8-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED):
February 9, 2005

CRAFTMADE INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

Delaware
(State of incorporation) 000-26667
(Commission File No.) 75-2057054
(IRS Employer 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

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

     o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

     o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

     o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

     o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

	Item 2.02 Results of Operations and Financial Condition.
	Item 7.01 Regulation FD Disclosure.
	Item 9.01 Financial Statements and Exhibits.
SIGNATURES
EXHIBIT INDEX
Press Release

Section 2 — Financial Information

Item 2.02 Results of Operations and Financial Condition.

Section 7 — Regulation FD

Item 7.01 Regulation FD Disclosure.

     The following information is furnished pursuant to Item 2.02, “Results of Operations and Financial Condition” and Item 7.01, “Regulation FD Disclosure.”

     On February 9, 2005, Craftmade International, Inc. (the “Company”) issued a press release announcing its financial results for the quarter ended December 31, 2004 and certain other information. A copy of this press release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(c)   Exhibits.

           The following exhibits are furnished with this Form 8-K.

99.1 Press release of the Company, dated February 9, 2005

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 hereunto duly authorized.

	CRAFTMADE INTERNATIONAL, INC.
Date: February 9, 2005	By:	/s/ Brad Dale Heimann
		Brad Dale Heimann
		Executive Vice President and Interim Chief Financial Officer

EXHIBIT INDEX

Exhibit No.	Description
99.1     —	Press release of the Company, dated February 9, 2005.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

For Further Information:
James R. Ridings	Hala Aly
Chairman and Chief Executive Officer	Halliburton Investor Relations
(972) 393-3800, ext. 166	(972) 458-8000
investorrelations@craftmade.com	haly@halliburtonir.com

Craftmade International Announces Sales and Earnings Results
For Its Fiscal 2005 Second Quarter and First Six Months

— Net Income Increased 37.2%
EPS Increased 48.0% —

COPPELL, TEXAS, February 9, 2005 — Craftmade International, Inc. (Nasdaq: CRFT) today reported that net income increased 37.2% to $1,872,000 for its fiscal 2005 second quarter ended December 31, 2004, compared to net income of $1,364,000 for the same period in the previous year. On a fully diluted basis, net income per share increased 48.0% to $0.37 for the second quarter ended December 31, 2004, compared to earnings per share of $0.25 for the corresponding year-ago period. Fully diluted shares outstanding for the three month period were 5,057,000 compared to 5,477,000 for the same period last year.

The Company has also announced that it has entered into a non-binding letter of intent and is currently negotiating a definitive agreement to purchase all of the issued and outstanding capital stock of Bill Teiber Co., Inc., a Texas corporation doing business as Teiber Lighting Products. Teiber was established in 1968 as an importer and distributor of decorative light bulbs. Today, Teiber distributes over 3,000 different light bulbs and complementary lighting products as well as an extensive line of door chimes and pushbuttons from its three distribution centers.

Net sales for the Company declined $599,000 or 2.1% to $28,349,000 for the three month period ended December 31, 2004 compared to $28,948,000 for the same three month period last year. Net sales from the Craftmade segment decreased $278,000 or 2.2% to $12,268,000 for the three months ended December 31, 2004 from $12,546,000 for the same three month period last year. The decrease in sales of the Craftmade segment was primarily related to a general decline across product lines.

Net sales of the TSI segment declined $321,000, or 2.0% to $16,081,000 for the three months ended December 31, 2004 from $16,402,000 for the same three month period last year. The decrease was due to a $3,706,000 decline in Design Trends’ sales, partially offset by a net increase in sales of the remaining divisions of the mass retail segment, and a charge that reduced net sales in the second quarter of fiscal 2004 related to the roll out of a new product category at Prime Home Impressions, LLC (“PHI”), one of the Company’s 50%-owned subsidiaries.

Press Release
Craftmade International, Inc.
February 9, 2005
Page 2

Design Trends’ sales decline was primarily due to changes in the buying pattern of its largest mass retail customer and to a lesser extent exiting from 118 stores. Craftmade’s management receives feedback from this retail customer, primarily at the time of the retail customer’s line review in connection with the annual reset of its lighting program. Based on the most recent line review, management believes that the retail customer remains committed to the lighting program with Design Trends. Management believes the decline in Design Trends’ revenue is related to changes in the retail customer’s sales forecasts, targeted levels of replenishment inventory, targeted inventory turns, and other factors that are within the control of the retail customer.

“Our second quarter 2005 sales did not meet our expectations, primarily due to the Design Trends’ lighting program. Because of those factors noted above, we believe that Design Trends’ sales will continue to decline for the remainder of the fiscal year compared to the same period a year ago,” commented James R. Ridings, Chairman and Chief Executive Officer of Craftmade. “However, because we are refocusing our efforts on lighting showrooms and specialty retailers, management believes net sales of the Craftmade segment will increase during the remaining half of the year. The Teiber acquisition will supplement this growth by allowing us to expand Teiber’s successful product lines to our existing customers.”

Gross profit of the Company as a percentage of sales increased to 31.1% for the three months ended December 31, 2004, compared to 26.4% for the same period of 2003. Gross profit benefited from a $304,000 reduction in cost of sales by an amount that had been accrued in prior periods related to import brokerage fees and duties (“Gross Profit Benefit”). The pre-tax earnings impact of the Gross Profit Benefit totaled $224,000 net of minority interest expense from the 50% owned subsidiaries. On an adjusted basis, gross profit as a percentage of sales was 30.0% for the second quarter.

The gross profit from the Craftmade division decreased to 37.5% of sales from 38.3% of sales in the year-ago period, primarily due to increased freight costs and increased product costs as a result of the weakening of the U.S. dollar compared to the Taiwan dollar, offset by the Gross Profit Benefit. The gross profit percentage of the TSI segment increased to 26.2% of sales for the three months ended December 31, 2004, compared to 17.3% of sales in the prior year period. The increase was due to the following (i) a $2,100,000 charge that reduced gross sales in the three months ended December 31, 2003 that was incurred in connection with the roll out of a new product to a customer of PHI, (ii) the implementation of a markdown accrual on sales to TSI’s largest mass retail customer, (iii) a decrease in outbound freight cost, and (iv) a $171,000 increase from the Gross Profit Benefit as described above.

Total selling, general and administrative (“SG&A”) expenses of the Company decreased $440,000 to $4,496,000 or 15.9% of net sales for the three months ended December 31, 2004 from $4,936,000 or 17.1% of net sales for the same three month period last year. Total SG&A expenses of the Craftmade segment increased $81,000 to $2,672,000 or 21.8% of sales compared to $2,591,000 or 20.7% of sales for the same period in the previous fiscal year. The increase was primarily related to an increase in salaries and benefits that resulted from the severance agreement with the Company’s former Chief Financial Officer. Total SG&A expenses of the TSI segment decreased $521,000 to $1,824,000 or 11.3% of sales compared to $2,345,000 or 14.3% of sales for the same period in the previous year. The decrease in

Press Release
Craftmade International, Inc.
February 9, 2005
Page 3

SG&A expenses resulted from (i) a lower overhead allocation from the decline in sales of Design Trends, (ii) lower salary and wages as the result of reduced headcount from the closure of the TSI division’s California office and related severance costs incurred in the prior year quarter, and (iii) lower travel costs in the current year quarter from relocating employees from the California office in the prior year quarter. The Company anticipates SG&A expenses to increase in the remaining half of the year primarily as a result of higher costs from compliance with Section 404 of the Sarbanes-Oxley Act of 2002.

Pre-tax income from the Company’s 50%-owned subsidiaries increased $721,000 to $995,000 for the second quarter from $274,000 in the prior-year period. The increase resulted from a $2,100,000 charge that lowered pre-tax income in the second quarter of fiscal 2004 related to PHI’s new product rollout that did not occur in the second quarter of the current year. The corresponding decline in pre-tax income from the Company’s 50% owned subsidiaries resulted from a decline in net sales of Design Trends as discussed above.

Mr. Ridings concluded, “The outlook for the balance of the year remains positive. With continuing strong results in our businesses, we anticipate achieving our 20^th consecutive year of profitability, as we anticipate 10% to 15% earnings per share growth for the remainder of fiscal 2005. We have also made significant progress in new product development that we believe will fuel growth for the future. These initiatives, along with the acquisition of Teiber Lighting Products, will enable us to offer a more complete product line to existing customers and expand our presence in the showroom market. Finally, we remain committed to creating long-term growth, building earnings power and increasing shareholder value through continuous internal improvements, selective acquisitions and disposition of assets, a focus on cash flow, and retention of outstanding people.”

A conference call to discuss the company’s second quarter fiscal 2005 results is scheduled for Thursday, February 10, at 10:00 a.m. Central Time. To participate in this call, dial (888) 565-1421 or (706) 758-9956 and refer to confirmation code 3823628. A replay of the conference call can also be accessed via the company’s Web site at www.craftmade.com.

Craftmade International, Inc., founded in 1985 and based in Coppell, Texas, is engaged in the design, distribution and marketing of a broad range of proprietary ceiling fans, lighting products and related accessories. The company distributes its premium products through a network of 1,600 showrooms and electrical wholesalers through a national sales organization of more than 65 independent sales representatives. Through its Trade Source International subsidiary, acquired in 1998, Craftmade distributes outdoor lighting, ceiling fan accessories and an indoor lighting line to the mass merchandiser market.

Certain statements in this News Release constitute “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Craftmade International, Inc. to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These factors are discussed in more detail in the company’s Form 10-K filing with the Securities and Exchange Commission.

Press Release
Craftmade International, Inc.
February 9, 2005
Page 4

Craftmade International, Inc.
Summary Statements of Income (Unaudited)
(In thousands except per share data)

	FOR THE THREE MONTHS ENDED						FOR THE SIX MONTHS ENDED
	December 31,			December 31,			December 31,			December 31,
	2004			2003			2004			2003
Net sales	$	28,349		$	28,948		$	57,374		$	60,138
Cost of goods sold		19,537			21,305			40,042			42,275
Gross profit		8,812			7,643			17,332			17,863
Gross margin		31.1	%		26.4	%		30.2	%		29.7	%
Selling, general and administrative expenses		4,496			4,936			9,905			9,441
Interest expense, net		240			146			470			339
Depreciation and amortization		141			151			288			305
Total expenses		4,877			5,233			10,663			10,085
Income before income taxes and minority interests		3,935			2,410			6,669			7,778
Minority interests		995			274			1,561			1,921
Income before income taxes		2,940			2,136			5,108			5,857
Provision for income taxes		1,068			772			1,838			2,125
Net income	$	1,872		$	1,364		$	3,270		$	3,732
Basic earnings per common share	$	0.37		$	0.25		$	0.65		$	0.69
Diluted earnings per common share	$	0.37		$	0.25		$	0.64		$	0.68
Cash dividends declared per common share	$	0.10		$	0.10		$	0.20		$	0.20

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