<PAGE> 1
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 SEPTEMBER 30, 2000 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 .
---------- ----------
5,887,058 shares of Common Stock were outstanding as of October 26, 2000.
<PAGE> 2
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
months ended September 30, 2000 and 1999.
Condensed Consolidated Balance Sheets as of September 30, 2000
and June 30, 2000.
Condensed Consolidated Statement of Changes in Stockholders'
Equity for the three months ended September 30, 2000.
Condensed Consolidated Statements of Cash Flows for the three
months ended September 30, 2000 and 1999.
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
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> 3
CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
--------------------------
September 30, September 30,
2000 1999
------------- -------------
<S> <C> <C>
(In thousands except per share data)
Net Sales $ 24,281 $ 21,654
Cost of goods sold 15,781 13,549
-------- --------
Gross profit 8,500 8,105
-------- --------
Selling, general and
administrative expenses 5,068 4,765
Interest expense, net 589 338
Depreciation and amortization 224 211
-------- --------
Total Expenses 5,881 5,314
-------- --------
Income before income taxes
and minority interest 2,619 2,791
Provision for income taxes 822 885
-------- --------
Income before minority interest 1,797 1,906
Minority interest (373) (344)
-------- --------
Net income $ 1,424 $ 1,562
======== ========
Basic and diluted
earnings per common share $ .24 $ .22
======== ========
Cash dividends declared
per common share $ .04 $ .02
======== ========
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE> 4
CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, June 30,
2000 2000
------------- ----------
(Unaudited)
(in thousands)
<S> <C> <C>
Current assets:
Cash $ 1,348 $ 1,171
Accounts receivable - net of
allowance of $210,000
and $236,000, respectively 14,846 17,610
Inventory 14,370 15,322
Deferred income taxes 462 462
Prepaid expenses and other
current assets 1,174 918
------------- ----------
Total current assets 32,200 35,483
------------- ----------
Property and equipment, at cost:
Land 1,535 1,535
Building 7,784 7,784
Office furniture and equipment 2,347 2,297
Leasehold improvements 274 257
------------- ----------
11,940 11,873
Less: accumulated depreciation (2,529) (2,410)
------------- ----------
Total property and equipment, net 9,411 9,463
Goodwill, net of accumulated
amortization of $913,000
and $808,000, respectively 5,026 5,131
Other assets 18 24
------------- ----------
Total other assets 14,455 14,618
------------- ----------
$ 46,655 $ 50,101
============= ==========
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE> 5
CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, June 30,
2000 2000
------------- --------
(Unaudited)
(in thousands)
<S> <C> <C>
Current liabilities:
Note payable - current $ 480 $ 470
Revolving lines of credit 16,400 17,600
Accounts payable 1,897 4,179
Commissions payable 330 422
Income taxes payable 559 10
Accrued liabilities 1,470 1,540
-------- --------
Total current liabilities 21,136 24,221
Other non-current liabilities:
Deferred Income taxes 88 88
Note payable - long term 8,464 8,588
Derivative financial instrument 32 --
Minority interest 428 245
-------- --------
Total liabilities 30,148 33,142
-------- --------
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,
9,316,535 shares issued 93 93
Additional paid-in capital 12,453 12,453
Retained earnings 23,829 22,654
Accumulated other comprehensive loss (32) --
-------- --------
36,375 35,232
Less: treasury stock, 3,316,477
and 3,116,177 common shares at
cost, respectively, and 32,000
preferred shares at cost (19,868) (18,273)
-------- --------
Total Stockholders' Equity 16,507 16,959
-------- --------
Commitments and contingencies
$ 46,655 $ 50,101
======== ========
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE> 6
CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2000
<TABLE>
<CAPTION>
(In thousands) ACCUMULATED
SERIES A ADDITIONAL OTHER
PREFERRED PAID-IN RETAINED COMPREHENSIVE
VOTING COMMON STOCK STOCK CAPITAL EARNINGS LOSS TREASURY STOCK
--------------------- --------- ---------- ---------- ------------- --------------
Shares Amount Shares Amount Total
-------- -------- ------ -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance as of June 30, 2000 9,317 $ 93 $ 32 $ 12,453 $ 22,654 $ -- 3,148 $(18,273) $16,959
Comprehensive income:
Net income for the three months
ended September 30, 2000 1,424 1,424
Loss on derivative financial
instrument, net of tax of $19 (32) (32)
-------- --------- --------- ---------- ---------- ------- ------ -------- -------
Total comprehensive income 1,424 (32) 1,392
Stock repurchase 200 (1,595) (1,595)
Cash Dividends (249) (249)
-------- --------- --------- ---------- ---------- ------- ------ -------- -------
Balance as of September 30, 2000 9,317 $ 93 $ 32 $ 12,453 $ 23,829 $ (32) 3,348 $(19,868) $16,507
-------- --------- --------- ---------- ---------- ------- ====== ======== =======
</TABLE>
6
<PAGE> 7
CRAFTMADE INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
--------------------------
September 30, September 30,
2000 1999
------------- -------------
(In thousands)
<S> <C> <C>
Net cash provided by operating
activities: $ 3,592 $ 2,040
------- -------
Cash flows from investing activities:
Net additions to equipment (67) (39)
------- -------
Net cash used for investing activities (67) (39)
------- -------
Cash flows from financing activities:
Net proceeds from (payments to)
lines of credit (1,200) 3,000
Principal payments on note payable (114) (193)
Stock repurchase (1,595) (4,069)
Cash dividends (249) (139)
Distributions to minority interest members (190) (457)
------- -------
Net cash used for financing activities (3,348) (1,858)
------- -------
Net increase in cash 177 143
Cash at beginning of period 1,171 1,563
------- -------
Cash at end of period $ 1,348 $ 1,706
======= =======
</TABLE>
SEE ACCOMPANYING NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
7
<PAGE> 8
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
OF CRAFTMADE INTERNATIONAL, INC.
AND SUBSIDIARIES
SEPTEMBER 30, 2000
(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 subsidiaries. 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, 2000. The financial data for the interim periods may not necessarily be
indicative of results to be expected for the year.
Note 2 - STOCK REPURCHASE
During the years ended June 30, 2000 and 1999, the Company's Board of Directors
authorized the Company's management to repurchase up to an aggregate of
2,350,000 shares of the Company's outstanding common stock. At June 30, 2000 and
1999, the Company had repurchased 1,198,500 and 177,500 shares, respectively, at
an aggregate cost of $10,012,000 and $2,548,000, respectively, related to these
plans.
During the first quarter of fiscal 2001 the Company repurchased 200,300 shares
at an aggregate cost of $1,595,000.
8
<PAGE> 9
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
OF CRAFTMADE INTERNATIONAL, INC.
AND SUBSIDIARIES
SEPTEMBER 30, 2000
(Unaudited)
Note 3 - EARNINGS PER SHARE
The following is a reconciliation of the numerator and denominator used in the
basic and diluted EPS calculation:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
September 30, September 30,
2000 1999
------------- -------------
(In thousands, except per share data)
<S> <C> <C>
Basic and diluted EPS:
Numerator: Net income $ 1,424 $ 1,562
========= =========
Basic denominator: Common
shares outstanding 6,056 7,250
========= =========
Basic EPS $ .24 $ .22
========= =========
Denominator: Common
shares outstanding 6,056 7,250
Options -- --
--------- ---------
Total shares 6,056 7,250
========= =========
Diluted EPS $ .24 $ .22
========= =========
</TABLE>
Note 4 - DERIVATIVE FINANCIAL INSTRUMENT
The Company adopted Statement on Financial Accounting Standards No. 133 (FAS
133), Accounting for Derivative Instruments and Hedging Activities, on July 1,
2000. FAS 133 requires that all derivative instruments be recorded 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
9
<PAGE> 10
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.
During the first quarter of fiscal 2000, the Company entered into an interest
rate swap agreement, with a maturity of December 26, 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, 2000 was $3,942,000,
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% (9.05% at September 30, 2000) and receive a fixed rate of 8.125%. In
accordance with the transition provisions of FAS 133, the Company recorded a
net-of-tax cumulative-effect-type adjustment of $32,000 in accumulated other
comprehensive loss on the accompanying condensed consolidated statement of
changes in stockholders' equity 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 5 - SEGMENT INFORMATION
The Company has two reportable segments, Craftmade and TSI. The Company is
organized on a combination of product type and customer base. The Craftmade
segment primarily derives it's 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, 2000. The Company evaluates the
performance of its
10
<PAGE> 11
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
OF CRAFTMADE INTERNATIONAL, INC.
AND SUBSIDIARIES
SEPTEMBER 30, 2000
(Unaudited)
Note 5 - SEGMENT INFORMATION (cont'd)
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):
<TABLE>
<CAPTION>
Craftmade TSI Total
--------- -------- --------
<S> <C> <C> <C>
For the three months ended September 30, 2000:
Net sales from external customers $ 12,851 $ 11,430 $ 24,281
Operating profit 1,860 1,348 3,208
For the three months ended September 30, 1999:
Net sales from external customers $ 13,303 $ 8,351 $ 21,654
Operating profit 2,348 781 3,129
</TABLE>
11
<PAGE> 12
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 results to differ materially than those anticipated by some of
the 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, changes from 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 the Company.
Results of Operations
Three Months Ended September 30, 2000 Compared to Three Months Ended September
30, 1999.
Net Sales. Net sales for the Company increased $2,627,000, to $24,281,000 for
the three month period ended September 30, 2000 from $21,654,000 for the same
three month period last year. Net sales from the Craftmade division decreased
$452,000, or 3.4%, to $12,851,000 for the three months ended September 30, 2000
from $13,303,000 for the same three month period last year. The decline in sales
of the Craftmade division was due to a decline in the number of business days
from 63 business days in the quarter ended September 30, 1999 to 61 business
days in the quarter ended September 30, 2000. Average daily sales remained flat
compared to the year ago period at $211,000 per day. Net sales of the TSI
division increased $3,079,000 to $11,430,000 for the three months ended
September 30, 2000 from $8,351,000 for the same three month period last year.
This increase was primarily attributable to lower than expected sales in the
quarter ended September 30, 1999 resulting from a reduction by one of TSI's
customers of its level of purchasing during that quarter while it continued to
sell through previously purchased inventory.
12
<PAGE> 13
Gross Profit. Gross profit of the Company as a percentage of sales decreased to
$8,500,000 or 35% of net sales from $8,105,000 or 37.4% of net sales for the
three months ended September 30, 2000 compared to the same period of 1999. The
gross margin of the Craftmade division declined to $5,485,000, or 42.7% of
sales, from $5,874,000, or 44.2% of sales, in the year ago period. The decline
in the gross margin of the Craftmade division was due primarily to discounted
pricing and promotional programs designed to generate higher unit sales volume.
Gross profit from TSI was $3,015,000, or 26.4% of net sales, for the three
months ended September 30, 2000 compared to $2,230,000, or 26.7% of sales, for
the same period of the previous year.
Selling, General and Administrative Expenses. Total selling, general and
administrative expenses of the Company decreased to 21.0% of net sales for the
three months ended September 30, 2000 from 22.0% of net sales for the same three
month period last year. Total SG&A expense of the TSI division decreased to
13.4% of sales from 16.0% of sales for the same period in the previous year. The
decline in TSI's SG&A expense as a percentage of sales was partially offset by
an increase in the SG&A expense of the Craftmade division to 27.5% of net sales
from 25.8% for the same three month period last year. The increase in
Craftmade's SG&A was primarily due to the decline in sales during the first
quarter of fiscal 2001 which resulted in the de-leveraging of fixed SG&A
expenses compared to the year-ago period.
Interest Expense. Net interest expense of the Company increased $251,000 to
$589,000 for the three months ended September 30, 2000 from $338,000 for the
same three month period last year. This decrease was primarily the result of an
increase in the Company's note payable in the third quarter of fiscal 2000. The
proceeds were utilized to repurchase the Company's common stock.
Minority Interest. Minority interest of $373,000 and $344,000 for the three
months ended September 30, 2000 and 1999, respectively, represented the 50%
ownership of Prime/Home Impressions, LLC ("PHI") and Design Trends, LLC by
non-Company owned members. The non-Company owned interests have been accounted
for as a minority interest.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash increased $177,000 to $1,348,000 at September 30, 2000 from
$1,171,000 at June 30, 2000. The Company's operating activities provided cash of
$3,592,000, primarily attributable to the Company's net income from operations.
13
<PAGE> 14
The $67,000 of cash used for investing activities related to the purchase of
general warehouse, office and computer equipment.
The $3,348,000 of cash used for financing activities was primarily the result of
(i) the repurchase of 200,300 shares of the Company's common stock in connection
with the Company's stock repurchase plans, at an aggregate cost of $1,595,000,
(ii) distributions to PHI's minority interest holder of $190,000, (iii)
principal payments of $114,000 on the Company's note payable,(iv) cash dividends
of $249,000, and (v) principal payments of $1,200,000 on the Company's lines of
credit. It is management's intention to repurchase the Company's common stock
from time to time under Board approved plans as long as the Company's common
stock continues to present an attractive investment for the Company.
At September 30, 2000, subject to continued compliance with certain covenants
and restrictions, the Company had $18,250,000 available on its lines of credit,
of which $14,000,000 had been utilized. In addition, PHI had $3,000,000
available on its line of credit, of which $2,400,000 had been utilized. The
Company's management believes that its current lines of credit, combined with
cash flows from operations, are adequate to fund the Company's current operating
needs, make annual payments of approximately $1,200,000 under the note payable,
fund possible future stock repurchases and fund anticipated capital
expenditures, as well as permit the Company to continue its projected growth
over the next twelve months.
At September 30, 2000, $8,944,000 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
conducted a fixed-to-floating interest rate swap. See Note 4 - 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.
14
<PAGE> 15
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.
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 $3,942,000 at September
30, 2000. During the term of the Swap Agreement, the Company receives a fixed
rate of interest (8.125%) from Chase on such Notional Amount in consideration of
its obligation to pay a floating rate of interest on such Notional Amount. The
floating rate of interest is based on the regularly published London Interbank
Offered Rate ("LIBOR") plus 2.43%. At September 30, 2000, LIBOR was equal to
6.62%. The Swap Agreement matures on December 26, 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 interest expense would increase by
approximately $39,420. Consequently, an increase in LIBOR of five percent (5%)
would result in an estimated annualized increase of interest expense for the
Company of approximately $197,100. See Note 4 -- Derivative Financial Instrument
to the Notes to Condensed Consolidated Financial Statements.
15
<PAGE> 16
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
not applicable
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 therein.
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
therein.
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 therein.
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 therein.
16
<PAGE> 17
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 (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.
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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.
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.
18
<PAGE> 19
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 Registration Rights Agreement, dated July 1, 1998, by
and among Craftmade International, Inc., Neall and
Leslie 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.
10.15 ISDA Master Agreement and Schedule, dated June 17,
1999, by and among Chase Bank of Texas, National
Association, Craftmade International, Inc., Durocraft
International, Inc. and Trade Source International,
Inc., filed as Exhibit 10.15 to the Company's
Quarterly Report on Form 10Q filed November 12, 1999
(File No. 000-26667) and herein incorporated by
reference.
10.16 Confirmation under ISDA Master Agreement, dated July
23, 1999, from Chase Bank of Texas, National
Association to Craftmade International, Inc., filed
as Exhibit 10.165 to the Company's Quarterly Report
on Form 10Q filed November 12, 1999 (File No.
000-26667) and herein incorporated by reference.
10.17 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, C/D/R Incorporated, 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.
10.18 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 10Q filed May 15, 2000 (File
No. 000-26667) and herein incorporated by reference.
19
<PAGE> 20
10.19 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 10Q filed May 15, 2000 (File No.
000-26667) and herein incorporated by reference.
10.20 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.
10.21 Seventh Amendment to Credit Agreement dated May 12,
2000, by and among Craftmade 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.
10.22 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.
10.23 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.
27 Financial Data Schedule.
b). Reports on Form 8-K
None.
20
<PAGE> 21
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 November 8, 2000 /s/ James R. Ridings
--------------------- -------------------------------------
JAMES R. RIDINGS
President and Chief
Executive Officer
Date November 8, 2000 /s/ Kathleen B. Oher
--------------------- -------------------------------------
KATHLEEN B. OHER
Chief Financial Officer
21
<PAGE> 22
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 therein.
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 therein.
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 therein.
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 therein.
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,
</TABLE>
22
<PAGE> 23
<TABLE>
<S> <C>
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 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>
23
<PAGE> 24
<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 Registration Rights Agreement, dated July 1, 1998, by and among
Craftmade International, Inc., Neall and Leslie 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.
10.15 ISDA Master Agreement and Schedule, dated June 17, 1999, by and among
Chase Bank of Texas, National Association, Craftmade International,
Inc., Durocraft International, Inc. and Trade Source International,
Inc., filed as Exhibit 10.15 to the Company's Quarterly Report on Form
10Q filed November 12, 1999 (File No. 000-26667) and herein
incorporated by reference.
10.16 Confirmation under ISDA Master Agreement, dated July 23, 1999, from
Chase Bank of Texas, National Association to Craftmade International,
Inc., filed as Exhibit 10.165 to the Company's Quarterly Report on Form
10Q filed November 12, 1999 (File No. 000-26667) and herein
incorporated by reference.
10.17 Fourth Amendment to Credit Agreement, dated April 2, 1999, by and among
Craftmade International, Inc., a Delaware corporation, C/D/R Inc., a
Delaware corporation, Durocraft International, Inc. a
</TABLE>
24
<PAGE> 25
<TABLE>
<S> <C>
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.
10.18 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.
10.19 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.
10.20 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.
10.21 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.
10.22 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.
10.23 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.
27 Financial Data Schedule
</TABLE>
25
