SCHEDULE 14A
(Rule 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. _________)

CRAFTMADE INTERNATIONAL, INC.

CRAFTMADE INTERNATIONAL, INC.
650 South Royal Lane, Suite 100
Coppell, Texas 75019

October 28, 2004

TO OUR STOCKHOLDERS:

You are cordially invited to attend our 2004 annual meeting of stockholders, which will be held Tuesday, November 30, 2004, at 9:00 a.m., local time, at our corporate office, 650 South Royal Lane, Suite 100, Coppell, Texas.

We hold our annual meetings at our corporate office in order to provide our stockholders an opportunity to visit our facility, meet the employees and see your company at work. We feel this is the best way for our investors to see for themselves what we are all about.

Please read these materials so that you’ll know what we plan to do at the meeting. Also, please sign and return the accompanying proxy card. This way, your shares will be voted as you direct even if you can’t attend the meeting. If you would like to attend, please see the instructions on “How to Attend the Meeting.”

/s/ James R. Ridings

James R. Ridings
Chairman of the Board

CRAFTMADE INTERNATIONAL, INC.
650 South Royal Lane, Suite 100
Coppell, Texas 75019

NOTICE OF THE 2004 ANNUAL MEETING OF STOCKHOLDERS

          The annual meeting of stockholders of Craftmade International, Inc. (the “Company”) will be held on Tuesday, November 30, 2004, at 9:00 a.m., local time, at the Company’s office at 650 South Royal Lane, Suite 100, Coppell, Texas, for the following purposes:

          Only stockholders of record at the close of business on October 29, 2004, can vote at the meeting.

          A complete list of stockholders entitled to vote at the annual meeting will be maintained at the Company’s offices at 650 South Royal Lane, Suite 100, Coppell, Texas 75019, for ten days prior to the annual meeting.

          All stockholders are cordially invited to attend the annual meeting. Whether or not you plan to attend the annual meeting in person, please complete, sign and date the enclosed proxy and return it promptly in the accompanying envelope. If you do attend the annual meeting in person, you may withdraw your proxy and vote in person. Attendance at the annual meeting is limited to stockholders, their proxies and invited guests of the Company.

By Order of the Board of Directors,

/s/ Kathleen B. Oher

Kathleen B. Oher

Coppell, Texas
October 28, 2004

Table of Contents

Craftmade International, Inc.
650 South Royal Lane, Suite 100
Coppell, Texas 75019

Proxy Statement

For Annual Meeting of Stockholders
To be Held on Tuesday, November 30, 2004

GENERAL

          The Board of Directors (the “Board”) of Craftmade International, Inc. (the “Company”) is soliciting proxies for the 2004 annual meeting of stockholders. The annual meeting will be held on Tuesday, November 30, 2004, at 9:00 a.m., local time, at the Company’s office at 650 South Royal Lane, Suite 100, Coppell, Texas. This proxy statement, the form of proxy and annual report to stockholders were first mailed to stockholders on or about November 5, 2004.

Who Can Vote

          Record holders of common stock, par value $0.01 per share (the “Common Stock”), of the Company at the close of business on October 29, 2004 (the “Record Date”), may vote at the meeting. On the Record Date, 5,080,115 shares of Common Stock were outstanding. Each stockholder has one vote for each share of Common Stock held by that stockholder.

How You Can Vote

          Shares represented by a proxy in the form provided to you with this proxy statement will be voted at the annual meeting in accordance with your directions. To be valid and counted at the annual meeting, you must sign, date and return your proxy card to us.

          If you do not specify on your proxy card how you want to vote your shares, we will vote them:

Other Matters to be Acted Upon at the Meeting

          We do not know of any other matters to be presented or acted upon at the annual meeting other than those described above. Under our Bylaws, if any other matter is presented at the meeting on which a vote may properly be taken, the shares represented by proxies in the accompanying form will be voted in accordance with the judgment of the person or persons voting those shares.

Required Votes

          A majority of the shares of Common Stock entitled to vote, present in person at the annual meeting or represented by proxy at the annual meeting, shall constitute a quorum at the annual meeting. For purposes of the quorum and the discussion below regarding the votes necessary to take stockholder action, stockholders of record who are present at the annual meeting in person or represented by proxy and who abstain, including brokers holding customers’ shares of record who cause abstentions to be recorded at the annual meeting, are considered stockholders who are present and entitled to vote, and they count toward the quorum.

          Brokers holding shares of record for customers generally are not entitled to vote on certain matters unless they receive voting instructions from their customers. “Uninstructed shares” means shares held by a broker who has not received instructions from its customers on such matters, and the broker has so notified the Company on a proxy form or has otherwise advised us that the broker lacks voting authority. “Broker non-votes” means the votes that could have been cast on the matter in question by brokers with respect to uninstructed shares if the brokers had received their customers’ instructions.

          Election of Directors. Directors are elected by a plurality of the votes of the shares represented in person or by proxy. Votes may be cast in favor of or withheld with respect to each nominee. Abstentions and broker non-votes will not be counted by us.

          Ratification of Independent Accountants. The affirmative vote of the majority of the shares present in person or represented by proxy and entitled to vote is required to ratify PricewaterhouseCoopers LLP as the Company’s independent accountants for 2005.

Revocation of Proxies

          You can revoke your proxy at any time before it is exercised in any of three ways:

How to Attend the Meeting

          We encourage all holders of Common Stock on the Record Date to attend the annual meeting. This will give you an opportunity to visit the Company’s facility, talk to management and vote your shares in person. If you are interested in attending, call our Corporate Secretary, Kathleen B. Oher, at (800) 527-2578 for directions.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

          The table below sets forth, as of October 26, 2004, the number of shares of Common Stock and the percentage of outstanding shares owned of record by (i) each incumbent director and each nominee for director of the Company; (ii) each named executive officer of the Company; (iii) all directors and named executive officers of the Company as a group; and (iv) each person who beneficially owns more than five percent of the Common Stock. Except as otherwise noted, each named individual has sole voting and investment power with respect to such shares.

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PROPOSAL ONE
ELECTION OF DIRECTORS

General

          Nine directors will be elected at this year’s annual meeting. Mr. Kimmel has notified the Company that he will not stand for re-election to the Company’s Board of Directors. In order to maintain the continuity of the Board, the Nominating and Corporate Governance Committee and the Board have decided not to nominate a director to replace Mr. Kimmel. Each director will serve until the next annual meeting and until he or she is succeeded by another director who has been duly elected and qualified.

          We will vote your shares as you specify on the enclosed proxy form. If you sign, date, and return the proxy form, but don’t specify how you want your shares voted, we will vote them for the election of all the nominees listed below. If unforeseen circumstances (such as death or disability) make it necessary for the Board of Directors to substitute another person for any of the nominees, we will vote your shares for that person. Proxies can’t be voted for the election of more than nine persons to the Board of Directors. Directors are elected by plurality vote, and cumulative voting is not permitted.

          Director Nomination Procedures. The Nominating and Corporate Governance Committee considers the appropriate balance of experience, skills and characteristics required of the Board of Directors. It seeks to ensure that at least a majority of the directors are independent under the rules of the NASDAQ Stock Market, that members of the Company’s Audit Committee meet the financial literacy requirements under the rules of the NASDAQ Stock Market, and that at least one of them qualifies as an “audit committee financial expert” under the rules of the SEC. Nominees for director are selected on the basis of their ability to bring sound business judgment to the Board’s deliberations; character and integrity; independence; ability to work with others and compatibility with other Board members; willingness and ability to devote the necessary time to the Company and Board responsibilities; community reputation and business contacts in the communities the Company serves; awareness of both the business and social environment within which the Company operates; business experience in highly competitive environments; public company experience; financial knowledge and experience; an understanding of marketing, technology, law, the impact of government regulations or other specific areas or disciplines; and any associations with organizations that have competitive lines of business or other conflicts of interest with the Company.

          All of the nominees for director are currently members of the Board of Directors. The following sets forth a brief biography describing the principal occupation and certain other information about each nominee for director. Each nominee has consented to serve as a director if elected. The following information about the nominees was provided by the nominees.

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Nominees

          James R. Ridings, age 54, has served as Chairman and Chief Executive Officer of the Company since 1986 and President since 1989. Mr. Ridings has also served as the President of Trade Source International, Inc. (“TSI”) since October 2003. Mr. Ridings has been a director of the Company since its organization in 1985 and was a Vice President from 1985 to 1986. Between 1971 and 1984, Mr. Ridings was a sales representative with Kevco, Inc., Fort Worth, Texas, and its predecessor company, a wholesale distributor of ceiling fans, plumbing supplies and mobile home accessories. Mr. Ridings was elected a director of U.S. Home Systems, Inc. on July 15, 2004. Mr. Riding’s son-in-law, Brad D. Heimann, is the Executive Vice President of the Company.

          Clifford Crimmings, age 54, has served as Vice President of Marketing of the Company since its organization in 1985 and a director since 1987. Between 1969 and 1985, Mr. Crimmings was employed as a sales representative and then as a sales manager with Kevco, Inc. and its predecessor company.

          Kathleen B. Oher, age 44, has served as Vice President, Chief Financial Officer, Secretary and a director of the Company since October 1999. Between 1995 and 1999, Ms. Oher was Director of Research and Senior Vice President of Southwest Securities, an investment banking and brokerage firm. Between 1992 and 1995, Ms. Oher was Financial and Operations Principal of Barre & Company, Inc., a regional brokerage firm acquired by Southwest Securities, Inc. in 1995. Between 1989 and 1991, Ms. Oher was an accountant for Ernst & Young LLP, a public accounting firm. Ms. Oher holds a B.S. degree in Accounting from the University of Texas at Dallas and a Masters degree in Business Administration from the Cox School of Business at Southern Methodist University in Dallas. Ms. Oher has been a Certified Public Accountant since 1992.

          John DeBlois, age 51, has served as a director of the Company since October 1998, and as Executive Vice President of TSI, a subsidiary of the Company, since July 1998. Mr. DeBlois served as Vice President of Sales of TSI California from 1987 to July 1998. In 1979, Mr. DeBlois purchased Regal-Lite Corp., a domestic lighting manufacturing company, which was merged into TSI California in 1987. Between 1978 and 1979, Mr. DeBlois served as a retail representative of Mosley, Halgarten, Eastbrook and Weedon, a regional brokerage firm. Between 1975 and 1977, Mr. DeBlois was a stockbroker for Paine Webber Group Inc. Mr. DeBlois received a B.B.A. degree in Economics from Tufts University in 1975.

          A. Paul Knuckley, age 55, has served as a director of the Company since October 1996. Mr. Knuckley has served since 1974 as President and Chief Executive Officer of Knuckley Inc., d.b.a. Ditch Witch of East Texas, and as owner and Vice-President of Witch Equipment Co., Inc. of Ft. Worth, Texas. Prior to 1974, Mr. Knuckley was employed by John Hancock Mutual Life Insurance Company as a life and health underwriter. Mr. Knuckley received a B.B.A. degree from Texas Tech University in 1971 in both Personnel and Administrative Management.

          Lary C. Snodgrass, age 55, has served as a director of the Company since October 1998. Mr. Snodgrass has been employed by Pickens, Snodgrass, Koch & Company, P.C., a public accounting firm, since 1973, serving as managing partner and president from 1980 to 1995 and as a retired partner since 2004. Between 1970 and 1973, Mr. Snodgrass was a senior accountant for Arthur Andersen & Co., an international public accounting firm. Mr. Snodgrass received a B.B.A. degree in Accounting from Texas Tech University in 1970. Mr. Snodgrass has been a Certified Public Accountant since 1972. Mr. Snodgrass currently serves as an advisory director of Chase Bank–Fort Worth Region.

          William E. Bucek, age 66, has served as a director of the Company since October 2002. Mr. Bucek is the founder of Double B Foods, Inc., a Texas corporation, serving as President from 1971 until

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1999, and currently serving as Chairman of the Board and Chief Executive Officer. Mr. Bucek has been a Director of Hill Bank & Trust, Weimar, Texas, since 1994. Mr. Bucek received a B.S. degree from Rice University in 1960.

          L. Dale Griggs, age 71, has served as a director of the Company since October 2002. Mr. Griggs is a retiree from a forty-five year banking career. Mr. Griggs served as Executive Vice President and Director of Overton Bank and Trust of Fort Worth, Texas, from 1983 through 1998 and as Executive Vice President of Frost Bank, Fort Worth, Texas, from 1998 through 2001. Mr. Griggs is currently the Director of First Security State Bank, Cranfills Gap, Texas. Mr. Griggs received a B.S. Degree in Management and Finance from Texas Christian University in Fort Worth, Texas. Mr. Griggs is also a graduate of Southwestern Graduate School of Banking of Southern Methodist University.

          R. Don Morris, age 64, has served as a director of the Company since October 2002. Mr. Morris became Senior Vice President and Chief Financial Officer of Michaels Stores, Inc. in January 1990 and in August 1990 he became an Executive Vice President. Mr. Morris retired from Michaels Stores in 1997. In 1998 he joined the Board of Directors of Jumbo Sports Inc. and served on its Audit and Compensation Committees during its time of bankruptcy. Mr. Morris graduated from Texas Tech University with an M.B.A. in 1962.

          The Board of Directors recommends a vote FOR the election of each of the nominees for director named above.

Certain Relationships and Related Transactions

          TSI leased certain office space from an affiliate of Neall Humphrey, who served as President of TSI and a Director of the Company from July 1998 until October 2003. Mr. Humphrey resigned from the Board of Directors of the Company and as President of TSI on October 17, 2003. This lease was for $7,500 per month on a month-to-month basis. The Company vacated the premises effective October 31, 2003 and the lease was terminated. The Company believes that the payments required under the lease were no less favorable than the payments that would have been required under a lease with an independent third party.

Director Compensation

          Directors who are not otherwise salaried employees of the Company are compensated by payment of $5,000 per board meeting attended in consideration for such service. Committee members are not compensated for attending committee meetings held on the same day as board meetings. Committee members are compensated $2,000 for each committee meeting attended on days when no board meeting is held. Directors who are salaried employees do not receive any additional compensation for their attendance at board meetings.

Meetings of the Board of Directors

          The Board of Directors met six (6) times during the fiscal year ended June 30, 2004. No incumbent director attended fewer than 75% of the total number of meetings of the Board of Directors and of the Board committees of which they were members during such period.

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Committees of the Board of Directors

          The Company’s Board of Directors has four (4) standing committees: Audit Committee, Compensation Committee, Nominating and Corporate Governance Committee and Qualified Legal Compliance Committee. The duties and members of these committees are as follows.

          Audit Committee. The Audit Committee has a charter adopted by the Board of Directors that sets forth its membership requirements, authority and responsibilities. The full text of the Audit Committee Charter can be found in the “Investor Relations–Governance” section of the Company’s website at www.craftmade.com. The Audit Committee is responsible for oversight of (i) the integrity of the Company’s financial statements and disclosures, (ii) the Company’s compliance with legal and regulatory requirements, (iii) the qualifications and independence of the Company’s independent auditing firm (the “External Auditors”), (iv) the performance of the Company’s internal audit function and External Auditors, (v) the Company’s internal control systems, (vi) the Company’s process for monitoring compliance with the Business Ethics Policy (“Ethics Policy”), and (vii) establishing procedures for complaints relating to accounting, internal accounting controls, and auditing matters. The Audit Committee also meets with the External Auditors and with appropriate Company financial personnel about these matters. The functions of the Audit Committee also include recommending to the Board of Directors the appointment of the External Auditors (subject to ratification by the stockholders at the annual meeting), reviewing annually the Audit Committee Charter, approving certain other types of professional service rendered to the Company by the External Auditors and considering the possible effects of such services on the independence of such public accountants. Both the internal accounting department and the External Auditors periodically meet alone with the Audit Committee and always have unrestricted access to the Audit Committee. The Audit Committee currently consists of A. Paul Knuckley, Lary C. Snodgrass, Jerry E. Kimmel, R. Don Morris, William E. Bucek and L. Dale Griggs, each of whom is an outside director. The Board of Directors has determined that all members of the Audit Committee are independent directors under the rules of the NASDAQ Stock Market and the rules and regulations of the SEC. The Board of Directors has determined that Mr. Morris qualifies as an “audit committee financial expert” under applicable SEC and NASDAQ regulations. Mr. Morris is the Chairman of the Audit Committee and five (5) meetings of the Audit Committee were held during the Company’s 2004 fiscal year.

          Compensation Committee. The Compensation Committee has a charter adopted by the Board of Directors that sets forth its membership requirements, authority and responsibilities. The full text of the Compensation Committee Charter can be found in the “Investor Relations–Governance” section of the Company’s website at www.craftmade.com. The Compensation Committee is responsible for (i) assisting the Board of Directors in the discharge of its fiduciary responsibilities relating to the fair and competitive compensation of the Company’s Chief Executive Officer and other executives and (ii) preparing an annual report on executive compensation for inclusion in the Company’s proxy statement for the annual meeting of stockholders. The Compensation Committee currently consists of Messrs. Knuckley, Snodgrass, Kimmel, Morris, Bucek and Griggs, each of whom is an outside director. The Board of Directors has determined that all members of the Compensation Committee are independent directors under the rules of the NASDAQ Stock Market and the rules and regulations of the SEC. Mr. Knuckley is the Chairman of the Compensation Committee. The Compensation Committee met one (1) time during the Company’s year ended June 30, 2004.

          Nominating and Corporate Governance Committee: The Nominating and Corporate Governance Committee consists of Messrs. Knuckley, Snodgrass, Kimmel, Morris, Bucek and Griggs, each of whom is an outside director and each of whom the Board of Directors has determined to be qualified as an independent director under the rules of the NASDAQ Stock Market and rules and regulations of the SEC.

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          The Nominating and Corporate Governance Committee has a charter adopted by the Board of Directors that sets forth its membership requirements, authority and responsibilities. The full text of the Nominating and Corporate Governance Committee Charter can be found in the “Investor Relations–Governance” section of the Company’s website at www.craftmade.com. The Nominating and Corporate Governance Committee recommends the number of board positions to be filled in accordance with the Bylaws of the Company and the persons to be nominated to serve in those positions. In this regard, the Nominating and Corporate Governance Committee considers the performance of incumbent directors in determining whether such directors should be nominated to stand for reelection. The Nominating and Corporate Governance Committee also reviews the recommendations of the Chief Executive Officer related to the appointment of executive officers and proposed personnel changes related to such officers and is responsible for conducting an annual review of the Company’s Business Ethics Policy. During 2004, the Nominating and Corporate Governance Committee held one (1) meeting. Each of the members of the Nominating and Corporate Governance Committee attended the meetings.

          The Nominating and Corporate Governance Committee will consider written proposals from stockholders for nominees for director and has adopted a policy for the consideration of such nominees. In order for a stockholder to nominate an individual to be a director of the Company, the nominating stockholder must provide the Company with timely and complete written notice of the individual to be nominated to the Company’s Board of Directors. In order to be considered timely, a nomination for the election of a director must be received at the principal executive offices of the Company no less than one hundred twenty (120) days before the anniversary date of the Company’s proxy statement released to stockholders in connection with the previous year’s annual meeting, if the election is to be at an annual meeting, or one hundred twenty (120) days before any other meeting date for an election to be held at any other meeting. A stockholder nomination for director must set forth, as to each nominee such stockholder proposes to nominate the name and business or residence address of the nominee; the class and number of shares of Common Stock of the Company which are beneficially owned by the person; the total number of shares that, to the knowledge of the nominating stockholder, would be voted for such person; and the signed consent of the nominee to serve, if elected. The notice by the nominating stockholders shall also set forth the name and residence address of the stockholder and the class and number of shares of Common Stock of the Company which are beneficially owned by the stockholder. Any such nominations should be submitted to the Nominating and Corporate Governance Committee, c/o the Corporate Secretary of the Company, 650 S. Royal Lane, Suite, 100, Coppell, TX 75019.

          The process for identifying and evaluating nominees to the Board of Directors is initiated by identifying a candidate who meets the criteria for selection as a nominee and has the specific qualities or skills being sought based on input from members of the Board of Directors. The Nominating and Corporate Governance Committee evaluates these candidates by reviewing the candidates’ biographical information and qualification and checking the candidates’ references. Qualified nominees are interviewed by at least one member of the Nominating and Corporate Governance Committee. Using the input from such interview and other information obtained by them, the Nominating and Corporate Governance Committee evaluates whether such prospective candidate is qualified to serve as a director and whether the committee should recommend to the Board of Directors that the Board nominate the prospective candidate or elect such candidate to fill a vacancy on the Board. Candidates recommended by the Nominating and Corporate Governance Committee are presented to the Board for selection as nominees to be presented for the approval of the stockholders or for election to fill a vacancy. The Committee and the Board have determined to reduce the size of the Board to nine (9) directors in order to retain continuity of the existing Board. There are no new nominees to the Board for election at the 2004 Annual Meeting of Stockholders. The committee will evaluate the size and composition of the Board prior to the 2005 Annual Meeting of Stockholders. The Company has not received any nominations for persons to serve on the Board of Directors from any stockholder of the Common Stock of the Company and has not rejected any director candidates put forward by a stockholder or group of stockholders who

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beneficially owned more than five percent (5%) of the Common Stock of the Company for at least one year at the time of the recommendation. The Company has not paid any third party a fee to assist in the process of identifying or evaluating candidates.

          Qualified Legal Compliance Committee. The Qualified Legal Compliance Committee is responsible for handling reports of evidence of a material violation of the securities laws or a breach of a fiduciary duty by the Company or its officers, directors, employees, or agents. The Qualified Legal Compliance Committee has authority and responsibility to inform the Company’s Chief Executive Officer of any report of evidence of these violations, to determine whether an investigation is necessary, and to take appropriate action to address these reports. If the committee determines that an investigation is necessary or appropriate, it has the authority to notify the Audit Committee or the full Board of Directors, initiate an investigation, and retain outside experts. At the conclusion of any such investigation, the Qualified Legal Compliance Committee may recommend an appropriate response to the evidence of a material violation and inform the Chief Executive Officer and Board of Directors of the results of the investigation and the appropriate remedial measures to be adopted. The Audit Committee serves as the Qualified Legal Compliance Committee. The Qualified Legal Compliance Committee currently consists of Messrs. Knuckley, Snodgrass, Kimmel, Morris, Bucek and Griggs. The Qualified Legal Compliance Committee meets on an as needed basis. During 2004, the Qualified Legal Compliance Committee held one organizational meeting.

Communication with Board Members

     The Board of Directors encourages open, frank, and candid communications with Company security holders. Accordingly, the Board, with the approval of the majority of independent directors, has established a process whereby security holders may communicate with the Board as a whole, or any individual member of the Board. This communication process shall be in the form of written correspondence. If a security holder desires to send a communication to the Board, or a specific Board member, the security holder must prepare the communication in written form and mail or hand deliver this communication to the following address:

ATTN: SECURITY HOLDER COMMUNICATION
Board of Directors
c/o Brad D. Heimann
Executive Vice President
Craftmade International, Inc.
650 South Royal Lane, Suite 100
Coppell, Texas 75019

     All communications so marked and received by the Company shall be recorded and maintained in a log of all correspondence sent to the Board or any individual Board member. All appropriate security holder communication addressed to the Board will be forwarded to the Nominating and Corporate Governance Committee of the Board for consideration at its next committee meeting. Appropriate security holder communications addressed to individual directors, shall be forwarded to the designated director.

Business Ethics Policy

     The Company has adopted a Business Ethics Policy, which is applicable to the directors, executive officers and all employees of the Company, including the principal executive officer, principal financial officer and controller. The Business Ethics Policy is available in the “Investor Relations – Governance” section of the Company’s website at www.craftmade.com.

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Executive Officers

     The executive officers of the Company, who are elected by the Board of Directors of the Company and serve at its discretion, are as follows:

The business experience of Mr. Ridings, Mr. Crimmings, Ms. Oher, and Mr. DeBlois is included under “Proposal One: Election of Directors — Nominees.”

     Brad D. Heimann, age 30, has served as the Executive Vice President of the Company since October 15, 2004. Mr. Heimann was a special projects manager for the Company from 1998 until 2001 and Director of Operations of the Company from 2001 until October 15, 2004. Mr. Heimann’s father-in-law is James R. Ridings, Chairman, Chief Executive, and President of the Company.

Executive Compensation

          The following table sets forth compensation awarded by the Company to its Chief Executive Officer and its four other most highly compensated executive officers (the “named executive officers”), based on salary and bonus earned, whose total compensation exceeded $100,000, rendered during the fiscal years ended June 30, 2002, 2003 and 2004.

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Summary Compensation Table

Option Exercises and Holdings

          The following table summarizes the number and value of options exercised during the fiscal year ended June 30, 2004, if any, as well as the number and value of unexercised options, as of June 30, 2004, for each of the named executive officers of the Company.

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Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option Values

Employment Contracts and Termination of Employment Arrangements

          TSI Employment Agreements. In connection with the acquisition of TSI, each of Neall W. Humphrey and John DeBlois entered into employment agreements with the Company (collectively, the “TSI Employment Agreements”), effective July 1, 1998. The terms of these employment agreements expired June 30, 2003. Mr. Humphrey resigned his positions with the Company and its subsidiaries effective October 17, 2003.

          Pursuant to the terms of the TSI Employment Agreements, Mr. Humphrey became President of TSI, and Mr. DeBlois became Executive Vice President of TSI. The term of each of the TSI Employment Agreements was initially three years, and each of the TSI Employment Agreements were extended for two additional one-year terms. Mr. Humphrey’s and Mr. DeBlois’ salaries were to be increased proportionate to any increases in the salary of the Chief Executive Officer of the Company, subject to certain conditions. In addition, Mr. Humphrey and Mr. DeBlois were entitled to receive an annual bonus based on the performance of TSI, with the standards of such bonus to be comparable to the standards concerning receipt of any bonus by the Chief Executive Officer of the Company. In addition, pursuant to the TSI Employment Agreements, Mr. Humphrey and Mr. DeBlois were entitled to certain other benefits, including an automobile and the right to participate in any stock option plan of the Company that were provided to the Company’s Chief Executive Officer. The TSI Employment Agreements also contain certain confidentiality and non-competition provisions.

          In the event that a TSI Employment Agreement had been terminated by the executive for good reason or by TSI without cause (as such terms are defined in the TSI Employment Agreements), that executive would have been entitled to receive his salary for the remainder of the term of such TSI Employment Agreement, along with (i) any accrued or unused vacation or sick leave for the calendar year and (ii) that portion of his bonus for the fiscal year during which the termination is effective, prorated through the date of termination. If a TSI Employment Agreement had been terminated by TSI for cause (as defined in the TSI Employment Agreements) or the executive had been terminated for any reason other than for good reason, that executive would have been entitled to receive his salary only through the date of termination and would not have been entitled to any bonus for the fiscal year of the termination. If a TSI Employment Agreement would have been terminated as a result of the disability of the executive, that executive would have been entitled to receive his salary through the remainder of the calendar month of termination and the period until disability insurance benefits commence. In the event of termination of a TSI Employment Agreement because of death of the executive, that executive will be entitled to receive his salary through the remainder of the calendar month of the termination, along with the executive’s

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bonus, if any, for the fiscal year during which his death occurs, prorated through the end of the calendar month during which his death occurs.

          Humphrey Severance and General Release Agreement. In connection with Neall W. Humphrey’s resignation from his positions with the Company and its subsidiaries on October 17, 2003, the Company, on the same date, entered into a Severance and General Release Agreement with Mr. Humphrey. Pursuant to this agreement Mr. Humphrey was granted severance pay equal to three months salary. Additionally, the Company and Mr. Humphrey agreed to a mutual release of any obligations that either party may have had to the other as of the date of Mr. Humphrey’s departure.

          Humphrey Transition Advisory Services Agreement. In connection with Neall W. Humphrey’s resignation from his positions with the Company and its subsidiaries on October 17, 2003, the Company, on the same date, entered into a Transition Advisory Services Agreement (the “Transition Agreement”) with RHL Ventures, LLC, a Nevada limited liability company (the “Consultant”) the principal of which is Mr. Humphrey. The Consultant, through its principal Mr. Humphrey, was required to be available for consultation as required by the Company as of October 17, 2003 through July 31st, 2004, and was required to cooperate fully with the Company by returning telephone calls within 24 hours and meeting with the Company representatives as required at mutually agreeable times. The Company paid Consultant $61,000 on January 1, 2004, $50,000 on April 1, 2004 and $50,000 on July 1, 2004, for services provided under the Transition Agreement.

          Oher Employment Agreement. Effective October 25, 1999, Kathleen Oher entered into an employment agreement with the Company (the “Oher Employment Agreement”). The term of the Oher Employment Agreement is initially three years. After the initial term, the Oher Employment Agreement will be extended for two additional one-year terms, unless Ms. Oher elects not to renew. At October 25, 2003, the Oher Employment Agreement was extended for a one-year term. Ms. Oher’s salary is to be increased proportionate to any increases in the salary of the Chief Executive Officer of the Company, subject to certain conditions. In addition, Ms. Oher will be entitled to receive an annual bonus based on the performance of the Company, with the standards of such bonus to be comparable to the standards concerning receipt of any bonus by the Chief Executive Officer of the Company. Pursuant to the Oher Employment Agreement, Ms. Oher is entitled to certain other benefits, including the right to participate in any stock option plan of the Company that is provided to the Company’s Chief Executive Officer. Ms. Oher also received a grant of options to purchase 50,000 shares of Common Stock, with an exercise price of $6.75, with such stock options vesting over five years. The Oher Employment Agreement also contains certain confidentiality and non-competition provisions.

          In the event that the Oher Employment Agreement is terminated by the executive for good reason or by the Company without cause (as such terms are defined in the Oher Employment Agreement), Ms. Oher will be entitled to receive her salary for the remainder of the term of the Oher Employment Agreement, along with (i) the value of any accrued or unused vacation or sick leave for the calendar year and (ii) that portion of her bonus for the fiscal year during which the termination is effective, prorated through the date of termination. If the Oher Employment Agreement is terminated by the Company for cause (as defined in the Oher Employment Agreement) or Ms. Oher terminates for any reason other than for good reason, Ms. Oher will be entitled to receive her salary only through the date of termination and will not be entitled to any bonus for the fiscal year of the termination. If the Oher Employment Agreement is terminated as a result of the disability of Ms. Oher, she will be entitled to receive her salary through the remainder of the calendar month of termination and the period until disability insurance benefits commence. In the event of termination of the Oher Employment Agreement because of death of Ms. Oher, she will be entitled to receive her salary through the remainder of the calendar month of the termination, along with her bonus, if any, for the fiscal year during which his death occurs, prorated through the end of the calendar month during which her death occurs. If the Oher Employment

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Agreement is terminated by either the Company or Ms. Oher for any reason within twelve months of a Change of Control of the Company (as defined in the Oher Employment Agreement), and (i) such termination occurs during the initial term of the Oher Employment Agreement, then the Company will pay Ms. Oher’s salary for the remainder of such initial term plus two times her salary, (ii) such termination occurs during the first additional year of the Oher Employment Agreement, the Company will pay Ms. Oher’s salary for the remainder of such additional year plus an amount equal to Ms. Oher’s salary, and (iii) if such termination occurs during the second additional year of the Oher Employment Agreement, the Company will pay Ms. Oher’s salary for the remainder of such second additional year.

Board Compensation Committee Report on Executive Compensation

          The Compensation Committee is responsible for reviewing and recommending compensation awards for the Company’s senior executives, including the Chief Executive Officer. The Compensation Committee currently consists of A. Paul Knuckley, Lary C. Snodgrass, Jerry E. Kimmel, L. Dale Griggs, William E. Bucek and R. Don Morris, each of whom is an outside director.

          Executive Compensation: Philosophy and Program Components. The Compensation Committee believes that the overall objective of the executive compensation program should be to encourage and reward enhancement of stockholder value. The Compensation Committee believes that the executive compensation program should be a comprehensive plan that will (i) motivate executives for long-term management of the Company resulting in increased stockholder value; (ii) reward effective management for the Company through annual performance evaluations; and (iii) attract and retain key executives through competitive salaries and other incentives. The two primary components of executive compensation are currently base salary and cash bonuses. Executives also participate in certain benefit programs available to other salaried employees.

          Base Salary and Bonus. In the fiscal year ended June 30, 2004, base salaries and bonuses for executive officers were based upon the individual’s responsibilities, experience and expected performance, taking into account, among other things, the individual’s initiative, contributions to the Company’s overall performance and handling of special projects. Base salaries for executive officers generally are reviewed periodically for possible adjustment, but are not necessarily changed that frequently.

          At various times in the past, the Company has adopted certain broad-based employee benefit plans in which the executive officers and other key management employees have been permitted to participate, including the employee’s 401(k) plan and the life and health insurance benefit plans available to all salaried employees. Benefits under these plans are not typically directly or indirectly tied to the Company’s performance.

          Chief Executive Officer Compensation. Mr. Ridings’ base salary for the fiscal year ended June 30, 2004, was increased by 4% from the prior fiscal year, from $331,115 to $ 344,360. No bonus was paid to Mr. Ridings for the fiscal year ended June 30, 2004. As with all executive officers, Mr. Ridings’ bonus compensation is linked to individual performance and the Company’s profitability.

          Within the framework described above, the Compensation Committee determines Mr. Ridings’ base salary by reviewing his individual contributions to the Company’s business, level of responsibility, and career experience. The Compensation Committee also reviews the salary structure of chief executive officers of other companies in the industry. The committee does not think narrow quantitative measures or formulas are sufficient for determining Mr. Ridings’ base salary. The committee does not give specific weights to the factors considered, but the primary factor is Mr. Ridings’ individual contributions to the business.

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          Mr. Ridings currently does not have any stock options to purchase Common Stock, and, as a result of his current ownership levels of Common Stock, it is not anticipated that he will be awarded stock options in the future. The Company plans to reserve the stock options for future issuance to the Company’s employees and other members of the Company’s management.

          Other Executive Officer Compensation. In fiscal year ended June 30, 2004, Ms. Oher, Vice President, Chief Financial Officer and Secretary of the Company, was compensated pursuant to an employment agreement with the Company. See “Employment Contracts and Termination of Employment Arrangements” above. Ms. Oher received a base salary of $198,669 for the fiscal year ended June 30, 2004, a 4% increase from $191,171 in the prior fiscal year. No bonus was paid to Ms. Oher for the fiscal year ended June 30, 2004. Mr. Crimmings, Vice President of Marketing of the Company, received a base salary of $198,695 for the fiscal year ended June 30, 2004, a 4% increase from $191,053 in the prior fiscal year. No bonus was paid to Mr. Crimmings for the fiscal year ended June 30, 2004. Mr. Deblois, Vice President of Marketing of the Company, received a base salary of $298,004 for the fiscal year ended June 30, 2004, a 4% increase from $286,541 in the prior fiscal year. No bonus was paid to Mr. Deblois for the fiscal year ended June 30, 2004.

By the Compensation Committee:

A. Paul Knuckley
Lary C. Snodgrass
Jerry E. Kimmel
L. Dale Griggs
William E. Bucek
R. Don Morris

Compensation Committee Interlocks and Insider Participation

          No member of the Compensation Committee is or has been an officer or employee of the Company or any of it subsidiaries. The members of the Compensation Committee had no other relationships with the Company requiring disclosure pursuant to Item 404 of SEC Regulation S-K. No executive officer of the Company served as a member of the Compensation Committee (or other Board committee performing similar functions or, in the absence of any such committee, the entire Board of Directors) of another corporation whose executive officer served on the Compensation Committee. No executive officer of the Company served as a director of another corporation whose executive officers served on the Compensation Committee. No executive officer of the Company served as a member of the Compensation Committee (or other board committee performing equivalent functions or, in the absence of any such committee, the entire Board of Directors) of another corporation an executive officers of which served as a Director of the Company.

Audit Committee Report

          In this section below, financial and accounting management policies and practices of the Company are described.

          Composition. The Audit Committee of the board of directors is composed of six independent directors, as defined under Rule 4200(a)(15) of the National Association of Securities Dealers’ listing standards. The Audit Committee presently consists of A. Paul Knuckley, Lary C. Snodgrass, Jerry E. Kimmel, R. Don Morris, L. Dale Griggs and William E. Bucek. The Board of Directors has adopted a written charter for the Audit Committee.

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          Responsibilities. The responsibilities of the Audit Committee include recommending to the Board of Directors an accounting firm to be engaged as the Company’s independent accountants. Management is responsible for the Company’s internal controls and financial reporting process. The independent accountants are responsible for performing an independent audit of the Company’s consolidated financial statements in accordance with auditing standards generally accepted in the United States of America and for issuing a report thereon. The Audit Committee’s responsibility is to oversee these processes.

          Review with Management and Independent Accountants. In this context, the Audit Committee has met and held discussions with management and the independent accountants. Management represented to the Audit Committee that the Company’s consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America, and the Audit Committee has reviewed and discussed the consolidated financial statements with management and the independent accountants. The Audit Committee discussed with the independent accountants matters required to be discussed by Statement on Auditing Standards No. 61, “Communication with Audit Committees.”

          The Company’s independent accountants also provided to the Audit Committee the written disclosures required by Independent Standards Board Standard No. 1, “Independent Discussions with Audit Committees,” and the Audit Committee discussed with the independent accountants, PricewaterhouseCoopers LLP, the firm’s independence.

          Summary. Based upon the Audit Committee’s discussions with management and the independent accountants and the Audit Committee’s review of the representations of management, and the report of the independent accountants to the Audit Committee, the Audit Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended June 30, 2004 as filed with the Securities and Exchange Commission.

By the Audit Committee:

William E. Bucek
L. Dale Griggs
Jerry E. Kimmel
A. Paul Knuckley
R. Don Morris
Lary C. Snodgrass

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Stock Performance Graph

          The following graph provides an indicator of and compares the percentage change of cumulative total shareholder return of the Company’s Common Stock against the cumulative total return of the Russell 2000 Index and the Nasdaq Composite Index. This graph assumes $100 was invested on June 30, 1999 in the Company’s Common Stock, the Russell 2000 Index and the Nasdaq Composite Index. Both the Russell 2000 Index and the Nasdaq Composite Index exclude the Company. This graph also assumes that the Company’s quarterly dividend was reinvested in the Company’s Common Stock.

          The historical stock price performance of the Company’s Common Stock shown on the graph above is not necessarily an indication of future stock performance.

          The Company has compared its stock price performance with that of the Russell 2000 Index as it does not believe it can reasonably identify a peer group and no comparable published industry or line-of-business index is available. The Russell 2000 Index consists of companies with market capitalization similar to that of the Company; accordingly, the Company believes the Russell 2000 Index is the best available performance comparison.

Section 16(a) Beneficial Ownership Reporting Compliance

          Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company’s directors, executive officers and beneficial owners of more than 10% of the outstanding shares of Common Stock to file with the SEC initial reports of ownership and reports of changes in ownership of Common Stock and other equity securities of the Company. A from 4 was not filed timely for R. Don Morris, William E. Bucek, and Jerry E. Kimmel for stock purchased in October 2003. A form 4 was not filed timely for John Deblois for stock sold in April 2004. Otherwise, to the Company’s knowledge, based

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solely upon its review of the copies of such forms received by it and written representations from reporting persons, the Company believes that all such reports were submitted on a timely basis during the fiscal year ended June 30, 2004.

PROPOSAL TWO
RATIFICATION OF INDEPENDENT ACCOUNTANTS

          PricewaterhouseCoopers LLP (“PWC”) has been our independent public accountants for many years. The Audit Committee and the Board believe that PWC’s long-term knowledge of the Company is invaluable. Partners and employees of the firm engaged in audits are periodically changed, providing the Company with new expertise and experience. Representatives of PWC have direct access to members of the Audit Committee and regularly attend their meetings. Representatives of PWC will attend the annual meeting to answer appropriate questions and make a statement if they desire.

Principle Accountant Fees and Services

     Aggregate fees for professional services rendered for the Company by PricewaterhouseCoopers LLP (“PricewaterhouseCoopers”) for the years ended June 30, 2004 and 2003 were:

Audit Fees. For the years ended June 30, 2004, these fees were for professional services rendered for the audits of the consolidated financial statements of the Company, reviews of the Company’s interim financial statements, reviews of filings of Forms 10-Q and 10-K with the Securities and Exchange Commission. For the years ended June 30, 2003, these fees were for professional services rendered for the audits of the consolidated financial statements of the Company, reviews of the Company’s interim financial statements, reviews of filings of Forms 10-Q and 10-K with the Securities and Exchange Commission, and the audit of one of the Company’s 50% owned limited liability companies.

Audit Related Fees. For the year ended June 30, 2004, these fees related to consultation with the Company regarding the application of generally accepted accounting principles to specific transactions and certifications required by the Sarbanes-Oxley Act. For the year ended June 30, 2003, the audit related fees were for assurance and related services related to consultations concerning responses to a comment letter from the Securities and Exchange Commission.

Tax Fees. The compliance fees paid to PricewaterhouseCoopers for the years ended June 30, 2004 and 2003 were related to the preparation of tax returns, tax planning and tax advice.

There were no other fees paid to PricewaterhouseCoopers.

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Audit Committee Pre-Approval Policies and Procedures

     The Audit Committee has adopted policies and procedures for pre-approving all audit and non-audit services performed by the Company’s independent auditor. Except as noted below, no audit services or non-audit services shall be provided to the Company by the independent auditor unless first pre-approved by the Audit Committee and unless permitted by applicable securities laws and the rules and regulations of the SEC. If the Audit Committee approves an audit service within the scope of the engagement of the independent auditor, such audit service shall be deemed to have been pre-approved.

     Pre-approval shall not be required for non-audit services provided by the independent auditor, if (i) the aggregate amount of all such non-audit services provided to the Company constitutes not more than the five percent (5%) of the total amount of revenues paid by the Company to the independent auditor during the fiscal year in which such non-audit services are provided, (ii) such non-audit services were not recognized by the Company at the time of the independent auditor’s engagement to be non-audit services, and (iii) such non-audit services are promptly brought to the attention of the Audit Committee and approved by the Audit Committee prior to the completion of the audit.

     The Audit Committee may delegate to one or more members of the Audit Committee the authority to grant pre-approval of certain non-audit services. The decision of any member to whom such authority is delegated to pre-approve non-audit services shall be presented to the full Audit Committee for its approval at its next scheduled meeting.

          The Audit Committee and the Board of Directors recommend a vote FOR PricewaterhouseCoopers LLP as independent accountants for 2005.

STOCKHOLDER PROPOSALS AND OTHER MATTERS

          Any stockholder who intends to present a proposal at the 2005 Annual Meeting of Stockholders, and who wishes to have a proposal included in the Company’s proxy statement for that meeting, must deliver the proposal to the Secretary of the Company at the Company’s executive offices in Coppell, Texas, for receipt not later than July 8, 2005. A stockholder proposal submitted outside of the processes established in Regulation 14a-8 promulgated by the Securities and Exchange Commission will be considered untimely September 21, 2005.

          The cost of soliciting proxies will be borne by the Company. In addition to solicitation by mail, certain employees of the Company, who will receive no special compensation therefor, may solicit proxies in person or by telephone or telegraph. No additional written materials besides the proxy statement have been authorized or will be employed in connection with the solicitation of proxies.

          The annual report to stockholders for the fiscal year ended June 30, 2004 is enclosed with this proxy statement. The annual report does not form any part of material for the solicitation of proxies.

By Order of the Board of Directors,

/s/ Kathleen B. Oher

Kathleen B. Oher
Secretary

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Annex A

CRAFTMADE INTERNATIONAL, INC.
Audit Committee Charter

This Audit Committee Charter (“Charter”) sets forth the purpose and membership requirements of the Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of Craftmade International, Inc. (the “Company”) and establishes the authority and responsibilities delegated to it by the Board.

     2.2.1. No director shall be considered “independent” if such director is, or at any time during the past three years was, employed by the Company or by any parent or subsidiary of the Company.

     2.2.2. No director shall be considered “independent” if such director accepted or has a Family Member who accepted any payments from the Company or any parent or subsidiary of the Company in excess of $60,000 during the current or any of the past three fiscal years, other than the following: (i) compensation for board or board committee service; (ii) payments arising solely from investments in the Company’s securities; (iii) compensation paid to a Family Member who is a non-executive employee of the Company or a parent or subsidiary of the Company; (iv) benefits under a tax qualified retirement plan, or non-discretionary compensation; or (v) loans permitted under Section 13(k) of the Securities and Exchange Act of 1934 (the “Act”).

     2.2.3. No director shall be considered “independent” if such director is a Family Member of an individual who is, or at any time during the past three years was, employed by the Company or by any parent or subsidiary of the Company as an executive officer.

     2.2.4. No director shall be considered “independent” if such director is, or has a Family Member who is, a partner in, or a controlling stockholder or an executive officer of, any organization to which the Company made, or from which the Company received, payments for property or services in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenues for that year, or $200,000 whichever is more, other than the following: (i) payments arising solely from investments in the Company’s securities; or (ii) payments under non-discretionary charitable contribution matching programs.

     2.2.5. No director shall be considered “independent” if such director of the listed Company is, or has a Family Member who is, employed as an executive officer of another entity where at any time during the past three years any of the executive officers of the listed Company serve on the compensation committee of such other entity.

     2.2.6. No director shall be considered “independent” if such director is or has a Family Member who is, a current partner of the Company’s outside auditor, or was a partner or employee of the Company’s outside auditor who worked on the Company’s audit at any time during any of the past three years.

     2.2.7. No director shall be considered “independent” if such director accepts directly or indirectly any consulting, advisory or other compensatory fee from the Company or any subsidiary thereof, other than fees received in such director’s capacity as a member of the Board, the Committee or any other Board committee.

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		o		Mark this box with an X if you have made changes to your name or address details above.

[C] Authorized Signatures - Sign Here - This section must be completed for your instructions to be executed.
Where there is more than one owner, each should sign. When signing as attorney, administrator, executor, guardian, or trustee, please add your full title as such. If executed by a corporation or partnership, the proxy should be signed in the corporate or partnership name by a duly authorized officer or other duly authorized person indicated such officer’s or other person’s title.

This Proxy is Solicited By and On Behalf of the Board of Directors
Proxy — Annual Meeting of Stockholders — November 30, 2004

The undersigned, revoking all previous proxies, hereby appoint(s) James Ridings, Kathleen Oher, and Clifford Crimmings, or any of them, Proxies, with full power of substitution to represent and to vote all shares of Common Stock, $0.01 par value, of Craftmade International, Inc. owned by the undersigned at the Annual Meeting of Stockholders to be held at the Company’s corporate office, 650 South Royal Lane, Suite 100, Coppell, Texas 75019 on Tuesday, November 30, 2004, including any original or subsequent adjournment thereof, with respect to the proposals set forth in the Notice of Annual Meeting and Proxy Statement. No business other than matters described below is expected to come before the meeting, but should any other matter requiring a vote of stockholders arise, the persons named herein will vote thereof in accordance with their best judgement. All powers may be exercised by all of said Proxies or substitutes voting or acting or, if only one votes or acts, then by that one. Receipt of the Notice of Annual Meeting and Proxy Statement is hereby acknowledged.

The shares represented by this proxy will be voted as directed. Unless revoked, this proxy shall terminate on December 1, 2004, the day after the stockholders meeting, or if the meeting is continued or adjourned, the day after the continuation or adjournment. IF NO SPECIFIC DIRECTION IS GIVEN THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED FOR THE NOMINEES NAMED IN PROPOSAL 1, FOR PROPOSAL 2 AND, IN THE DISCRETION OF THE PROXIES, UPON ANY OTHER BUSINESS.

PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY, USING THE ENCLOSED ENVELOPE.

IMPORTANT: TO BE SIGNED AND DATED ON REVERSE SIDE