10-Q/A 1 d00062ae10vqza.txt AMENDMENT NO. 1 TO FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE ---- SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2001 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 . ---------- ---------- 5,913,058 shares of Common Stock were outstanding as of October 31, 2001. CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES Index to Quarterly Report on Form 10-Q/A Part I. Financial Information Introductory Note - Restatement The Company has changed the way it accounts for its two 50%-owned investees - Design Trends and Prime/Home Impressions - to account for these investees using the equity method of accounting rather than consolidation. Assets, liabilities, revenues and expense of these two investees are no longer included in the Company's balance sheets or statements of income. Instead, the balance sheets include the Company's investment in the investees and the income statements reflect, as a single line item, its equity share in the earnings of these investees. Net income, primary and diluted earnings per share and stockholders' equity did not change for any period restated. For purposes of this Form 10-Q/A, the Company has amended and restated in its entirety Part I of the Company's Form 10-Q for the quarterly period ended September 30, 2001. This Form 10-Q/A does not reflect events occurring after the filing of the original Form 10-Q, or modify or update those disclosures in any way, except as required to reflect the effects of this restatement. Item 1. Financial Statements (unaudited) Condensed Consolidated Statements of Income for the three months ended September 30, 2001 and 2000 (Restated). Condensed Consolidated Balance Sheets as of September 30, 2001 and June 30, 2001 (Restated). Condensed Consolidated Statements of Cash Flows for the three months ended September 30, 2001 and 2000 (Restated). Notes to Condensed Consolidated Financial Statements (Restated). Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (Restated). 2 Item 3. Quantitative and Qualitative Disclosures About Market Risk (Restated). CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED -------------------------- September 30 September 30 2001 2000 Restated Restated ------------ ------------ (In thousands except per share data) Net Sales $ 22,267 $ 20,872 Cost of goods sold 15,622 14,719 ------------ ------------ Gross profit 6,645 6,153 ------------ ------------ Selling, general and administrative expenses 3,759 3,536 Interest expense, net 313 526 Depreciation and amortization 133 222 ------------ ------------ Total Expenses 4,205 4,284 ------------ ------------ Income before equity in earnings of 50% owned investees and income taxes 2,440 1,869 Equity in earnings of 50% owned investees before income taxes 606 377 ------------ ------------ Income before income taxes 3,046 2,246 Provision for income taxes 1,089 822 ------------ ------------ Net income $ 1,957 $ 1,424 ============ ============ Basic and diluted earnings per common share $ 0.33 $ 0.24 ============ ============ Cash dividends declared per common share $ 0.07 $ 0.04 ============ ============
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 3 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS ASSETS
September 30 June 30, 2001 2001 Restated Restated ------------ ------------ (Unaudited) (In thousands) Current assets: Cash $ 1,261 $ 723 Accounts receivable - net of allowance of $150,000 13,931 13,308 Receivables from 50% owned investees 6,245 8,271 Inventory 11,438 12,650 Deferred income taxes 758 758 Prepaid expenses and other current assets 1,250 1,158 ------------ ------------ Total current assets 34,883 36,868 Property and equipment, net Land 1,535 1,535 Building 7,784 7,784 Office furniture and equipment 3,117 2,998 Leasehold improvements 253 253 ------------ ------------ 12,689 12,570 Less: accumulated depreciation (3,022) (2,900) ------------ ------------ Total property and equipment, net 9,667 9,670 Goodwill, net of accumulated amortization of $1,204,000 4,735 4,735 Investment in 50% owned investees 1,410 1,049 Other assets 64 39 ------------ ------------ Total other assets 6,209 5,823 ------------ ------------ Total assets $ 50,759 $ 52,361 ============ ============
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 4 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS LIABILITIES AND STOCKHOLDERS' EQUITY
September 30 June 30, 2001 2001 Restated Restated ------------- ------------- (Unaudited) (In thousands) Current liabilities: Note payable - current $ 521 $ 512 Revolving line of credit 16,000 18,800 Accounts payable 2,930 4,124 Commissions payable 256 301 Income taxes payable 1,058 719 Accrued liabilities 2,344 1,806 ------------- ------------- Total current liabilities 23,109 26,262 Other non-current liabilities: Deferred income taxes 241 241 Note payable - long term 7,943 8,076 ------------- ------------- Total liabilities 31,293 34,579 ------------- ------------- 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,9,342,535 and 9,326,535 shares issued, respectively 93 93 Additional paid-in capital 12,791 12,683 Unearned deferred compensation (100) (108) Retained earnings 27,429 25,886 Accumulated other comprehensive income 53 28 ------------- ------------- 40,298 38,614 Less: treasury stock, 3,429,477 common shares at cost, and 32,000 preferred shares at cost (20,832) (20,832) ------------- ------------- Total stockholders' equity 19,466 17,782 ------------- ------------- Total liabilities and stockholders' equity $ 50,759 $ 52,361 ============= =============
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 5 CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
FOR THE THREE MONTHS ENDED ------------------------------ September September 30, 2001 30, 2000 Restated Restated ------------ ------------ (In thousands except per share data) Net cash provided by operating activities: 3,898 $ 3,682 ------------ ------------ Cash flows from investing activities: Net additions to equipment (130) (67) ------------ ------------ Net cash used for investing activities (130) (67) ------------ ------------ Cash flows from financing activities: Net proceeds from lines of credit (2,800) (1,600) Principal payments for note payable (124) (84) Stock repurchase -- (1,595) Stock options exercised 108 -- Cash dividends (414) (249) ------------ ------------ Net cash used for financing activities (3,230) (3,528) ------------ ------------ Net increase in cash 538 87 Cash at beginning of period 723 1,065 ------------ ------------ Cash at end of period $ 1,261 $ 1,152 ============ ============
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 6 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES SEPTEMBER 30, 2001 (Unaudited) Note 1 - BASIS OF PREPARATION AND PRESENTATION The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission and include all adjustments which are, in the opinion of management, necessary for a fair presentation. The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries; 50% owned investees are accounted for under the equity method. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations. The Company believes that the disclosures are adequate to make the information presented not misleading; however, it is suggested that these financial statements be read in conjunction with the financial statements and the notes thereto which are incorporated by reference in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2001, as amended. The financial data for the interim periods may not necessarily be indicative of results to be expected for the year. Note 2 - Restatement The Company has changed the way it accounts for its two 50%-owned investees - Design Trends, LLC ("Design Trends") and Prime/Home Impressions, LLC ("PHI") - to account for these investees using the equity method of accounting rather than consolidation. Assets, liabilities, revenues and expense of these two investees are no longer included in the Company's balance sheets or statements of income. Instead, the balance sheets include the Company's investment in the investees, and the income statements reflect, as a single line item, its equity share in the earnings of these investees. Net income, primary and diluted earnings per share and stockholders' equity did not change for any period restated. The following table sets forth balances as originally reported and as restated (in thousands, except per share amounts): 7
September 30, June 30, 2001 2001 ----------------------------- ----------------------------- As As Previously As Previously As Reported Restated Reported Restated ------------ ------------ ------------ ------------ Accounts receivable- net $ 19,352 $ 13,931 $ 19,215 $ 13,308 Receivables from 50% owned investees -- $ 6,245 -- $ 8,271 Inventory $ 17,719 $ 11,438 $ 19,454 $ 12,650 Total current assets $ 41,264 $ 34,883 $ 42,214 $ 36,868 Investment in 50% owned investees -- $ 1,410 -- $ 1,049 Total assets $ 59,314 $ 50,759 $ 59,129 $ 52,361 Revolving lines of credit $ 17,678 $ 16,000 $ 20,600 $ 18,800 Total current liabilities $ 30,254 $ 23,109 $ 31,981 $ 26,262 Total liabilities $ 39,848 $ 31,293 $ 41,347 $ 34,579 Minority interest $ 1,410 -- $ 1,049 -- Stockholders' equity $ 19,466 $ 19,466 $ 17,782 $ 17,782
Three Months Ended Three Months Ended September 30, 2001 September 30, 2000 ----------------------------- ----------------------------- As As Previously As Previously As Reported Restated Reported Restated ------------ ------------ ------------ ------------ Net sales $ 32,068 $ 22,267 $ 24,005 $ 20,872 Gross profit $ 9,060 $ 6,645 $ 7,284 $ 6,153 Equity in earnings of 50% owned investees before income taxes -- $ 606 -- $ 377 Net income $ 1,957 $ 1,957 $ 1,424 $ 1,424 Primary earning per share $ 0.33 $ 0.33 $ 0.24 $ 0.24 Diluted earnings per share $ 0.33 $ 0.33 $ 0.24 $ 0.24
Note 3 - INVESTMENT IN 50% OWNED INVESTEES The Combined summarized financial information for Design Trends and PHI is as follows for the three months ended (in thousands):
September 30 ------------------------- 2001 2000 ------- ------- Net sales $ 9,801 $ 3,133 Gross profit $ 2,415 $ 1,131 Income before income taxes $ 1,122 $ 746
8 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. Note 4 - EARNINGS PER SHARE The following is a reconciliation of the numerator and denominator used in the basic and diluted EPS calculation:
FOR THE THREE MONTHS ENDED September 30, September 30, 2001 2000 ------------- ------------- (In thousands, except per share data) Basic and diluted EPS: Numerator: Net income $ 1,957 $ 1,424 ============= ============= Basic denominator: Common shares outstanding 5,903 6,056 ============= ============= Basic EPS $ .33 $ .24 ============= ============= Diluted denominator: Common shares outstanding 5,903 6,056 Options 71 -- ------------- ------------- Total shares 5,974 6,056 ============= ============= Diluted EPS $ .33 $ .24 ============= =============
Note 5 - DERIVATIVE FINANCIAL INSTRUMENT The Company records all derivative instruments on the balance sheet at fair value. Changes in the fair value of derivatives are recorded each period in current earnings or other comprehensive income, depending on whether a derivative is designated as part of a hedge transaction and, if it is, depending on the type of hedge transaction. For fair-value hedge transactions in which the Company is hedging changes in an asset's, liability's, or firm commitment's fair value, changes in the fair value of the derivative instrument will generally be offset in the income statement by changes in the hedged item's fair value. For cash-flow hedge transactions in which the Company is hedging the variability of cash flows related to a variable-rate asset, liability, or a forecasted transaction, changes in the fair value of the derivative instrument will be reported in other comprehensive income. The gains and losses on the derivative instrument that are reported in other comprehensive income will be reclassified as earnings in the periods in which earnings are impacted by the variability of the cash flows of the hedged item. The ineffective portion of all hedges will be recognized in current-period earnings. 9 The Company has an interest rate swap agreement, with a maturity of December 29, 2003, to manage its exposure to interest rate movements by effectively converting its long-term facility debt from fixed to variable rates. The notional amount of the interest rate swap subject to variable rates as of September 30, 2001 was $2,708,000, which decreases as payments are made on the long-term note payable. Under this agreement, the Company has contracted to pay a variable rate equal to LIBOR plus 2.43% (which totaled 5.07% at September 30, 2001) and receive a fixed rate of 8.125%. For the three months ended September 30, 2001, the Company recorded a net-of-tax cumulative-effect-type adjustment of $25,000 in accumulated other comprehensive income to recognize at fair value the interest rate swap agreement which management designated as a cash-flow hedging instrument. As the critical terms of the interest rate swap agreement and the interest-bearing debt are the same, the Company has assumed that there is no ineffectiveness in the hedge relationship. Note 6 - SEGMENT INFORMATION The Company has two reportable segments, Craftmade and Trade Source International, Inc., its wholly-owned subsidiary ("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 lighting and fan accessories marketed solely to mass merchandisers. The accounting policies of the segments are the same as those described in Note 2 - Summary of Significant Accounting Policies to the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2001, as amended. The Company evaluates the performance of its segments and allocates resources to them based on their operating profit and loss and cash flows. The following table presents information about the reportable segment (in thousands):
Craftmade TSI Total ------------- ------------- ------------- For the three months ended September 30, 2001 (restated): Net sales from external customers $ 13,427 $ 8,840 $ 22,267 Operating profit 2,054 699 2,753 For the three months ended September 30, 2000 (restated): Net sales from external customers $ 12,851 $ 8,021 $ 20,872 Operating profit 1,860 535 2,395
10 Note 7 - GOODWILL AND OTHER INTANGIBLE ASSETS Effective July 1, 2001, the Company adopted Statement on Financial Accounting Standards No. 142 ("SFAS 142"), Goodwill and Other Intangible Assets. SFAS 142 changes the accounting for goodwill from an amortization method to an impairment-only approach. Amortization of goodwill and intangible assets with indefinite lives, including such assets recorded in past business combinations, cease upon adoption. Thus, no amortization was recognized in the accompanying consolidated statements of income for the three months ended September 30, 2001 compared to $99,000 for the same period of the prior year. On an annual basis, and when there is reason to suspect that their values have been diminished or impaired, these assets must be tested for impairment, and a write-down may be necessary. SFAS 142 allows up to six months from the date of adoption to complete the initial goodwill impairment test. The Company has not completed the initial impairment test; however, based on current information, the Company does not expect goodwill will be impaired. Note 8 - COMPREHENSIVE INCOME Comprehensive income for the three months ended September 30, 2001 and 2000 was $1,982,000 and $1,392,000, respectively. ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (RESTATED). Cautionary Statement With the exception of historical information, the matters discussed in this document contain forward-looking statements. There are certain important factors which could cause results to differ materially from those anticipated by these forward-looking statements. Some of the important factors which would cause actual results to differ materially from those in the forward-looking statements include, among other things, the success of the Design Trends' portable lamp program, changes in anticipated levels of sales, whether due to future national or regional economic and competitive conditions, changes in relationships with customers, TSI's dependence on select mass merchandisers, customer acceptance of existing and new products, pricing pressures due to excess capacity, cost increases, changes in tax or interest rates, unfavorable economic and political developments in Asia, the location of the Company's primary vendors, declining conditions in the home construction industry, inability to realize deferred tax assets, and other uncertainties, all of which are difficult to predict and many of which are beyond the control of the Company. 11 Results of Operations Three Months Ended September 30, 2001 Compared to Three Months Ended September 30, 2000. Net Sales. Net sales for the Company increased $1,395,000, or 6.7%, to $22,267,000 for the three month period ended September 30, 2001 from $20,872,000 for the same three month period last year. Net sales from the Craftmade division increased $576,000, or 4.4%, to $13,427,000 for the three months ended September 30, 2001 from $12,851,000 for the same three month period last year. The increase in sales of the Craftmade division was due to a significant increase in Craftmade's sales of outdoor lighting which generated incremental revenue of $296,000 compared to the prior year period. In addition, Craftmade's ceiling fan sales increased 2.7% compared to the same period of the previous year. Net sales of the TSI division increased $819,000, or 10.2%, to $8,840,000 for the three months ended September 30, 2001 from $8,021,000 for the same three month period last year. The increase in sales of TSI was primarily attributable to direct import sales of promotional items to a mass retail customer. Gross Profit. Gross profit of the Company as a percentage of sales increased to 29.8% of net sales for the three months ended September 30, 2001 compared to 29.5% for the same period of 2000. The gross margin of the Craftmade division increased to 37.4% of sales from 36.6% of sales in the year ago period. The improvement in the gross margin of the Craftmade division was due primarily to price concessions the Company negotiated with its ceiling fan vendor which were implemented in the fourth quarter of fiscal 2001, and have, in part, been passed on to customers. The gross margin of the TSI division increased to 18.4% of sales for the three months ended September 30, 2001 compared to 18.1% of sales in the year ago period. Selling, General and Administrative Expenses. Total selling, general and administrative expenses ("SG&A") of the Company as a percentage of sales remained unchanged at 16.9% of net sales or $3,759,000 for the three months ended September 30, 2001 compared to $3,536,000 for the same three month period last year. The total dollar increase in SG&A expenses of $223,000 was primarily attributable to costs associated with increased sales. SG&A expenses of the Craftmade division as a percentage of sales decreased to 21.3% of net sales or $2,858,000 from 21.4% of sales or $2,750,000 for the same three-month period last year. Total SG&A expenses of the TSI division increased to 10.2% of sales or $901,000 from 9.8% of sales or $786,000 for the same period in the previous year. Interest Expense. Net interest expense of the Company decreased $213,000 to $313,000 for the three months ended September 30, 2001 from $526,000 for the same three-month period last year. This decrease was primarily the result of lower interest rates in effect during the period combined with a decrease in the outstanding balance of the Company's revolving lines of credit. 12 Equity in Earnings of 50% Owned Investees Before Income Taxes. Income from investees, representing the Company's 50% ownership of PHI and Design Trends, increased $229,000 to $606,000 from $377,000 for the three months ended September 20, 2001 and 2000, respectively. The increase in income from these investees was due to an increase in sales of Design Trends portable lamp program which generated $6,939,000 in incremental revenue during the period. Provision For Income Taxes. The provision for income taxes increased to $1,089,000 or 35.8% of net income before taxes for the three months ended September 30, 2001, from $822,000 or 36.6% for the same period of the prior year. LIQUIDITY AND CAPITAL RESOURCES The Company's cash increased $538,000 to $1,261,000 at September 30, 2001 from $723,000 at June 30, 2001. The Company's operating activities provided cash of $3,898,000, primarily attributable to the Company's net income from operations and collections on customer accounts. The $130,000 of cash used for investing activities related primarily to expenditures associated with the implementation of the Company's logistics and accounting systems upgrade. The $3,230,000 of cash used for financing activities was primarily the result of (i) principal payments of $124,000 on the Company's note payable,(ii) cash dividends of $414,000, and (iv) principal payments of $2,800,000 on the Company's lines of credit. These amounts were partially offset by proceeds of $108,000 received from stock options exercised. The Company did not repurchase any of its common shares in the quarter ended September 30, 2001. At September 30, 2001, subject to continued compliance with certain covenants and restrictions, the Company had $20,000,000 available on its lines of credit, of which $16,000,000 had been utilized. The line of credit expires on November 30, 2001 and the Company expects to renegotiate the line of credit on similar terms prior to expiration. The Company's management believes that its current line of credit, combined with cash flows from operations, are adequate to fund the Company's and Design Trends' current operating needs, make annual payments of approximately $1,200,000 under the note payable, fund anticipated capital expenditures, as well as fund its projected growth over the next twelve months. At September 30, 2001, $8,464,000 remained outstanding under the twelve year note payable for the Company's 378,000 square foot operating facility. The Company's management believes that this facility will be sufficient for its purposes for the foreseeable future. During the first quarter of fiscal 2000, the Company entered into a letter agreement with Chase Bank of Texas, N.A., pursuant to which the Company 13 conducted a fixed-to-floating interest rate swap. See Note 3 - Derivative Financial Instrument in the Notes to Condensed Consolidated Financial Statements and Item 3 - Quantitative and Qualitative Disclosures about Market Risk. The Company does not believe that this transaction will have a material effect on its financial condition. With respect to the Company's 50%-owned investees, PHI had $3,000,000 available on its line of credit at September 30, 2001, of which $1,678,000 had been utilized. Design Trends utilizes the Company's line of credit described above. In addition, in order to satisfy anticipated demand for the portable lamp program, Design Trends' inventory has increased to approximately $4.8 million. Currently, this program is primarily with one mass merchandiser customer. Should the terms of the program with this particular mass merchandiser be at a level less than originally anticipated, Design Trends would be required to find other customers for this inventory. There can be no assurances that the alternative sources would generate similar sales levels and profit margins as anticipated with the current customer. ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (RESTATED). The information set forth below constitutes a "forward looking statement." See Management's Discussion and Analysis of Financial Condition and Results of Operations - Cautionary Statement. As a result of the terms of the Company's note payable on its operating facility, the Company is subject to market risk associated with adverse changes in interest rates. In an effort to reduce this market risk, the Company entered into an interest rate swap agreement (the "Swap Agreement") with Chase Bank of Texas, National Association ("Chase") during the first quarter of fiscal 2000. The Swap Agreement is held by the Company for non-trading purposes and is designated as a cash-flow hedging instrument. The notional principal amount of the Swap Agreement was $2,708,000 at September 30, 2001. During the term of the Swap Agreement, the Company receives a fixed rate of interest (8.125%) from Chase on this notional amount in consideration of its obligation to pay a floating rate of interest on this notional amount. The floating rate of interest is based on the regularly published London Interbank Offered Rate ("LIBOR") plus 2.43%. At September 30, 2001, LIBOR was equal to 2.64%. The Swap Agreement matures on December 29, 2003. Although the Company entered into the Swap Agreement to reduce its exposure to changes in interest rates, a sharp rise in interest rates could materially adversely affect the financial condition and results of operations of the Company. Under the Swap Agreement, for each one percent (1%) incremental increase in LIBOR, the Company's annualized net interest expense would increase by approximately $27,080. Consequently, an increase in LIBOR of five percent (5%) would result in an estimated 14 annualized increase of interest expense for the Company of approximately $135,400. See Note 4 - Derivative Financial Instrument to the Notes to Condensed Consolidated Financial Statements. 15 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CRAFTMADE INTERNATIONAL, INC. (Registrant) Date September 26, 2002 /s/ James R. Ridings -------------------- ------------------------------ JAMES R. RIDINGS President and Chief Executive Officer Date September 26, 2002 /s/ Kathleen B. Oher -------------------- ------------------------------ KATHLEEN B. OHER Chief Financial Officer 16 Certifications Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, James R. Ridings, certify that: 1. I have reviewed this quarterly report on Form 10-Q/A of Craftmade International, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. Date: September 26, 2002 /s/ James R. Ridings ------------------------------ James R. Ridings President and Chief Executive Officer I, Kathleen B. Oher, certify that: 1. I have reviewed this quarterly report on Form 10-Q/A of Craftmade International, Inc.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; and 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report. Date: September 26, 2002 /s/ Kathleen B. Oher ------------------------------ Kathleen B. Oher Chief Financial Officer 17