COPPELL, Texas, Jan. 15 /PRNewswire-FirstCall/ -- Craftmade International, Inc. (OTCQX: CRFT) ("Craftmade" or the "Company") today announced that it recently received an unsolicited and conditional proposal from Litex Industries, Limited ("Litex") to acquire the Company for $3.25 per share in cash. After due consideration of the proposal, the Board of Directors unanimously rejected the proposal and determined that the proposal significantly undervalues Craftmade and is not in the best interests of Craftmade stockholders. Prior to the issuance of Litex's press release dated today regarding the proposal, the Company advised Litex representatives in person that the Company is not for sale and the Board is not interested in pursuing the proposal. Therefore, Litex's statement in its press release that it is very confident that a transaction can be consummated is without foundation.
Upon emerging from its exploration of Strategic Alternatives in 2007, the Company committed to a strategic plan that involved, among other things, pursuing strategic value-creating acquisitions. Most recently, the acquisition and integration of the assets of Woodard, LLC in 2008 provided the Company with a solid diversification platform and gave the Company an operational scale that has helped it mitigate losses during this economic downturn, and ultimately resulted in growth of Company revenue to its largest ever of approximately $150 million dollars for its fiscal year ended June 30, 2009.
The Board has been pleased with the execution of the Company's strategic plan while facing the most challenging economic climate in the Company's history, and continues to believe the Company provides a good framework for absorption of other acquisition opportunities as well as organic growth which will result in significant stockholder return.
"Craftmade has been looking closely at all aspects of its operations, and has made many changes in recent months to create the most efficient business possible during these difficult economic times," commented J. Marcus Scrudder, Craftmade's Chief Executive Officer. Mr. Scrudder continued, "We believe the Company is weathering the worst of the economic storm and is well positioned to benefit from renewed economic growth in the future. Generally, the bottom of a market is not the best time to try and monetize an investment made earlier at a higher basis."
Craftmade's Board believes that the proposal, which reflects a marginal premium above recent trading values, represents an opportunistic action on the part of Litex to capitalize on the down housing market and Craftmade's limited trading volume. Craftmade's common stock has traded above the $3.25 per share price as recently as October 19, 2009. Craftmade believes that Litex's offer is an attempt to capture substantial value that properly belongs to Craftmade's stockholders. Litex's proposal is conditioned on cancellation of Craftmade's stockholder rights plan and completion of due diligence. Craftmade's stockholder rights plan is intended to guard against a potential takeover of Craftmade by Litex or any other entity without paying all stockholders full and fair value.
"We certainly understand the appeal of our business and fully appreciate the value and benefits our attractive product lines and distribution channels would offer to Litex's owners," commented James R. Ridings, Craftmade's founder and Chairman of the Board. "However, the Board's job is to maximize value for Craftmade's stockholders, and we believe that the quality of our management team, the power of our brands and strength of our market positions continue to provide the best avenue for growth as an independent entity."
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 Securities and Exchange Commission, 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 the Company's control. Significant factors that cause the Company's actual results to differ materially from its expectations are described in the Company's Form 10-K under the heading of "Risk Factors." The Company undertakes no obligation to publicly update or revise these Risk Factors or any forward-looking statements, whether as a result of new information, future events or otherwise.
SOURCE Craftmade International, Inc.