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

                                    FORM 10-Q

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED DECEMBER 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      .
    -----        -----

5,475,158 shares of Common Stock were outstanding as of January 31, 2003.



<PAGE>

                 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES

                     Index to Quarterly Report on Form 10-Q


Part I. Financial Information

         Item 1. Financial Statements (unaudited).

                  Condensed Consolidated Statements of Income for the three and
                  six months ended December 31, 2002 and 2001.

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

                  Condensed Consolidated Statements of Cash Flows for the six
                  months ended December 31, 2002 and 2001.

                  Notes to Condensed Consolidated Financial Statements.

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

         Item 3. Quantitative and Qualitative Disclosures About Market Risk.

         Item 4. Controls and Procedures.

Part II. Other Information

         Item 1. Legal Proceedings

         Item 2. Changes in Securities and Use of Proceeds

         Item 3. Defaults Upon Senior Securities

         Item 4. Submission of Matters to a Vote of Stockholders

         Item 5. Other Information

         Item 6. Exhibits and Reports on Form 8-K




                                       2
<PAGE>

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


<Table>
<Caption>
                                                        FOR THE THREE MONTHS ENDED         FOR THE SIX MONTHS ENDED
                                                       -----------------------------     -----------------------------
                                                       December 31,     December 31,     December 31,     December 31,
                                                           2002             2001             2002             2001
                                                       ------------     ------------     ------------     ------------
                                                                    (In thousands except per share data)
<S>                                                    <C>              <C>              <C>              <C>

Net Sales                                              $     15,961     $     15,952     $     34,983     $     38,219
Cost of goods sold                                           10,754           10,810           23,695           26,432
                                                       ------------     ------------     ------------     ------------

Gross profit                                                  5,207            5,142           11,288           11,787
                                                       ------------     ------------     ------------     ------------

Selling, general and
     administrative expenses                                  3,542            3,740            7,366            7,499
Interest expense, net                                           217              234              412              547
Depreciation and amortization                                   160              134              311              267
                                                       ------------     ------------     ------------     ------------

       Total expenses                                         3,919            4,108            8,089            8,313
                                                       ------------     ------------     ------------     ------------

Income before equity in earnings of 50%
     owned investees and income taxes                         1,288            1,034            3,199            3,474

Equity in earnings of 50% owned investees
     before income taxes                                        868              711            2,421            1,317
                                                       ------------     ------------     ------------     ------------

Income before income taxes                                    2,156            1,745            5,620            4,791

Provision for income taxes                                      786              625            2,046            1,714
                                                       ------------     ------------     ------------     ------------

Net income                                             $      1,370     $      1,120     $      3,574     $      3,077
                                                       ============     ============     ============     ============

Basic earnings per common share                        $       0.25     $       0.19     $       0.63     $       0.52
                                                       ============     ============     ============     ============

Diluted earnings per common share                      $       0.25     $       0.19     $       0.63     $       0.51
                                                       ============     ============     ============     ============

Cash dividends declared
  per common share                                     $       0.07     $       0.07     $       0.14     $       0.14
                                                       ============     ============     ============     ============
</Table>

                      SEE ACCOMPANYING NOTES TO CONDENSED
                       CONSOLIDATED FINANCIAL STATEMENTS


                                       3
<PAGE>

                 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                                     ASSETS

<Table>
<Caption>
                                                       December 31,        June 30,
                                                           2002              2002
                                                       ------------      ------------
                                                       (Unaudited)
<S>                                                    <C>               <C>

                                                              (In thousands)
Current assets:
    Cash                                               $      2,455      $        624
    Accounts receivable - net of
         allowance of $150,000 and $150,000,                  9,148            15,077
         respectively
    Receivables from 50% owned investees                        373             2,227
    Inventory                                                10,225             8,570
    Deferred income taxes                                       588               588
    Prepaid expenses and other
         current assets                                         380               453
                                                       ------------      ------------

    Total current assets                                     23,169            27,539

Property and equipment, net
    Land                                                      1,535             1,535
    Building                                                  7,784             7,784
    Office furniture and equipment                            3,759             3,694
    Leasehold improvements                                      253               253
                                                       ------------      ------------
                                                             13,331            13,266

Less:  accumulated depreciation                              (3,771)           (3,460)
                                                       ------------      ------------

    Total property and equipment, net                         9,560             9,806

Goodwill, net of accumulated
    amortization of $1,204,000                                4,735             4,735
Deferred income tax                                             156               156
Investment in 50% owned investees                             3,825             2,244
Other assets                                                     12                12
                                                       ------------      ------------

    Total other assets                                        8,728             7,147
                                                       ------------      ------------

Total assets                                           $     41,457      $     44,492
                                                       ============      ============
</Table>

                       SEE ACCOMPANYING NOTES TO CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS


                                       4
<PAGE>

                 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

                      LIABILITIES AND STOCKHOLDERS' EQUITY

<Table>
<Caption>
                                                                 December 31,        June 30,
                                                                     2002              2002
                                                                 ------------      ------------
                                                                 (Unaudited)
<S>                                                              <C>               <C>

                                                                        (In thousands)
Current liabilities:
    Note payable - current                                       $        725      $        696
    Revolving lines of credit                                          11,050             9,034
    Accounts payable                                                    2,788             3,067
    Commissions payable                                                   187               274
    Income taxes payable                                                  829               567
    Accrued liabilities                                                 1,576             2,484
                                                                 ------------      ------------
    Total current liabilities                                          17,155            16,122

Non-current liabilities:
    Note payable - long term                                            5,376             5,746
                                                                 ------------      ------------

    Total liabilities                                                  22,531            21,868
                                                                 ------------      ------------
Stockholders' equity:
    Series A cumulative, convertible
         callable preferred stock, $1.00
         par value, 2,000,000 shares
         authorized; 32,000 shares issued                                  32                32
    Common stock, $.01 par value,
         15,000,000 shares authorized, 9,401,535 and
         9,390,535 shares issued, respectively                             94                94
Additional paid-in capital                                             13,335            13,261
Unearned deferred compensation                                            (60)              (76)
Retained earnings                                                      33,145            30,380
                                                                 ------------      ------------
                                                                       46,546            43,691
    Less:  treasury stock, 3,922,777 and
         3,446,477 common shares at cost,
         and 32,000 preferred shares at cost                          (27,620)          (21,067)
                                                                 ------------      ------------
         Total Stockholders' Equity                                    18,926            22,624
                                                                 ------------      ------------

Total liabilities and stockholders' equity                       $     41,457      $     44,492
                                                                 ============      ============
</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 SIX MONTHS ENDED
                                                                 ------------------------------
                                                                 December 31,      December 31,
                                                                     2002              2001
                                                                 ------------      ------------
                                                              (In thousands except per share data)
<S>                                                              <C>               <C>

Net cash provided by operating
activities:                                                      $      7,508      $     10,030
                                                                 ------------      ------------

Cash flows from investing activities:
      Net additions to equipment                                          (66)             (512)
                                                                 ------------      ------------
Net cash used for investing activities                                    (66)             (512)
                                                                 ------------      ------------

Cash flows from financing activities:
      Net proceeds from (payment to) lines of credit                    2,016            (6,800)
      Principal payments on note payable                                 (341)           (1,052)
      Stock repurchase                                                 (6,553)               --
      Stock options exercised                                              74               392
      Cash dividends                                                     (807)             (832)
                                                                 ------------      ------------
Net cash used for financing activities                                 (5,611)           (8,292)
                                                                 ------------      ------------
Net increase in cash                                                    1,831             1,226
Cash at beginning of period                                               624               723
                                                                 ------------      ------------
Cash at end of period                                            $      2,455      $      1,949
                                                                 ============      ============
</Table>

                       SEE ACCOMPANYING NOTES TO CONDENSED
                        CONSOLIDATED FINANCIAL STATEMENTS


                                       6
<PAGE>

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

                                DECEMBER 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
subsidiaries are accounted for using the equity method. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations. The Company believes that the
disclosures are adequate to make the information presented not misleading;
however, it is suggested that these financial statements be read in conjunction
with the financial statements and the notes thereto which are incorporated by
reference in the Company's Annual Report on Form 10-K, as amended, for the
fiscal year ended June 30, 2002. The financial data for the interim periods may
not necessarily be indicative of results to be expected for the year.









                                       7
<PAGE>

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

                                December 31, 2002
                                   (Unaudited)
                                 (In Thousands)


Note 2 - EARNINGS PER SHARE

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

<Table>
<Caption>
                            FOR THE THREE MONTHS ENDED         FOR THE SIX MONTHS ENDED
                           -----------------------------     -----------------------------
                             December         December         December         December
                             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                 $      1,370     $      1,120     $      3,574     $      3,077
                           ------------     ------------     ------------     ------------

Denominator:
Common
Shares
Outstanding                       5,516            5,931            5,656            5,917
                           ------------     ------------     ------------     ------------

Basic EPS                  $       0.25     $       0.19     $       0.63     $       0.52
                           ============     ============     ============     ============


Denominator:
Common
Shares
Outstanding                       5,516            5,931            5,656            5,917
Options                              58               58               60               65
                           ------------     ------------     ------------     ------------
Total Shares                      5,574            5,989            5,716            5,982
                           ============     ============     ============     ============

Diluted EPS                $       0.25     $       0.19     $       0.63     $       0.51
                           ============     ============     ============     ============
</Table>



                                       8
<PAGE>

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

                                December 31, 2002
                                   (Unaudited)
                                 (In Thousands)


Note 3 - INVESTMENT IN 50% OWNED INVESTEES

Combined summarized financial information for Design Trends and PHI at December
31, 2002 and 2001 and for the three and six months then ended is as follows:

<Table>
<Caption>
                                     FOR THE THREE MONTHS ENDED         FOR THE SIX MONTHS ENDED
                                   -----------------------------     -----------------------------
                                     December         December         December         December
                                     31, 2002         31, 2001         31, 2002         31, 2001
                                   ------------     ------------     ------------     ------------
<S>                                <C>              <C>              <C>              <C>

Net Sales                          $      8,975     $      7,093     $     20,130     $     16,585
Gross profit                              2,684            2,254            6,675            4,360
Income before income taxes                1,735            1,354            4,832            2,476
</Table>

<Table>
<Caption>
                                     December         December
                                     31, 2002         31, 2001
                                   ------------     ------------
<S>                                <C>              <C>

Accounts receivable - net                 3,918            3,178
Inventories                               3,896            4,662
Total current assets                      9,902            8,699
Total assets                             12,277           12,341
Revolving line of credit                    267            1,530
Note payable - current                      167               --
Total current liabilities                 6,693            9,669
Long term debt                              277               --
Total liabilities                         6,970            9,669
Total partner capital                     5,307            2,672
</Table>

The Company received distributions of $835,000 and $376,000 for the six months
ended December 31, 2002 and 2001 respectively, from these two 50% owned
investees.

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




                                       9
<PAGE>

Note 4 - TRANSACTIONS WITH 50% OWNED INVESTEES

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

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

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

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

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

<Table>
<Caption>
                                                Three Months Ending
                                            December 31,     December 31,
                                                2002             2001
                                            ------------     ------------
<S>                                         <C>              <C>

         Rent - Design Trends               $     60,000     $     60,000
         Payroll - Design Trends            $    251,000     $    229,000
         Interest - Design Trends                     --     $    136,000
         Administrative - PHI               $     90,000     $     90,000
</Table>

<Table>
<Caption>
                                                  Six Months Ending
                                            December 31,     December 31,
                                                2002             2001
                                            ------------     ------------
<S>                                         <C>              <C>

         Rent - Design Trends               $    120,000     $    120,000
         Payroll - Design Trends            $    494,000     $    444,000
         Interest - Design Trends           $     20,000     $    316,000
         Administrative - PHI               $    180,000     $    180,000
</Table>



                                       10
<PAGE>

Note 5 - SEGMENT INFORMATION

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

The accounting policies of the segments are the same as those described in Note
2 - Summary of Significant Accounting Policies to the Company's Annual Report on
Form 10-K for the fiscal year ended June 30, 2002. The Company evaluates the
performance of its segments and allocates resources to them based on their
operating profit and loss and cash flows.

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

<Table>
<Caption>
                                                        Craftmade              TSI               Total
                                                        ---------            -------            -------
<S>                                                     <C>                 <C>               <C>
For the three months ended
December 31, 2002
Net sales from external customers                         $10,962             $4,999            $15,961
Operating profit (loss)                                     1,517                (12)             1,505

For the three months ended
December 31, 2001
Net sales from external customers                         $11,549             $4,403            $15,952
Operating profit (loss)                                     1,656               (388)             1,268

For the six months ended
December 31, 2002
Net sales from external customers                         $24,423            $10,560            $34,983
Operating profit (loss)                                     3,847               (236)             3,611

For the six months ended
December 31, 2001
Net sales from external customers                         $24,976            $13,243            $38,219
Operating profit                                            3,709                312              4,021
</Table>



                                       11
<PAGE>

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

Cautionary Statement

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

Results of Operations

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

Net Sales. Net sales for the Company were relatively unchanged at $15,961,000
for the three month period ended December 31, 2002 compared to $15,952,000 for
the same three month period last year. Net sales from the Craftmade division
decreased $587,000, or 5.1%, to $10,962,000 for the three months ended December
31, 2002 from $11,549,000 for the same three month period last year. The
decrease in sales of the Craftmade division was primarily due to lower unit
sales and lower prices on certain discontinued models of fans that will be
replaced by new models introduced in the January lighting market.

Net sales of the TSI division increased $596,000, or 13.5%, to $4,999,000 for
the three months ended December 31, 2002 from $4,403,000 for the same
three-month period last year. The increase in sales of the TSI division was due
to an increase in direct shipment sales of outdoor lighting to a mass retail
customer.



                                       12
<PAGE>

Gross Profit. Gross profit of the Company as a percentage of sales increased to
32.6% of net sales for the three months ended December 31, 2002, compared to
32.2% for the same period of 2001. The gross margin of the Craftmade division
decreased to 38.6% of sales from 39.7% of net sales in the year ago period,
primarily due to lower prices on certain close out models, as discussed above.
The gross margin of the TSI division improved to 19.4% of sales for the three
months ended December 31, 2002 compared to 12.8% of sales in the year ago
period. The improvement in the TSI gross margin was due to a smaller write down
of slow moving inventory in the three-month period ended December 31, 2002
compared to the same period last year. The TSI division recorded an inventory
write down of $46,000 and $300,000 in the three-month period ended December 31,
2002 and December 31, 2001, respectively.

Selling, General and Administrative Expenses. Total selling, general and
administrative ("SG&A") expenses of the Company decreased $198,000 to $3,542,000
or 22.2% of net sales for the three months ended December 31, 2002 from
$3,740,000 or 23.4% of net sales for the same three month period last year.
Total SG&A expenses of the showroom division declined $236,000 to $2,578,000 or
23.5% of sales compared to $2,814,000 or 24.4% of sales for the same period in
the previous period. The decline in SG&A expenses of the Craftmade division in
dollars and as a percentage of sales was primarily due to expenses incurred in
connection with the company's logistics and accounting systems upgrade in the
three months ended December 31, 2001, which did not occur in the same period
this year. The decline in SG&A expenses of the showroom division was also
attributable to lower selling costs associated with the decline in sales during
the period. Total SG&A expenses of the TSI division increased $39,000 to
$965,000 or 19.3% of sales compared to $926,000 or 21.0% of sales for the same
period in the previous year. The improvement in TSI's SG&A expenses as a
percentage of sales was related to the effect of increased revenue leveraging
down fixed SG&A expenses.

Interest Expense. Net interest expense of the Company decreased $17,000 to
$217,000 for the three months ended December 31, 2002 from $234,000 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. Income from investees, representing
the Company's 50% ownership of Prime/Home Impressions, LLC ("PHI") and Design
Trends, LLC ("Design Trends") increased $157,000 to $868,000 from $711,000 for
the three months ended December 31, 2002 and 2001, respectively. The increase in
income



                                       13
<PAGE>

from investees was due to an increase in sales of Design Trends' portable lamp
program, which generated $1,780,000 in incremental revenue for Design Trends
during the period.

Provision For Income Taxes. The provision for income taxes increased $161,000 to
$786,000 or 36.5% of net income before taxes for the three months ended December
31, 2002, from $625,000 or 35.8% for the same period of the prior year.

Results of Operations

Six Months Ended December 31, 2002 Compared to Six Months Ended December 31,
2001

Net Sales. Net sales for the Company decreased $3,236,000, or 8.5%, to
$34,983,000 for the six month period ended December 31, 2002 from $38,219,000
for the same six-month period last year. Net sales of the Craftmade division
decreased $553,000, or 2.2%, to $24,423,000 for the six months ended December
31, 2002 from $24,976,000 for the same six-month period last year. The decline
in sales of the Craftmade division was primarily due to lower unit sales and
lower prices on certain discontinued models of fans, as discussed above. Net
sales of the TSI division declined $2,683,000, or 20.3%, to $10,560,000 for the
six months ended December 31, 2002 from $13,243,000 for the same six month
period last year. The decrease was primarily attributable to a first-quarter
decline in direct shipment sales of outdoor lighting to a mass retail customer.

Gross Profit. Gross profit of the Company as a percentage of sales increased to
32.3% of net sales for the six months ended December 31, 2002 compared to 30.8%
for the same period of 2001. The gross margin of the Craftmade division
increased to 39.6% of sales from 38.4% of sales in the year ago period. The
improvement in the gross margin of the Craftmade division was due primarily to
the first quarter improvement in the exchange rate of the U.S. dollar relative
to the Taiwanese dollar. The gross margin of the TSI division declined to 15.3%
of sales for the six months ended December 31, 2002 compared to 16.5% of sales
in the year ago period. The decline in the gross margin of TSI was due to a
larger write down of slow moving inventory in the six-month period ended
December 31, 2002 compared to the same period last year. The TSI division
recorded an inventory write down of $426,000 and $300,000 in the six-month
period ended December 31, 2002 and December 31, 2001, respectively.

Selling, General and Administrative Expenses. Total selling, general and
administrative ("SG&A") expenses of the Company decreased $133,000 to $7,366,000
or 21.1% of net sales for the six



                                       14
<PAGE>

months ended December 31, 2002 from $7,499,000 or 19.6% of net sales for the
same six-month period last year. Total SG&A expenses of the Craftmade division
decreased $120,000 to $5,552,000 or 22.7% of sales compared to $5,672,000 or
22.7% of sales for the same period in the previous period. The decline in SG&A
expense dollars of Craftmade is primarily attributable to lower selling costs
associated with the decline in sales of the Craftmade division. Total SG&A
expenses of the TSI division decreased $12,000 to $1,815,000 or 17.2% of sales
from $1,827,000 or 13.8% of sales for the same period in the previous year. The
increase in TSI's SG&A expenses as a percentage of sales was related to the
effect of the decline in revenue and the de-leveraging effect on fixed SG&A
expenses.

Interest Expense. Net interest expense of the Company decreased $135,000 to
$412,000 for the six-months ended December 31, 2002 from $547,000 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. Income from investees, representing
the Company's 50% ownership of Prime/Home Impressions, LLC ("PHI") and Design
Trends, LLC ("Design Trends") increased $1,104,000 to $2,421,000 from $1,317,000
for the six months ended December 31, 2002 and 2001, respectively. The increase
in income from investees was primarily due to an increase in sales of Design
Trends' portable lamp program, which generated $3,047,000 in incremental revenue
for Design Trends during the period.

Provision for Income Taxes. The provision for income taxes increased to
$2,046,000 or 36.4% of net income before taxes but after minority interest
expense, for the six months ended December 31, 2002, from $1,714,000 or 35.8%
for the same period of the prior year.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash increased $1,831,000 from $624,000 at June 30, 2002 to
$2,455,000 at December 31, 2002. The Company's operating activities provided
cash of $7,508,000 primarily attributable to the Company's net income from
operations and collections on customer accounts, partially offset by an increase
in the Company's inventory levels.

The $66,000 of cash used for investing activities related primarily to additions
to property and equipment associated with the implementation of the Company's
logistics and accounting systems upgrade.



                                       15
<PAGE>

Cash used for financing activities of $5,611,000 was primarily the result of (i)
the repurchase of 476,000 shares of the Company's common stock at an aggregate
cost of $6,553,000, (ii) principal payments of $341,000 on the Company's
facility note payable, and (iii) cash dividends of $807,000. These amounts were
partially offset by proceeds of $2,016,000 on the Company's line of credit and
$74,000 received from stock options exercised.

At December 31, 2002, subject to continued compliance with certain covenants and
restrictions, the Company had $20,000,000 available on its line of credit, of
which $11,050,000 had been utilized. The Company's management believes that its
current line of credit, combined with cash flows from operations, is adequate to
fund the Company's current operating needs, make annual payments of
approximately $1,200,000 under the Company's facility note payable, fund any
future dividend payments, as well as fund its projected growth over the next
twelve months.

At December 31, 2002, $6,101,000 remained outstanding under the note payable for
the Company's 378,000 square foot operating facility. The Company's management
believes that this facility will be sufficient for its purposes for the
foreseeable future. The facility note payable matures on January 1, 2008.

During the year ended June 30, 2002, the Company's Board of Directors authorized
the Company's management to repurchase up to 600,000 shares of the Company's
outstanding common stock. At June 30, 2002, the Company had repurchased 17,000
shares at an aggregate cost of $235,000. During the six month period ended
December 31, 2002, the Company repurchased 476,000 shares at an aggregate cost
of $6,553,000. As of January 29, 2003, 103,000 shares remained available for
repurchase under this program.

With respect to the Company's 50%-owned investees, PHI had $3,000,000 available
on its line of credit, of which $267,000 had been utilized at December 31, 2002.
Craftmade is a guarantor of this line of credit. Craftmade provides Design
Trends with loans to finance its working capital needs, drawing on the $20
million Line of Credit described above, as needed. To satisfy anticipated demand
for the portable lamp program, Design Trends maintained an inventory level of
$2,895,000 at December 31, 2002. This program is highly concentrated with one
mass merchandiser customer. Should the terms of the program with this particular
mass merchandiser be at a level less than originally anticipated the Company
would be required to find other customers for this inventory. There can be no
assurances that the Company would be able to obtain additional customers for
this inventory or that these alternative sources would generate similar sales
levels and profit margins as anticipated with the current mass merchandiser
customer.



                                       16
<PAGE>

ITEM 3   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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

At December 31, 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 $11,050,000 was outstanding. At December 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.

At December 31, 2002, PHI had a $3,000,000 line of credit with Wachovia Bank,
N.A. at an interest rate equal to the one-month LIBOR plus 2%, of which $267,000
was outstanding. At December 31, 2002, the one-month LIBOR rate was equal to
1.38%. The PHI Line of Credit is due on demand; however, if no demand is made,
it is scheduled to mature April 16, 2003. In addition, PHI had a $500,000
three-year note payable with Wachovia maturing on July 29, 2005, of which
$444,000 was outstanding at December 31, 2002. The note bears interest at a rate
equal to the Monthly LIBOR Index plus 2.5%. These two lines of credit of PHI are
referred to as the "PHI Lines of Credit."

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

Under the Craftmade Line of Credit, for each one-percentage point (1%)
incremental increase in the prime rate, the Company's annualized interest
expense would increase by approximately $110,500. 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
$553,000.

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



                                       17
<PAGE>

increase in LIBOR of five percentage points (5%) would result in an estimated
annualized increase in interest expense for the Company of approximately
$35,000.

The Company currently purchases a substantial amount of ceiling fans and other
products of its Craftmade division from Fanthing, a Taiwanese company. The
Company's verbal understanding with Fanthing provides that all transactions are
to be denominated in U.S. dollars; however, the understanding further provides
that, in the event that the value of the U.S. dollar appreciates or depreciates
against the Taiwanese dollar by one Taiwanese dollar or more, Fanthing's prices
will be accordingly adjusted by 2.5%. As of December 31, 2002, one U.S. dollar
equaled $34.70 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 and its 50% owned investees from
foreign vendors are denominated in U.S. dollars and are not subject to
adjustment provisions with respect to foreign currency fluctuations. As a
result, the Company does not believe that it is subject to any material foreign
currency exchange risk with respect to such purchases.

During the fiscal quarter ended December 31, 2002, the Company purchased
approximately $3,900,000 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 $390,000, based on the Company's purchases during the
fiscal quarter ended December 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 $1,950,000, based on
the Company's purchases during the fiscal quarter ended December 31, 2002 (on an
annualized basis). A $10 incremental appreciation of the Taiwanese dollar would
result in an increase of approximately $3,900,000 on an annualized basis, based
on the Company's purchases during the fiscal quarter ended December 31, 2002 (on
an annualized basis). These amounts are estimates of the financial impact of an
appreciation of the Taiwanese dollar relative to the U.S. dollar and are based
on annualizations of the Company's purchases from Fanthing for the fiscal
quarter ended December 31, 2002. Consequently, these amounts are not necessarily
indicative of the effect of such changes with respect to an entire year.




                                       18
<PAGE>

ITEM 4   CONTROLS AND PROCEDURES.

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

The Company made no significant changes in its internal controls or in other
factors that could significantly affect these controls subsequent to the date of
the evaluation of those controls by the chief executive officer and chief
financial officer.






                                       19
<PAGE>

                                     PART II

                                OTHER INFORMATION

Item 1.           Legal Proceedings

                  not applicable

Item 2.           Changes in Securities and Use of Proceeds

                  not applicable

Item 3.           Defaults Upon Senior Securities

                  not applicable

Item 4.           Submission of Matters to a Vote of Stockholders

At the annual meeting of the Company's stockholders on November 26, 2002, the
stockholders of the Company (i) elected James R. Ridings, Kathleen B. Oher,
Clifford Crimmings, Neall W. Humphrey, John DeBlois, A. Paul Knuckley, Jerry E.
Kimmel, Lary C. Snodgrass, R. Don Morris, L. Dale Griggs and William E. Bucek as
directors of the Company; and (ii) ratified the appointment of
PricewaterhouseCoopers LLP as independent auditors for 2003.

The vote in the election of directors was as follows:

<Table>
<Caption>
                           Number of Votes     Number of Votes       Abstentions
                           Of Common Stock     of Common Stock           and
                                 For              Withheld         Broker Non-Votes
                           ---------------     ---------------     ----------------
<S>                        <C>                 <C>                 <C>
James Ridings                    4,115,392             271,856                  --
Kathleen B. Oher                 4,118,092             269,156                  --
Clifford Crimmings               4 116,492             270,756                  --
Neall W. Humphrey                4,115,192             272,056                  --
John DeBlois                     4,118,192             269,056                  --
A. Paul Knuckley                 4,357,747              29,501                  --
Jerry E. Kimmel                  4,357,447              29,801                  --
Lary C. Snodgrass                4,358,497              28,351                  --
R. Don Morris                    4,356,522              30,726                  --
L. Dale Griggs                   4,359,922              27,326                  --
William E. Bucek                 4,358,522              28,726                  --
</Table>

The vote in the ratification of PricewaterhouseCoopers LLP as independent
auditors for the fiscal year ending June 30, 2003 was 4,375,751 for, 1,151
against, and 10,346 abstentions and broker non-votes.




                                       20
<PAGE>

Item 5.           Other Information

                  not applicable

Item 6.           Exhibits and Reports on Form 8-K

                  a).      Exhibits

                  3.1      Certificate of Incorporation of the Company, filed as
                           Exhibit 3(a)(2) to the Company's Post Effective
                           Amendment No. 1 to Form S-18 (File No. 33-33594-FW)
                           and incorporated by reference herein.

                  3.2      Certificate of Amendment of Certificate of
                           Incorporation of the Company, dated March 24, 1992
                           and filed as Exhibit 4.2 to the Company's Form S-8
                           (File No. 333-44337) and incorporated by reference
                           herein.

                  3.3      Amended and Restated Bylaws of the Company, filed as
                           Exhibit 3(b)(2) to the Company's Post Effective
                           Amendment No. 1 to Form S-8 (File No. 33-33594-FW)
                           and incorporated by reference herein.

                  4.1      Specimen Common Stock Certificate, filed as Exhibit
                           4.4 to the Company's Registration Statement on Form
                           S-3 (File No. 333-70823) and incorporated by
                           reference herein.

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

                  10.1     Earnest Money contract and Design/Build Agreement
                           dated May 8, 1995, between MEPC Quorum Properties II,
                           Inc. and Craftmade International, Inc. (including
                           exhibits), previously filed as an exhibit in Form
                           10-Q for the quarter ended December 31, 1995, and
                           herein incorporated by reference.



                                       21
<PAGE>

                  10.2     Assignment of Rents and Leases dated December 21,
                           1995, between Craftmade International, Inc. and
                           Allianz Life Insurance Company of North America
                           (including exhibits), previously filed as an exhibit
                           in Form 10-Q for the quarter ended December 31, 1995,
                           and herein incorporated by reference.

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

                  10.4     Second Amended and Restated Credit Agreement dated
                           November 14, 1995, among Craftmade International,
                           Inc., Nations Bank of Texas, N.A., as Agent and the
                           Lenders defined therein (including exhibits),
                           previously filed as an exhibit in Form 10-Q for the
                           quarter ended December 31, 1995, and herein
                           incorporated by reference.

                  10.5     Lease Agreement dated November 30, 1995, between
                           Craftmade International, Inc. and TSI Prime, Inc.,
                           previously filed as an exhibit in Form 10-Q for the
                           quarter ended December 31, 1995, and herein
                           incorporated by reference.

                  10.6     Revolving credit facility with Texas Commerce Bank,
                           previously filed as an exhibit in Form 10-K for the
                           year ended June 30, 1996, and herein incorporated by
                           reference.

                  10.7     Agreement and Plan of Merger, dated as of July 1,
                           1998, by and among Craftmade International, Inc.,
                           Trade Source International, Inc., a Delaware
                           corporation, Neall and Leslie Humphrey, John DeBlois,
                           the Wiley Family Trust, James Bezzerides, the Bezzco
                           Inc. Employee Retirement Trust and Trade Source
                           International, Inc., a California corporation, filed
                           as Exhibit 2.1



                                       22
<PAGE>

                           to the Company's Current Report on Form 8-K filed
                           July 15, 1998 (File No. 33-33594-FW) and herein
                           incorporated by reference.

                  10.8     Voting Agreement, dated July 1, 1998, by and among
                           James R. Ridings, Neall Humphrey and John DeBlois,
                           filed as Exhibit 2.1 to the Company's Current Report
                           on Form 8-K filed July 15, 1998 (File No.
                           33-33594-FW) and herein incorporated by reference.

                  10.9     Third Amendment to Credit Agreement, dated July 1,
                           1998, by and among Craftmade International, Inc., a
                           Delaware corporation, Trade Source International,
                           Inc., a Delaware corporation, Chase Bank of Texas,
                           National Association (formerly named Texas Commerce
                           Bank, National Association) and Frost National Bank
                           (formerly named Overton Bank and Trust), filed as
                           Exhibit 2.1 to the Company's Current Report on Form
                           8-K filed July 15, 1998 (File No. 33-33594-FW) and
                           herein incorporated by reference.

                  10.10    Consent to Merger by Chase Bank of Texas, National
                           Association and Frost National Bank, filed as Exhibit
                           2.1 to the Company's Current Report on Form 8-K filed
                           July 15, 1998 (File No. 33-33594-FW) and herein
                           incorporated by reference.

                  10.11    Employment Agreement, dated July 1, 1998, by and
                           among Craftmade International, Inc., Trade Source
                           International, Inc., a Delaware corporation and Neall
                           Humphrey, filed as Exhibit 2.1 to the Company's
                           Current Report on Form 8-K filed July 15, 1998 (File
                           No. 33-33594-FW) and herein incorporated by
                           reference.

                  10.12    Employment Agreement, dated July 1, 1998, by and
                           among Craftmade International, Inc., Trade Source
                           International, Inc., a Delaware corporation, and
                           Leslie Humphrey, filed as Exhibit 2.1 to the
                           Company's Current Report on Form 8-K filed July 15,
                           1998 (File No. 33-33594-FW) and herein incorporated
                           by reference.



                                       23
<PAGE>

                  10.13    Employment Agreement, dated July 1, 1998, by and
                           among Craftmade International, Inc., Trade Source
                           International, Inc., a Delaware corporation and John
                           DeBlois, filed as Exhibit 2.1 to the Company's
                           Current Report on Form 8-K filed July 15, 1998 (File
                           No. 33-33594-FW) and herein incorporated by
                           reference.

                  10.14    Fourth Amendment to Credit Agreement, dated April 2,
                           1999, by and among Craftmade International, Inc., a
                           Delaware corporation, Durocraft International, Inc.,
                           a Texas Corporation, Trade Source International,
                           Inc., a Delaware Corporation, Chase Bank of Texas,
                           National Association and Frost National Bank, filed
                           as Exhibit 10.17 to the Company's Quarterly Report on
                           Form 10-Q filed May 15, 2000 (File No. 000-26667) and
                           herein incorporated by reference.

                  10.15    Letter Agreement Concerning Fifth Amendment to Credit
                           Agreement, dated August 11, 1999, from Chase Bank of
                           Texas, N.A. and Frost National Bank to Craftmade
                           International, Inc., Durocraft International, Inc.,
                           Trade Source International, Inc., and C/D/R
                           Incorporated, filed as Exhibit 10.18 to the Company's
                           Quarterly Report on Form 10-Q filed May 15, 2000
                           (File No. 000-26667) and herein incorporated by
                           reference.

                  10.16    Sixth Amendment to Credit Agreement, dated November
                           12, 1999, by and among Craftmade International, Inc.,
                           a Delaware corporation. Durocraft International,
                           Inc., a Texas Corporation, Trade Source
                           International, Inc., a Delaware Corporation, C/D/R
                           Incorporated, a Delaware corporation, Chase Bank of
                           Texas, National Association and Frost National Bank,
                           filed as Exhibit 10.19 to the Company's Quarterly
                           Report on Form 10-Q filed May 15, 2000 (File No.
                           000-26667) and herein incorporated by reference.

                  10.17    Employment Agreement dated October 25, 1999, between
                           Kathy Oher and Craftmade International, Inc., filed
                           as Exhibit 10.20 to the Company's Annual Report on
                           Form 10-K



                                       24
<PAGE>

                           filed September 26, 2000 (File No. 000-26667) and
                           herein incorporated by reference.

                  10.18    Seventh Amendment to Credit Agreement dated May 12,
                           2000, by and among Craftmade International, Inc., a
                           Delaware corporation, Durocraft International, Inc.,
                           a Texas corporation, Trade Source International,
                           Inc., a Delaware corporation, C/D/R Incorporated, a
                           Delaware corporation, Chase Bank of Texas, National
                           Association and Frost National Bank, filed as Exhibit
                           10.21 to the Company's Annual Report on Form 10-K
                           filed September 26, 2000 (File No. 000-26667) and
                           herein incorporated by reference.

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

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

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

                  10.22    Ninth Amendment to Credit Agreement dated June 29,
                           2001, by and among Craftmade International, Inc. a
                           Delaware corporation, Durocraft International, Inc.,
                           a Texas corporation, Trade Source International,
                           Inc., a Delaware corporation, Design Trends,



                                       25
<PAGE>

                           LLC, a Delaware limited liability company, C/D/R
                           Incorporated, a Delaware corporation, The Chase
                           Manhattan Bank and The Frost National Bank, filed as
                           Exhibit 10.25 to the Company's Annual Report on Form
                           10-K filed September 26, 2001 (File No. 000-26667)
                           and herein incorporated by reference.

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

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

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

                  10.26    Note and Security Agreement dated April 29, 2002, by
                           Prime/Home Impressions LLC, a North Carolina limited
                           liability company, to Wachovia Bank, N.A., with
                           Security Agreement of Prime/Home Impressions, LLC,
                           Guaranty Agreement of Craftmade International, Inc.,
                           and Guaranty Agreement of Trade Source International,
                           Inc., filed as Exhibit 10.26 to the Company's
                           Quarterly Report on Form 10-Q



                                       26
<PAGE>

                           filed November 14, 2002 (File No. 000-26667) and
                           herein incorporated by reference.

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

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

         b).      Reports on Form 8-K

         On November 14, 2002, the Company filed a Form 8-K concerning
certifications of the Company's Chief Executive Officer and Chief Financial
Officer with respect to the filing of its Form 10-Q for the quarter ended
September 30, 2002.

         On October 3, 2002, the Company filed a Form 8-K concerning
certifications of the Company's Chief Executive Officer and Chief Financial
Officer with respect to the filing of its Form 10-K for the fiscal year ended
June 30, 2002.




                                       27
<PAGE>

                                    SIGNATURE

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                    CRAFTMADE INTERNATIONAL, INC.
                                            (Registrant)



Date February 13, 2003                       /s/ James R. Ridings
     -----------------------------           -----------------------------------
                                                    JAMES R. RIDINGS
                                                   President and Chief
                                                    Executive Officer

Date February 13, 2003                       /s/ Kathleen B. Oher
     -----------------------------           -----------------------------------
                                                     KATHLEEN B. OHER
                                                 Chief Financial Officer




                                       28
<PAGE>

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


I, James R. Ridings, certify that:

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

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

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

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

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

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

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

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



                                       29
<PAGE>

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

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

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


Date: February 13, 2003                      /s/ James R. Ridings
                                             -----------------------------------
                                             James R. Ridings
                                             President and
                                             Chief Executive Officer





                                       30
<PAGE>

I, Kathleen B. Oher, certify that:

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

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

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

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

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

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

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

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



                                       31
<PAGE>

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

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

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


Date: February 13, 2003                               /s/ Kathleen B. Oher
                                                      --------------------------
                                                      Kathleen B. Oher
                                                      Chief Financial Officer




                                       32
<PAGE>

                                Index to Exhibits

<Table>
<Caption>
Exhibit
Number                              Description
-------                             -----------
<S>               <C>

3.1               Certificate of Incorporation of the Company, filed as Exhibit
                  3(a)(2) to the Company's Post Effective Amendment No. 1 to
                  Form S-18 (File No. 33-33594-FW) and incorporated by reference
                  herein.

3.2               Certificate of Amendment of Certificate of Incorporation of
                  the Company, dated March 24, 1992 and filed as Exhibit 4.2 to
                  the Company's Form S-8 (File No. 333-44337) and incorporated
                  by reference herein.

3.3               Amended and Restated Bylaws of the Company, filed as Exhibit
                  3(b)(2) to the Company's Post Effective Amendment No. 1 to
                  Form S-18 (File No. 33-33594-FW) and incorporated by reference
                  herein.

4.1               Specimen Common Stock Certificate, filed as Exhibit 4.4 to the
                  Company's Registration Statement on Form S-3 (File No.
                  333-70823) and incorporated by reference herein.

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

10.1              Earnest Money contract and Design/Build Agreement dated May 8,
                  1995, between MEPC Quorum Properties II, Inc. and Craftmade
                  International, Inc. (including exhibits), previously filed as
                  an exhibit in Form 10-Q for the quarter ended December 31,
                  1995, and herein incorporated by reference.

10.2              Assignment of Rents and Leases dated December 21, 1995,
                  between Craftmade International, Inc. and Allianz Life
                  Insurance Company of North America (including exhibits),
                  previously filed as an exhibit in Form 10-Q for the quarter
                  ended December 31, 1995, and herein incorporated by reference.

10.3              Deed of Trust, Mortgage and Security Agreement made by
                  Craftmade International, Inc., dated December 21, 1995, to
                  Patrick M. Arnold, as trustee for the benefit of Allianz Life
                  Insurance Company of North America
</Table>



                                       33
<PAGE>

<Table>
<S>               <C>

                  (including exhibits), previously filed as an exhibit in Form
                  10-Q for the quarter ended December 31, 1995, and herein
                  incorporated by reference.

10.4              Second Amended and Restated Credit Agreement dated November
                  14, 1995, among Craftmade International, Inc., Nations Bank of
                  Texas, N.A., as Agent and the Lenders defined therein
                  (including exhibits), previously filed as an exhibit in Form
                  10-Q for the quarter ended December 31, 1995, and herein
                  incorporated by reference.

10.5              Lease Agreement dated November 30, 1995, between Craftmade
                  International, Inc. and TSI Prime, Inc., previously filed as
                  an exhibit in Form 10-Q for the quarter ended December 31,
                  1995, and herein incorporated by reference.

10.6              Revolving credit facility with Texas Commerce Bank, previously
                  filed as an exhibit in Form 10-K for the year ended June 30,
                  1996, and herein incorporated by reference.

10.7              Agreement and Plan of Merger, dated as of July 1, 1998, by and
                  among Craftmade International, Inc., Trade Source
                  International, Inc., a Delaware corporation, Neall and Leslie
                  Humphrey, John DeBlois, the Wiley Family Trust, James
                  Bezzerides, the Bezzco Inc. Employee Retirement Trust and
                  Trade Source International, Inc., a California corporation,
                  filed as Exhibit 2.1 to the Company's Current Report on Form
                  8-K filed July 15, 1998 (File No. 33-33594-FW) and herein
                  incorporated by reference.

10.8              Voting Agreement, dated July 1, 1998, by and among James R.
                  Ridings, Neall Humphrey and John DeBlois, filed as Exhibit 2.1
                  to the Company's Current Report on Form 8-K filed July 15,
                  1998 (File No. 33-33594-FW) and herein incorporated by
                  reference.

10.9              Third Amendment to Credit Agreement, dated July 1, 1998, by
                  and among Craftmade International, Inc., a Delaware
                  corporation, Trade Source International, Inc., a Delaware
                  corporation, Chase Bank of Texas, National Association
                  (formerly named Texas Commerce Bank, National Association) and
                  Frost National Bank (formerly named Overton Bank and Trust),
                  filed as Exhibit 2.1 to the Company's Current Report on Form
                  8-K filed July 15, 1998 (File No. 33-33594-FW) and herein
                  incorporated by reference.
</Table>



                                       34
<PAGE>

<Table>
<S>               <C>

10.10             Consent to Merger by Chase Bank of Texas, National Association
                  and Frost National Bank, filed as Exhibit 2.1 to the Company's
                  Current Report on Form 8-K filed July 15, 1998 (File No.
                  33-33594-FW) and herein incorporated by reference.

10.11             Employment Agreement, dated July 1, 1998, by and among
                  Craftmade International, Inc., Trade Source International,
                  Inc., a Delaware corporation and Neall Humphrey, filed as
                  Exhibit 2.1 to the Company's Current Report on Form 8-K filed
                  July 15, 1998 (File No. 33-33594-FW) and herein incorporated
                  by reference.

10.12             Employment Agreement, dated July 1, 1998, by and among
                  Craftmade International, Inc., Trade Source International,
                  Inc., a Delaware corporation and Leslie Humphrey, filed as
                  Exhibit 2.1 to the Company's Current Report on Form 8-K filed
                  July 15, 1998 (File No. 33-33594-FW) and herein incorporated
                  by reference.

10.13             Employment Agreement, dated July 1, 1998, by and among
                  Craftmade International, Inc., Trade Source International,
                  Inc., a Delaware corporation and John DeBlois, filed as
                  Exhibit 2.1 to the Company's Current Report on Form 8-K filed
                  July 15, 1998 (File No. 33-33594-FW) and herein incorporated
                  by reference.

10.14             Fourth Amendment to Credit Agreement, dated April 2, 1999, by
                  and among Craftmade International, Inc., a Delaware
                  corporation, Durocraft International, Inc. a Texas
                  corporation, Trade Source International, a Delaware
                  corporation, Chase Bank of Texas, National Association and
                  Frost National Bank, filed as Exhibit 10.17 to the Company's
                  Quarterly Report on Form 10-Q filed May 15, 2000 (File No.
                  000-26667) and herein incorporated by reference.

10.15             Letter Agreement Concerning Fifth Amendment to Credit
                  Agreement, dated August 11, 1999, from Chase Bank of Texas,
                  N.A. and Frost National Bank to Craftmade International, Inc.,
                  Durocraft International Inc., Trade Source International,
                  Inc., and C/D/R Incorporated, filed as Exhibit 10.18 to the
                  Company's Quarterly Report on Form 10-Q filed May 15, 2000
                  (File No. 000-26667) and herein incorporated by reference.
</Table>



                                       35
<PAGE>

<Table>
<S>               <C>

10.16             Sixth Amendment to Credit Agreement, dated November 12, 1999,
                  by and among Craftmade International, Inc., a Delaware
                  corporation, Durocraft International, Inc., a Texas
                  corporation, Trade Source International, Inc., a Delaware
                  corporation, C/D/R Incorporated, a Delaware corporation, Chase
                  Bank of Texas, National Association and Frost National Bank,
                  filed as Exhibit 10.19 to the Company's Quarterly Report on
                  Form 10-Q filed May 15, 2000 (File No. 000-26667) and herein
                  incorporated by reference.

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

10.18             Seventh Amendment to Credit Agreement dated May 12, 2000, by
                  and among Craftmade International, Inc., a Delaware
                  corporation, Durocraft International, Inc., a Texas
                  corporation, Trade Source International, Inc., a Delaware
                  corporation, C/D/R Incorporated, a Delaware corporation, Chase
                  Bank of Texas, National Association and Frost National Bank,
                  filed as Exhibit 10.21 to the Company's Annual Report on Form
                  10-K filed September 26, 2000 (File No. 000-26667) and herein
                  incorporated by reference.

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

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

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



                                       36
<PAGE>

<Table>
<S>               <C>

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

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

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

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

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

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

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




                                       37