832)               (20,832)
                                                                                  ----------             ----------
                             Total stockholders' equity                               20,994                 17,754
                                                                                  ----------             ----------

Total liabilities and stockholders' equity                                        $   44,451             $   52,361
                                                                                  ==========             ==========
</TABLE>

                       SEE ACCOMPANYING NOTES TO CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS


                                       5
<PAGE>
                 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                                    FOR THE NINE MONTHS ENDED
                                                                               ----------------------------------
                                                                                  March                  March
                                                                                 30, 2002               31, 2001
                                                                                 Restated               Restated
                                                                                ----------             ----------
                                                                               (In thousands except per share data)
<S>                                                                            <C>                     <C>
Net cash provided by operating
activities:                                                                         13,462             $    2,835
                                                                                ----------             ----------

Cash flows from investing activities:

                      Net additions to equipment                                      (627)                  (532)
                                                                                ----------             ----------
Net cash used for investing activities                                                (627)                  (532)
                                                                                ----------             ----------

Cash flows from financing activities:
                      Net proceeds from (payment to) lines of credit                (6,625)                   900
                      Principal payments on note payable                            (2,009)                  (353)
                      Stock repurchase                                                  --                 (2,559)
                      Stock options exercised                                          418                     --
                      Cash dividends                                                (1,249)                (1,043)
                                                                                ----------             ----------
Net cash used for financing activities                                              (9,465)                (3,055)
                                                                                ----------             ----------
Net increase in cash                                                                 3,370                   (752)
Cash at beginning of period                                                            723                  1,065
                                                                                ----------             ----------
Cash at end of period                                                           $    4,093             $      313
                                                                                ==========             ==========
</TABLE>


                       SEE ACCOMPANYING NOTES TO CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS


                                       6
<PAGE>
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                        OF CRAFTMADE INTERNATIONAL, INC.
                                AND SUBSIDIARIES

                                 MARCH 31, 2002
                                   (Unaudited)


Note 1 - BASIS OF PREPARATION AND PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission
and include all adjustments which are, in the opinion of management, necessary
for a fair presentation. The condensed consolidated financial statements include
the accounts of the Company and its wholly owned subsidiaries; 50% owned
investees are accounted for under 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, 2001, as amended. The financial data for the interim periods may not
necessarily be indicative of results to be expected for the year.

Certain amounts for the three and nine months ended March 31, 2002 have been
reclassified to conform with the current quarter and nine months' presentation.

Note 2 - RESTATEMENT

The Company has changed the way it accounts for its two 50%-owned investees -
Design Trends, LLC ("Design Trends") and Prime/Home Impressions, LLC ("PHI") -
to account for these investees using the equity method of accounting rather than
consolidation. Assets, liabilities, revenues and expense of these two investees
are no longer included in the Company's balance sheets or statements of income.
Instead, the balance sheets include the Company's investment in the investees,
and the income statements reflect, as a single line item, its equity share in
the earnings of these investees. Net income, primary and diluted earnings per
share and stockholders' equity did not change for any period restated.


                                       7
<PAGE>
The following table sets forth balances as originally reported and as restated
(in thousands, except per share amounts):

<TABLE>
<CAPTION>
                                   March 31,                                   June 30,
                                   2002                                        2001
                                   --------------------------------            --------------------------------
                                   As                                          As
                                   Previously            As                    Previously            As
                                   Reported              Restated              Reported              Restated
                                   ----------            ----------            ----------            ----------
<S>                                <C>                   <C>                   <C>                   <C>
Accounts receivable -
   net                             $   13,357            $   10,152            $   19,215            $   13,308
Receivables from 50%
   owned investees                         --            $    1,241                    --            $    8,271
Inventory                          $   13,908            $   10,699            $   19,454            $   12,650
Total current assets               $   33,193            $   27,377            $   42,214            $   36,868
Investment in 50% owned
   investees                               --            $    2,432                    --            $    1,049
Total assets                       $   50,650            $   44,451            $   59,129            $   52,361
Revolving lines of
   credit                          $   13,475            $   12,175            $   20,600            $   18,800
Total current
   liabilities                     $   21,056            $   17,289            $   31,981            $   26,262
Total liabilities                  $   27,224            $   23,457            $   40,326            $   34,607
Minority interest                  $    2,432                    --            $    1,049                    --
Stockholders' equity               $   20,994            $   20,994            $   17,754            $   17,754
</TABLE>


<TABLE>
<CAPTION>
                                   Three Months Ended                          Three Months Ended
                                   March 31, 2002                              March 31, 2001
                                   --------------------------------            --------------------------------
                                   As                                          As
                                   Previously            As                    Previously            As
                                   Reported              Restated              Reported              Restated
                                   ----------            ----------            ----------            ----------
<S>                                <C>                   <C>                   <C>                   <C>
Net sales                          $   22,134            $   14,988            $   19,658            $   15,468
Gross profit                       $    7,005            $    4,894            $    6,373            $    4,957
Equity in earnings of
 50% owned investees
 before income taxes                       --            $      676                    --            $      305
Net income                         $      969            $      969            $      680            $      680
Primary earning per
 share                             $     0.16            $     0.16            $     0.12            $     0.12
Diluted earnings per
 share                             $     0.16            $     0.16            $     0.12            $     0.12
</TABLE>

<TABLE>
<CAPTION>
                                   Nine Months Ended                           Nine Months Ended
                                   March 31, 2002                              March 31, 2001
                                   --------------------------------            --------------------------------
                                   As                                          As
                                   Previously            As                    Previously            As
                                   Reported              Restated              Reported              Restated
                                   ----------            ----------            ----------            ----------
<S>                                <C>                   <C>                   <C>                   <C>
Net sales                          $   76,937            $   53,207            $   62,674            $   51,297
Gross profit                       $   23,152            $   16,683            $   19,887            $   16,174
Equity in earnings of
 50% owned investees                       --            $    1,993                    --            $    1,004
Net income                         $    4,047            $    4,047            $    2,905            $    2,905

Primary earning per

 Share                             $     0.68            $     0.68            $     0.49            $     0.49
Diluted earnings per
 Share                             $     0.68            $     0.68            $     0.49            $     0.49
</TABLE>


                                       8
<PAGE>
Note 3 - INVESTMENT IN 50% OWNED INVESTEES

Combined summarized financial information for Design Trends and PHI is as
follows for the three and nine months ended (in thousands):

<TABLE>
<CAPTION>
                                                Three Months Ended
                                                March 31
                                                --------------------------------
                                                2002                  2001
                                                ----------            ----------
<S>                                             <C>                   <C>
Net sales                                       $    7,146            $    4,190
Gross profit                                    $    2,111            $    1,416
Income before income
  taxes                                         $    1,320            $      558
</TABLE>

<TABLE>
<CAPTION>
                                                Nine Months Ended
                                                March 31
                                                --------------------------------
                                                2002                  2001
                                                ----------            ----------
<S>                                             <C>                   <C>
Net sales                                       $   23,730            $   11,377
Gross profit                                    $    6,469            $    3,713
Income before income
  taxes                                         $    3,798            $    1,928
</TABLE>


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

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

                                 March 31, 2002
                                   (Unaudited)
                                 (In Thousands)


Note 4 - EARNINGS PER SHARE

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

<TABLE>
<CAPTION>
                         FOR THE THREE MONTHS ENDED          FOR THE NINE MONTHS ENDED
                        ----------------------------        ----------------------------
                           March             March             March             March
                         31, 2002          31, 2001          31, 2002          31, 2001
                        ----------        ----------        ----------        ----------
                                      (In thousands except per share data)
<S>                     <C>               <C>               <C>               <C>
Basic and
Diluted EPS

Numerator:
Net Income              $      969        $      680        $    4,047        $    2,905
                        ----------        ----------        ----------        ----------
Denominator:
Common
Shares
Outstanding                  5,957             5,887             5,930             5,949

Basic EPS               $     0.16        $     0.12        $     0.68        $     0.49
                        ==========        ==========        ==========        ==========

Denominator:
Common
Shares
Outstanding                  5,957             5,887             5,930             5,949
Options                         55                 4                62                 7
                        ----------        ----------        ----------        ----------
Total Shares                 6,012             5,891             5,992             5,956
                        ==========        ==========        ==========        ==========

Diluted EPS             $     0.16        $     0.12        $     0.68        $     0.49
                        ==========        ==========        ==========        ==========
</TABLE>




                                       9
<PAGE>
Note 5 - DERIVATIVE FINANCIAL INSTRUMENT

During the first quarter of fiscal 2000, the Company entered into an interest
rate swap agreement, with a maturity of December 29, 2003, to manage its
exposure to interest rate movements by effectively converting its long-term
facility debt from fixed to variable rates. The swap was designated as a fair
value hedge. In November 2001, the Company and its counterparty agreed to
terminate the swap agreement prior to its scheduled maturity. In return for the
early termination of the interest rate swap, the Company received $61,500 in
cash.

Note 6 - SEGMENT INFORMATION

The Company has two reportable segments, Craftmade and Trade Source
International, Inc. ("TSI"). The Company is organized on a combination of
product type and customer base. The Craftmade segment primarily derives its
revenue from home furnishings including ceiling fans, light kits, bathstrip
lighting and lamps offered primarily through lighting showrooms, certain major
retail chains and catalog houses. The TSI segment derives its revenue from
outdoor lighting, portable lamps, indoor lighting and fan accessories marketed
solely to mass merchandisers.

The accounting policies of the segments are the same as those described in Note
2 - Summary of Significant Accounting Policies to the Company's Annual Report on
Form 10-K for the fiscal year ended June 30, 2001, as amended. The Company
evaluates the performance of its segments and allocated resources to them based
on their operating profit and loss and cash flows.

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

<TABLE>
<CAPTION>
                                              Craftmade                TSI                   Total
                                             ----------            ----------             ----------
<S>                                          <C>                   <C>                    <C>
For the three months ended
 March 31, 2002: Restated

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

For the three months ended
 March 31, 2001: Restated

Net sales from external customers            $   11,026            $    4,442             $   15,468
Operating profit                                  1,363                  (188)                 1,175

For the nine months ended
 March 31, 2002: Restated

Net sales from external customers            $   36,351            $   16,856             $   53,207
Operating profit                                  5,208                  (194)                 5,014
                .
For the nine months ended
 March 31, 2001: Restated

Net sales from external customers            $   34,991            $   16,306             $   51,297
Operating profit                                  4,709                   327                  5,036
</TABLE>


Note 7 - GOODWILL AND OTHER INTANGIBLE ASSETS

Effective July 1, 2001, the Company adopted Statement on Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets ("SFAS 142"). SFAS 142
changes the accounting for goodwill from an amortization method to an
impairment-only approach. Amortization of goodwill and intangible assets with
indefinite lives, including such assets recorded in past business combinations,
ceased upon adoption. Thus, no amortization was recognized in the accompanying
consolidated statements of income for the three and nine months ended March 31,
2002 compared to $105,000, or $0.01 per share, net of taxes, and $315,000, or
$0.03 per share, net of taxes, for the same periods of the prior year,
respectively. On an annual basis, and when there is reason to suspect that their
values have been diminished or impaired, these assets must be tested for
impairment, and a write-down may be necessary. Other than the cessation of the
amortization of goodwill, the adoption of FAS 142 did not have any effect on the
Company's financial statements.

ITEM 2            MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
                  AND RESULTS OF OPERATIONS (RESTATED).

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 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 success of Design Trends' portable lamp
program, the relationship of Design Trends with its primary mass merchandiser


                                       10
<PAGE>
customer, changes in anticipated levels of sales and vendor programs, whether
due to future national or regional economic and competitive conditions, changes
in relationships with customers, TSI's and PHI's dependence on select mass
merchandisers, 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, declining conditions in the home construction
industry, inability to realize deferred tax assets, and other uncertainties, all
of which are difficult to predict and many of which are beyond the control of
the Company.

Critical Accounting Policies

The Company's management discussion and analysis of its financial condition and
results of operations following are based upon the Company's consolidated
financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these
financial statements requires the Company's management to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities. The
Company's estimates are based on historical experience and various other factors
that are believed to be reasonable under the circumstances, the results of which
form the basis for our conclusions. The Company continually evaluates the
information used to make these estimates as our business and the economic
environment changes. The Company's management believes that the estimates,
assumptions and judgments involved in the accounting policies described below
have the greatest potential impact on our financial statements, so the Company
considers these to be our critical accounting policies.

Revenue recognition

The Company recognizes revenue when title transfers and the risks and rewards of
ownership have passed to the customer, based on the terms of sale. Title
generally transfers upon shipment of goods from our warehouse. In some
instances, the Company ships product directly from our supplier to the customer.
In these cases, the Company recognizes revenue when the product is accepted by
the customer's representative. The Company does not have an obligation or policy
of replacing, at no cost, customer products damaged or lost in transit.

As part of our revenue recognition policy, the Company records estimated
incentives payable to our customers at a future date as a reduction of revenue
at the time the revenues are recorded. The Company bases its estimates on
contractual terms of the programs and estimated or actual sales to individual
customers. Actual incentives in any future period are inherently uncertain and,
thus, may differ


                                       11
<PAGE>
from our estimates. If actual or expected incentives were significantly greater
than the reserves the Company had established, the Company would record a
reduction to net revenues in the period in which the Company made such
determination.

Allowance for Doubtful Accounts

The Company maintains an allowance for trade accounts receivable for which
collection on specific customer accounts is doubtful. In determining
collectibility, the Company's management reviews available customer financial
statement information, credit rating reports as well as other external documents
and public filings. When it is deemed probable that a specific customer account
is uncollectible, that balance is included in the reserve calculation. Actual
results could differ from these estimates.

Inventory

Inventory is the Company's largest asset class. The Company's inventory is
primarily comprised of finished goods and is recorded at the lower of cost or
market using the average cost method. The Company provides estimated inventory
allowances for excess, slow-moving and obsolete inventory as well as inventory
whose carrying value is in excess of net realizable value. These reserves are
based on current assessments about future demands, market conditions and related
management initiatives. If market conditions and actual demands are less
favorable than those projected by management, additional inventory write-downs
may be required.

Results of Operations

Three Months Ended March 31, 2002 Compared to Three Months Ended March 31, 2001.

Net Sales. Net sales for the Company decreased $480,000, or 3.1%, to $14,988,000
for the three month period ended March 31, 2002 from $15,468,000 for the same
three-month period last year. Net sales from the Craftmade division increased
$349,000, or 3.2%, to $11,375,000 for the three months ended March 31, 2002 from
$11,026,000 for the same three-month period last year. The increase in sales of
the Craftmade division was primarily due to an increase in Craftmade's sales of
outdoor lighting which generated incremental revenue of $324,000 from the prior
year period. Net sales of the TSI division decreased $829,000, or 18.7%, to
$3,613,000 for the three months ended March 31, 2002 from $4,442,000 for the
same three-month period last year. The decrease was due in part to an increase
in sales credits provided to a mass retail customer to help clear slow moving
inventory. Sales comparisons were also impacted by the sale of certain products
such as ceiling fans sold to a mass retail customer in the prior year period


                                       12
<PAGE>
that did not occur in the three month period ended March 31, 2002.

Gross Profit. Gross profit of the Company as a percentage of sales increased to
32.7% of net sales for the three months ended March 31, 2002, compared to 32.0%
for the same period of 2001. The gross margin of the Craftmade division
increased to 40.8% of sales from 38.2% of sales in the year ago period. The
improvement in the gross margin of the Craftmade division was due primarily to a
series of price concessions the Company negotiated with its ceiling fan vendor,
which have, in part, been passed on to customers. The improvement in the
exchange rate of the U.S. dollar relative to the Taiwanese dollar also had a
favorable impact on the gross margin of the showroom division. The gross margin
of the TSI division decreased to 7.1% of sales for the three months ended March
31, 2002 compared to 16.8% of sales in the year ago period. An inventory write
down of $200,000 or approximately $0.02 per share net of taxes was taken during
the quarter to record discontinued items at their net realizable value.
Non-recurring sales credits totaling $263,000 or approximately $0.03 per share
net of taxes were provided to mass retail customers to help clear slow-moving
and discontinued items.

Selling, General and Administrative Expenses. Total selling, general and
administrative ("SG&A") expenses of the Company increased $208,000 to
$3,768,000, or 25.1% of net sales, for the three months ended March 31, 2002,
from $3,560,000 or 23.0% of net sales, for the same three month period last
year. Total SG&A expenses of the Craftmade division increased $279,000 to
$3,031,000, or 26.6% of net sales, compared to $2,752,000, or 25.0% of net
sales, for the same period in the previous period. The increase in SG&A expenses
of the Craftmade division was primarily related to costs associated with the
implementation of the Company's logistics and accounting systems upgrade. Total
SG&A expenses of the TSI division decreased $71,000 to $737,000, or 20.4% of net
sales, compared to $808,000, or 18.2% of net sales, for the same period in the
previous year. The increase in TSI's SG&A expenses as a percentage of sales was
primarily due to the decline in sales during the three month period ended March
31, 2002, which resulted in the de-leveraging of SG&A expenses compared to the
same period in the previous year.

Interest Expense. Net interest expense decreased $299,000 to $159,000 for the
three months ended March 31, 2001 from $458,000 for the same three-month period
last year. This improvement was primarily the result of a decrease in the
outstanding balance of the Company's revolving lines of credit, combined with
lower interest rates in effect during the period.

Equity in Earnings of 50% Owned Investees Before Income Taxes. Income from
investees, representing the Company's 50% ownership of PHI and Design Trends,
increased $371,000 to $676,000 from $305,000 for the


                                       13
<PAGE>
three months ended March 31, 2002 and 2001, respectively. The increase in income
from these investees was due to an increase in sales of Design Trends portable
lamp program which generated $3,175,000 in incremental revenue during the
period.

Provision For Income Taxes. The provision for income taxes increased to $541,000
or 35.8% of net income before taxes for the three months ended March 31, 2002,
from $342,000 or 33.5% for the same period of the prior year.

Nine Months Ended March 31, 2002 Compared to Nine Months Ended March 31, 2001

Net Sales. Net sales for the Company increased $1,910,000, or 3.7%, to
$53,207,000 for the nine month period ended March 31, 2002 from $51,297,000 for
the same nine-month period last year. Net sales of the Craftmade division
increased $1,360,000, or 3.9%, to $36,351,000 for the nine months ended March
31, 2002 from $34,991,000 for the same nine-month period last year. The increase
in sales of the Craftmade division was primarily due to an increase in sales of
outdoor lighting which generated incremental revenue of $965,000. Net sales of
the TSI division increased $550,000 or 3.4%, to $16,856,000 for the nine months
ended March 31, 2002 from $16,306,000 for the same nine-month period last year.

Gross Profit. Gross profit of the Company as a percentage of sales was
substantially unchanged at 31.4% of sales for the nine months ended March 31,
2002 compared to 31.5% for the same period of 2001. The gross margin of the
Craftmade division increased to 39.2% of sales from 37.5% of sales in the year
ago period. The improvement in the gross margin of the Craftmade division was
due primarily to a series of price concessions the Company negotiated with its
ceiling fan vendor, which have, in part, been passed on to customers. The
improvement in the exchange rate of the U.S. dollar relative to the Taiwanese
dollar also had a favorable impact on the gross margin of the showroom division.
This improvement was partially offset by a write down of certain bathstrip and
outdoor lighting inventory in the amount of $200,000, or $0.02 per share, net of
taxes. The gross margin of the TSI division declined to 14.5% of sales for the
nine months ended March 31, 2002 compared to 18.7% of sales in the year ago
period. The decline in the gross margin was partially related to the impact of
inventory write downs and sales credits issued to a mass retail customer in the
three months ending March 31, 2002, as previously discussed. In addition, an
inventory write down of $300,000 or approximately $0.03 per share net of taxes
was taken during the second quarter of fiscal 2002 to record discontinued items
at their net realizable value.


                                       14
<PAGE>
Selling, General and Administrative Expenses. Total SG&A expenses of the Company
increased $799,000 to $11,267,000, or 21.2% of net sales, for the nine months
ended March 31, 2002, from $10,468,000, or 20.4% of net sales, for the same nine
month period last year. Total SG&A expenses of the Craftmade division increased
$569,000, to $8,704,000 or 23.9% of net sales, compared to $8,135,000, or 23.2%
of net sales, for the same period in the previous year. The increase in SG&A
expenses of Craftmade was primarily attributable to costs associated with the
implementation of the company's logistics and accounting systems upgrade. Total
SG&A expenses of the TSI division increased $230,000 to $2,563,000, or 15.2% of
net sales from $2,333,000, or 14.3% of net 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 a an increase in the fixed portion of SG&A expenses.

Interest Expense. Net interest expense decreased $723,000 to $705,000 for the
nine months ended March 31, 2002 from $1,428,000 for the same nine-month period
last year. This improvement was primarily the result of a decrease in the
outstanding balance of the Company's revolving lines of credit, combined with
lower interest rates in effect during the period.

Equity in Earnings of 50% Owned Investees Before Income Taxes. Income from
investees, representing the Company's 50% ownership of PHI and Design Trends,
increased $989,000 to $1,993,000 from $1,004,000 for the nine months ended March
31, 2002 and 2001, respectively. The increase in income from these investees was
due to an increase in sales of Design Trends portable lamp program which
generated $13,636,000 in incremental revenue during the period.

Provision for Income Taxes. The provision for income taxes increased to
$2,255,000 or 35.8% of net income before taxes for the nine months ended March
31, 2002, from $1,707,000 or 37.0% for the same period of the prior year. The
decrease in the effective rate for the nine-month period is the result of the
elimination of amortization of nondeductible goodwill in 2002.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash increased $3,370,000 from $723,000 at June 30, 2001 to
$4,093,000 at March 31, 2002. The Company's operating activities provided cash
of $13,462,000 primarily attributable to the Company's net income from
operations, collections on customer accounts and reduced inventory levels.

The $627,000 of cash used for investing activities related primarily to
expenditures associated with the implementation of the Company's logistics and
accounting systems upgrade.


                                       15
<PAGE>
The $9,465,000 of cash used for financing activities was primarily the result of
(i) principal payments of $2,009,000 on the Company's note payable,(ii) cash
dividends of $1,249,000, and (iii) principal payments of $6,625,000 on the
Company's lines of credit. These amounts were partially offset by proceeds of
$418,000 received from stock options exercised.

On November 6, 2001, the Company entered into a Credit Agreement with The Frost
National Bank ("Frost"), pursuant to which Frost agreed to provide the Company
with a $20,000,000 line of credit. The Credit Agreement with Frost replaced the
Company's existing $20,000,000 line of credit with J.P. Morgan Chase & Co.
("Chase") and Frost. The terms of the Company's new line of credit with Frost
are substantially identical to the Company's preceding line of credit. The
Company chose to obtain its line of credit solely from Frost, rather than a
syndicate of Frost and Chase, because the Company currently maintains its
banking accounts with Frost, and the use of Frost exclusively will permit the
Company to facilitate more rapid payments with respect to the line of credit,
which the Company believes will result in a reduction of interest expense.

At March 31, 2002, subject to continued compliance with certain covenants and
restrictions, the Company had $20,000,000 available on its lines of credit, of
which $12,175,000 had been utilized. In addition, PHI had $3,000,000 available
on its line of credit at March 31, 2002, of which $1,300,000 had been utilized.
The Company's management believes that its current lines of credit, combined
with cash flows from operations, are adequate to fund the Company's and Design
Trends' current operating needs, make annual payments of approximately
$1,200,000 under the note payable, fund dividend payments of approximately
$420,000 per quarter, as well as fund its projected growth over the next twelve
months.

At March 31, 2002, $6,607,000 remained outstanding under the twelve-year 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.

With respect to the Company's 50%-owned investees, PHI had $3,000,000 available
on its line of credit at March 31, 2002, of which $1,300,000 had been utilized.
Design Trends utilizes the Company's lines of credits described above. In
addition, in order to satisfy anticipated demand for Design Trends' portable
lamp program, Design Trends maintains an inventory of approximately $2.2 million
as of March 31, 2002. Currently, this program is primarily with one mass
merchandiser customer. Should the terms of the program with this particular mass
merchandiser be at a level less than originally anticipated, Design Trends would
be required to find other customers for this inventory. There can be no
assurances that the alternative sources would generate


                                       16
<PAGE>
similar sales levels and profit margins as anticipated with the current
customer.

ITEM 3            QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
                  MARKET RISK (RESTATED).

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

As a result of the terms of the Company's note payable on its operating
facility, the Company is subject to market risk associated with adverse changes
in interest rates. In an effort to reduce this market risk, the Company entered
into an interest rate swap agreement (the "Swap Agreement") with Chase during
the first quarter of fiscal 2000, which was held by the Company for non-trading
purposes.

In November 2001, the Company transferred its line of credit from Chase to
Frost. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Liquidity and Capital Resources." In connection with
this transfer, the Company and Chase agreed to terminate the Swap Agreement, and
Chase paid the Company $61,500 in connection with this termination.

At March 31, 2002, the Company had a $20,000,000 line of credit (the "Craftmade
Line of Credit") with Frost at an interest rate of prime less .5%, of which
$12,175,000 was outstanding. At March 31, 2002 the prime rate was equal to
4.75%. The Craftmade Line of Credit is due on demand; however, if no demand is
made, it is scheduled to mature October 31, 2003.

In addition, at March 31, 2002, PHI had a $3,000,000 line of credit (the "PHI
Line of Credit") with Wachovia Bank, N.A. at an interest rate of the one-month
LIBOR plus 2%, of which $1,300,000 was outstanding.

At March 31, 2002, the one-month LIBOR rate was equal to 1.88%. The PHI Line of
Credit is due on demand; however, it no demand is made, it is scheduled to
mature April 16, 2003.

Because of the short-term nature of each of the Craftmade Line of Credit and the
PHI Line 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.


                                       17
<PAGE>
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 $122,000. Consequently, an increase in
the prime rate of five percentage points (5%) would result in an estimated
annualized increase of interest expense for the Company of approximately
$610,000.

Under the PHI Line of Credit, for each one-percentage point (1%) incremental
increase in LIBOR, the Company's annualized interest expense would increase by
approximately $13,000. Consequently, an increase in LIBOR of five percentage
points (5%) would result in an estimated annualized increase of interest expense
for the Company of approximately $65,000.

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 May 10, 2002, one U.S. dollar
equaled $34.52 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 March 31, 2002, the Company purchased
approximately $3,485,000 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 $349,000, based on the Company's purchases during the
fiscal quarter ended March 31, 2002 (on an annualized basis). A $5 incremental
appreciation of the Taiwanese dollar would result in an estimated annualized
increase in cost of goods sold of approximately $1,743,000, based on the
Company's purchases during the fiscal quarter ended March 31, 2002 (on an
annualized basis). A $10 incremental appreciation of the Taiwanese dollar would
result in an increase of approximately $3,485,000 on an annualized basis, based
on the Company's purchases during the fiscal quarter ended March 31, 2002 (on an
annualized basis). These amounts


                                       18
<PAGE>
are estimates of the financial impact of an appreciation of the Taiwanese dollar
relative to the U.S. dollar and are based on annualizations of the Company's
purchases from Fanthing for the fiscal quarter ended March 31, 2002.
Consequently, these amounts are not necessarily indicative of the effect of such
changes with respect to an entire year.


                                       19
<PAGE>
                                   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  September 26, 2002              /s/  James R. Ridings
    ----------------------------      ---------------------------------------
                                          JAMES R. RIDINGS
                                        President and Chief
                                          Executive Officer

Date  September 26, 2002              /s/  Kathleen B. Oher
    ----------------------------      --------------------------------------
                                        KATHLEEN B. OHER
                                        Chief Financial Officer


                                       20
<PAGE>
                                 Certifications
                             Pursuant to Section 302
                        of the Sarbanes-Oxley Act of 2002

I, James R. Ridings, certify that:

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

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

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

Date:  September 26, 2002                       /s/ James R. Ridings
                 ---                         -------------------------------
                                             James R. Ridings
                                             President and
                                             Chief Executive Officer

I, Kathleen B. Oher, certify that:

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

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

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

Date:  September 26, 2002                       /s/ Kathleen B. Oher
                 ---                         -------------------------------
                                             Kathleen B. Oher
                                             Chief Financial Officer


                                       21