Craftmade International Amends Information Related to Litex Tender Offer

COPPELL, Texas, Nov. 11, 2011 /PRNewswire/ -- The board of directors of Craftmade International, Inc. (OTCQX: CRFT) today amended and corrected certain information originally provided to shareholders in a Supplemental Disclosure issued November 4, 2011. That Supplemental Disclosure provided additional information related to the recent tender offer by Litex Industries, Limited and its subsidiary, Litex Acquisition #1, LLC, to purchase all outstanding Craftmade shares for $4.25 per share.

In the Supplemental Disclosure, the paragraph that begins with "Discounted Cash Flow Analysis." should be replaced with the following paragraph:

"Discounted Cash Flow Analysis. B. Riley performed two discounted cash flow analyses, which were designed to imply a potential value of the Company by calculating the net present value of estimated future cash flows of the Company. B. Riley performed discounted cash flow analyses for each of Craftmade's operating segments (Mass and Specialty) independently and consolidated the resulting valuations to achieve a value of the Company in total. B. Riley calculated ranges of implied equity values per share for Craftmade based on discounted cash flow analyses utilizing the projections for fiscal year 2012 through fiscal year 2015 provided by the Company for each operating segment (see section entitled "Financial Projections" for a summary of these projections). For valuation purposes B. Riley then incorporated their own projections for 2016, which were relied upon by B. Riley in performing its discounted cash flow analysis, and calculated the net present value of unlevered free cash flows for Craftmade for fiscal 2012 through fiscal year 2016. B. Riley then calculated the terminal value at the end of fiscal year 2016 by applying a range of multiples of 4.0x to 5.0x to each segment's estimated fiscal year 2016 free cash flow from operations. In arriving at these terminal multiples, B. Riley took into consideration the relative profitability and expected long-term growth of the Company, as well as overall economic factors at the time of the valuation. The determination of such multiples is based on professional judgment, and can and does change over time as these expectations and factors change. These terminal values were then discounted to present values using weighted average costs of capital ranging from 12.1% to 14.1% for the Mass segment and 13.0% to 15.0% for the Specialty segment.  These analyses yielded enterprise values ranging from $4.7 million to $5.6 million for the Mass segment and $48.5 million to $62.6 million for the Specialty segment.  While the Company's debt is not specific to an operating segment, B. Riley allocated the debt 21% to the Mass segment and 79% to the Specialty segment, based on projected revenue for each segment, which resulted in an implied equity value range of ($0.27) to ($0.11) per share for the Mass segment, and an implied equity value range of $4.30 to $6.73 per share for the Specialty segment, and a combined implied equity value range of $4.04 to $6.62 per share for the Company as a whole.  Combining both segments, B. Riley used an average fiscal 2012 debt forecast of $29.8 million to calculate the equity value for the Company. This debt forecast varied from the total debt reported by the Company as of June 30, 2011 primarily due to the Company's reduction in debt in July of 2011 as a result of the sale-leaseback of one of its facilities."

In addition to the above amendment and correction, the Company has also made available the full presentation made by B. Riley to Craftmade's board of directors on October 6, 2011 at a special meeting of the Board of Directors, which includes the projections for fiscal year 2016 prepared by B. Riley that were not included in the Supplemental Disclosure. At this meeting the Board received an opinion from B. Riley and Co., LLC. that the current offer of $4.25 is fair, from a financial point of view, to the Company's stockholders (other than Litex and its affiliates). B. Riley's presentation to the board is available at:

http://www.b2i.us/profiles/investor/fullpage.asp?BzID=602&to=cp&ID=1508&Langid=1&SiteID=0

Craftmade's board of directors would also like to reiterate that, as noted in its original letter to shareholders dated October 14, 2011, under the terms of the letter of agreement with Litex, Craftmade's board of directors can respond to any inquiries and negotiate any alternative transaction as part of its fiduciary duties.  Please refer to the original letter and the Offering Memorandum dated October 14, 2011 for additional information concerning the terms and conditions of the offer.

Founded in 1985, Craftmade International, Inc. is engaged in the design, manufacturing, distribution and marketing of a broad range of home decor products, including proprietary ceiling fans, lighting products and outdoor furniture.  The Company distributes its premium products through a network of independent showrooms and mass retail customers through its headquarters and distribution facility in Coppell, Texas and manufacturing plant in Owosso, Michigan. More information about Craftmade International, Inc. can be found at www.craftmade.com.

Various statements in this Press Release or incorporated by reference herein, in future filings with the SEC or OTCQX, in press releases, and in oral statements made by or with the approval of authorized personnel constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations and are indicated by words or phrases such as "may," "will," "should," "could," "might," "expects," "plans," "anticipates," "believes," "estimates," "projects," "predicts," "forecasts," "intends," "potential," "continue," and similar words or phrases and involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from the future results, performance or achievements expressed in or implied by such forward-looking statements.  These forward-looking statements include statements or predictions regarding among other items: revenues and profits; gross margin; customer concentration; customer buying patterns; sales and marketing expenses; general and administrative expenses; pricing and cost reduction activities; income tax provision and effective tax rate; realization of deferred tax assets; liquidity and sufficiency of existing cash, cash equivalents, and investments for near-term requirements; purchase commitments; product development and transitions; competition and competing technology; outcomes of pending or threatened litigation; and financial condition and results of operations as a result of recent accounting pronouncements.  These forward-looking statements are based largely on expectations and judgments and are subject to a number of risks and uncertainties, many of which are beyond our control.  We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SOURCE Craftmade International, Inc.