<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED AUGUST 30, 1997 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 0-24390
-------
TREND-LINES, INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
Massachusetts 04-2722797
-------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
135 American Legion Highway, Revere , Massachusetts 02151
- --------------------------------------------------- -----
(Address of principal executive office) (Zip Code)
(617) 853-0900
---------------------------------------------------
(Registrant's telephone number, including area code)
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 [_]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
<TABLE>
<CAPTION>
CLASS NUMBER OF SHARES OUTSTANDING SEPTEMBER 29, 1997
- -------------- -----------------------------------------------
<S> <C>
Class A Common Stock, $.01 par value 5,821,010
Class B Common Stock, $.01 par value 4,750,026
</TABLE>
<PAGE>
TREND-LINES, INC. AND SUBSIDIARY
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Part I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
August 30, 1997 (Unaudited) and March 1, 1997 3
Condensed Consolidated Statements of Operations
Three Months Ended and Six Months Ended August 30, 1997
and August 31, 1996 (Unaudited) 4
Condensed Consolidated Statements of Cash Flows
Six Months Ended August 30, 1997 and August 31, 1996 (Unaudited) 5
Notes to Condensed Consolidated Financial Statements 6-9
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 10-13
Part II - Other Information 14
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-k 15
Signatures 16
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TREND-LINES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
ASSETS
(UNAUDITED)
AUGUST 30, MARCH 1,
1997 1997
-------- --------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 227 $ 1,006
Accounts receivable, net 12,361 12,155
Inventories 80,355 85,909
Prepaid expenses and other current assets 5,973 6,462
-------- --------
Total current assets 98,916 105,532
PROPERTY AND EQUIPMENT, NET 16,261 14,753
OTHER ASSETS 688 769
-------- --------
$115,865 $121,054
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank credit facility $ 38,588 $ 25,196
Current portion of capital lease obligations 698 686
Accounts payable 24,987 43,900
Accrued expenses 5,815 5,690
-------- --------
Total current liabilities 70,088 75,472
-------- --------
CAPITAL LEASE OBLIGATIONS, NET OF CURRENT PORTION 1,479 1,875
-------- --------
DEFERRED INCOME TAX LIABILITIES 301 301
-------- --------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value-
CLASS A-
Issued--6,321,010 and 6,302,534 shares at August 30, 1997 and March 1, 1997,
respectively 63 63
CLASS B-
Issued and outstanding--4,750,026 shares at August 30, 1997 and March 1, 1997 47 47
Additional paid-in capital 41,383 41,318
Retained earnings 4,964 4,128
Less: 500,000 and 440,000 class a shares held in treasury at August 30, 1997
and March 1, 1997, respectively, at cost (2,460) (2,150)
-------- --------
Total stockholders' equity 43,997 43,406
-------- --------
$115,865 $121,054
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
TREND-LINES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except Per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------- ------------------------
AUGUST 30, AUGUST 31, AUGUST 30, AUGUST 31,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
NET SALES $50,819 $46,827 $107,908 $96,138
COST OF SALES 34,406 31,604 72,563 64,499
------- ------- -------- -------
Gross Profit 16,413 15,223 35,345 31,639
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 14,942 14,230 32,544 29,926
------- ------- -------- -------
Income from operations 1,471 993 2,801 1,713
INTEREST EXPENSE, net of interest income 778 615 1,431 1,025
------- ------- -------- -------
Income before provision for income taxes 693 378 1,370 688
PROVISION FOR INCOME TAXES 270 153 534 279
------- ------- -------- -------
Net income $ 423 $ 225 $ 836 $ 409
======= ======= ======== =======
NET INCOME PER COMMON SHARE $0.04 $0.02 $0.08 $0.04
======= ======= ======== =======
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 11,120 11,298 11,086 11,297
======= ======= ======== =======
</TABLE>
See notes to condensed consolidated financial statements
4
<PAGE>
TREND-LINES, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-----------------------------
AUGUST 30, AUGUST 31,
1997 1996
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 836 $ 409
Adjustments to reconcile net income to net cash used in operating activities-
Depreciation and amortization 1,249 831
Gain on sale of property and equipment - (18)
Changes in current assets and liabilities-
Accounts receivable (206) (1,659)
Refundable income taxes - 2,840
Inventories 5,554 (1,399)
Prepaid expenses and other current assets 489 (118)
Accounts payable (18,913) (5,636)
Accrued expenses 125 (960)
-------- -------
Net cash used in operating activities (10,866) (5,710)
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (2,766) (1,332)
Proceeds from sale of property and equipment 9 -
(Increase) decrease in other assets 81 (357)
-------- -------
Net cash used in investing activities (2,676) (1,689)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under bank credit facilities 13,392 8,686
Payments on capital lease obligations (384) (269)
Proceeds from exercise of stock options 65 -
Purchases of treasury stock (310) -
-------- -------
Net cash provided by financing activities 12,763 8,417
-------- -------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (779) 1,018
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,006 436
-------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 227 $ 1,454
======== =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for-
Interest $ 1,328 $ 536
======== =======
Income taxes $ 1,581 $ 133
======== =======
</TABLE>
See notes to condensed consolidated financial statements
5
<PAGE>
TREND-LINES, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
- ------------------------
The information set forth in these financial statements is unaudited and may be
subject to normal year end adjustments. In the opinion of management, the
information reflects all adjustments, which consist of normal recurring
accruals, that are considered necessary to present a fair statement of the
results of operations of Trend-Lines, Inc. (the Company) for the interim periods
presented. The operating results for the six months ended August 30, 1997 are
not necessarily indicative of the results to be expected for the fiscal year
ending February 28, 1998.
The financial statements presented herein should be read in conjunction with the
financial statements included in the Company's Annual Report on Form 10-K for
the year ended March 1, 1997. Certain information in footnote disclosures
normally included in financial statements have been condensed or omitted in
accordance with the rules and regulations of the Securities and Exchange
Commission.
2. EARNINGS PER SHARE DATA
- --------------------------
Net income per share for the six months ended August 30, 1997 and August 31,
1996 is computed by dividing net income by the weighted average number of shares
of common stock and common stock equivalents outstanding during the period.
Common stock equivalents are calculated using the treasury stock method and
consist of common stock issuable upon the exercise of outstanding stock options.
In February 1997, the Financial Accounting Standards Board issued SFAS No. 128,
Earnings Per Share. SFAS No. 128 establishes standards for computing and
presenting earnings per share and applies to entities with publicly held common
stock or potential common stock. This statement is effective for the fiscal
years ending after December 15, 1997 and early adoption is not permitted. When
adopted, the statement will require restatement of prior years' earnings per
share. The Company will adopt this statement for its fiscal year ending
February 28, 1998.
6
<PAGE>
Pro forma calculations of basic and diluted earnings per share as required by
SFAS No. 128 are as follows (in thousands, except per share data):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------------- ----------------------------
August 30, August 31, August 30, August 31,
1997 1996 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Basic EPS
Net income $ 423 $ 225 $ 836 $ 409
Weighted average common shares
outstanding 10,568 11,044 10,577 11,046
------- ------- ------- -------
Basic EPS $ .04 $ .02 $ .08 $ .04
======= ======= ======= =======
Diluted EPS
Net income $ 423 $ 225 $ 836 $ 409
Weighted average common and
common equivalent shares ------- ------- ------- -------
outstanding 11,120 11,298 11,086 11,297
------- ------- ------- -------
Diluted EPS $ .04 $ .02 $ .08 $ .04
======= ======= ======= =======
</TABLE>
3. BANK CREDIT FACILITY
- ------------------------
During fiscal 1996, the Company entered into a secured line of credit agreement
with a bank that expires on July 3, 1999. The facility bears interest at the
bank's reference rate plus .75% (9.0% at August 30, 1997) or LIBOR plus 2.25%
(7.63% at August 30, 1997). If for any 12 month rolling period, effective as of
March 1, 1997, the fixed charges ratio exceeds certain limits, as defined, the
bank's interest rate on the facility is decreased by .25% for the period
immediately following such rolling period. Since March 1, 1997 the Company has
exceeded the fixed charges ratio. A commitment fee of .375% per year of the
average unused commitment amount, as defined, is payable monthly. Effective
June 16, 1997 the Company's revolving credit facility line of credit was
increased from $40 million to $50 million (borrowings include amounts reserved
for outstanding letters of credit and a foreign exchange facility). Borrowings
are based on a formula related to inventory levels, as defined.
At August 30, 1997, the Company had approximately $38.6 million of borrowings
outstanding and approximately $.8 million of letters of credit outstanding. The
Company had approximately
7
<PAGE>
$10.6 million in available borrowings under this facility at August 30, 1997,
based on the $50 million line of credit. The maximum and average outstanding
loan balances during fiscal 1997 under this facility were $39.1 million and
$35.4 million, respectively. The bank has a security interest in substantially
all assets of the Company. The bank credit facility agreement contains certain
restrictive covenants, including, but not limited to, maintenance of certain
levels of tangible net worth, interest coverage ratio's and limitations on
capital expenditures. The Company was in compliance with all bank covenants at
August 30, 1997.
4. Restructuring Charge
- ------------------------
In the fourth quarter of fiscal 1995, the Company recorded a restructuring
charge of approximately $1.4 million, representing the costs associated with
reorganizing its operations. These costs include a $954,000 charge for the rent
and related expenses for closing 12 retail store locations and the severance and
related benefits for terminated employees. Additionally, $443,000 was charged
for the consolidation of the Company's distribution centers.
As of August 30, 1997, the 12 retail store locations were closed, as anticipated
when the restructuring reserve was established. For the six months ended August
30, 1997, approximately $0.1 million was charged against the restructuring
reserve for store closing related activities and approximately $0.2 million
associated with the consolidation of the Company's distribution centers were
also charged against the restructuring reserve. As of August 30, 1997 and March
1, 1997, approximately $0.1 million and $0.3 million, respectively, of
restructuring costs are included in accrued expenses in the accompanying
consolidated balance sheets. There were no non-cash adjustments to the accrual
during the six months ended August 30,1997.
5. TREASURY STOCK
- ------------------
On August 15, 1996, the Company's Board of Directors approved a stock repurchase
plan, whereby the Company may purchase up to 500,000 shares of common stock at
fair market value, to be used for future stock option programs, investment and /
or other corporate purposes. As of April 15, 1997, the Company had purchased
500,000 shares of Class A common stock for approximately $2.5 million, which
completed the stock repurchase plan.
6. EMPLOYEE BENEFIT PLANS
- --------------------------
On July 15, 1997 the Company's Board of Directors approved an Employee Stock
Purchase Plan under which eligible employees of the Company would have the
opportunity to purchase without commissions shares of the Company's Class A
Common Stock through payroll deductions up to 10% of their base pay
compensation. Under the Plan, stock will be purchased from the Company, in open
market transactions or a combination thereof. The maximum number of
8
<PAGE>
shares that can be purchased under the Plan by all employees of the Company, as
a group, is 250,000. The Plan will become operative in October, 1997.
At the Company's Annual Meeting of stockholders held July 15,1997,stockholders
approved an amendment to the Company's 1993 Employee Stock Option Plan to
increase the total number of shares of the Company's Class A Common Stock from
1,275,000 to 1,525,000 for issuance thereunder. On July 15, 1997, the Company's
Board of Directors also authorized the grant of an aggregate of 91,300 incentive
stock options under the Company's 1993 Employee Stock Option Plan. These grants
were made primarily to store management and office personnel.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
Net sales for the second quarter of fiscal 1997 increased by $4.0 million, or
8.5%, from $46.8 million for the second quarter of fiscal 1996 to $50.8 million.
Net catalog sales for the second quarter of fiscal 1997 decreased $2.7 million
or 18.8%, from $14.4 million for the second quarter of fiscal 1996 to $11.7
million for the second quarter of fiscal 1997. Net retail sales for the second
quarter of 1997 increased $6.7 million or 20.7% from $32.4 million for the
second quarter of fiscal 1996 to $39.1 million. The decrease in net catalog
sales was primarily attributable to the Company's opening of retail stores in
areas previously only served by its catalogs. The revenue growth of retail
stores is attributable to the maturation and expansion of the Company's retail
store base. The store base expanded over 15.9% from 145 locations at the end of
the second quarter of fiscal 1996 to 168 locations at the end of the second
quarter of fiscal 1997. Also, comparable net store sales for Woodworkers
Warehouse / Post Tool stores and Golf Day stores for the second quarter of
fiscal 1997 increased by 11.6% as compared to the second quarter of fiscal 1996.
Net sales for the first six months of fiscal 1997 increased by $11.8 million, or
12.3%, from $96.1 million for the first six months of fiscal 1996 to $107.9
million for the first six months of fiscal 1997. Comparable net store sales for
Woodworkers Warehouse / Post Tool Stores and Golf Day for the first six months
of fiscal 1997 increased by 14.3% as compared to the first six months of fiscal
1996. Catalog sales for the first six months of fiscal 1997 decreased $3.5
million , or 10.5%, from $33.3 million for the first six months of fiscal 1996
to $29.8 million for the six months of fiscal 1997, while retail sales increased
$15.3 million, or 24.4%, as compared to the first six months of fiscal 1996.
The decrease in net catalog sales was primarily attributable to the Company's
opening of retail stores in areas previously only served by its catalog. The
revenue growth of retail stores is attributed to the maturation and expansion of
the Company's retail base.
Gross profit for the second quarter of fiscal 1997 increased 7.8% from $15.2
million for the second quarter of fiscal 1996 to $16.4 million for the second
quarter of fiscal 1997. As a percentage of net sales, gross profit decreased
from 32.5% of net sales for the second quarter of fiscal 1996 to 32.3% of net
sales in the second quarter of fiscal 1997. The decrease in the Company's gross
profit percentage is primarily the result of the Company's changing sales mix,
which is caused by the increase in retail sales as a percentage of total sales
(retail store sales generally have lower overall gross margins than catalog
sales).
Gross profit for the first six months of fiscal 1997 increased 11.7% from $31.6
million for the first six months of fiscal 1996 to $35.3 million for the first
six months of fiscal 1997. As a percentage of net sales, gross profit decreased
.1% from 32.9% of net sales for first six months of fiscal 1996 to 32.8% of net
sales for the first six months of fiscal 1997. The decrease in the Company's
gross profit percentage was primarily the result of the Company's changing sales
mix, which is caused by the increase in retail sales as a percentage of total
sales.
10
<PAGE>
Selling, general and administrative expenses for the second quarter of fiscal
1997 increased 5.0%, or $.7 million from $14.2 million for the second quarter
of fiscal 1996 to $14.9 million for the second quarter of fiscal 1997. As a
percentage of net sales, selling, general and administrative expenses decreased
from 30.4% of net sales in the second quarter of fiscal 1996 to 29.4% of net
sales in the second quarter of fiscal 1997. The decrease in selling, general
and administrative expenses as a percentage of net sales is primarily
attributable to the maturation of the store sales base (and associated
comparable store sales gains), as well as lower operating costs of retail stores
as compared to the catalog business. The dollar increases in selling, general
and administrative expenses are primarily related to the Company's continuing
retail expansion.
Selling, general and administrative expenses for the first six months of fiscal
1997 increased 8.7%, or $2.6 million, from $29.9 million for the first six
months of fiscal 1996 to $32.5 million for the first six months of fiscal 1997.
As a percentage of net sales, selling, general and administrative expenses
decreased .9% from 31.1% of net sales for the first six months of fiscal 1996 to
30.2% of net sales for the first six months of fiscal 1997. The dollar
increases in selling, general and administrative expenses are primarily related
to the Company's continuing retail expansion.
As the result of the above factors, income from operations for the second
quarter of fiscal 1997 increased by $.5 million, or 48.1%, from $1.0 million in
the second quarter of fiscal 1996 to $1.5 million in the second quarter of
fiscal 1997. As a percentage of net sales, income from operations increased
from 2.1% of net sales in the second quarter of fiscal 1996 to 2.9% of net sales
in the second quarter of fiscal 1997.
As the result of the above factors income from operations for the first six
months of fiscal 1997 increased $1.1 million, or 63.6% from $1.7 million in the
first six months of fiscal 1996 to $2.8 million in the first six months of
fiscal 1997. As a percent of net sales, income from operations increased 0.8%
from 1.8% of net sales in the first six months of 1996 to 2.6% of the net sales
in the first six months of fiscal 1997.
Interest expense, net of interest income, for the second quarter of fiscal 1997
increased by $163,000 from $615,000 in the second quarter of fiscal 1996 to
$778,000 in the second quarter of fiscal 1997. The increase in interest expense
is attributable to the increase in the Company's borrowings under its bank
credit facility.
Interest expense, net of interest income, for the first six months of fiscal
1997 increased by $406,000 from $1,025,000 in the first six months of fiscal
1996 to $1,431,000 in the first six months of fiscal 1997, caused by increased
borrowing.
Liquidity and Capital Resources
- --------------------------------
The Company's working capital decreased by $1.3 million, from $30.1 million as
of March 1, 1997 to $28.8 million as of August 30, 1997. During the first six
months of fiscal 1997, net cash
11
<PAGE>
used in operating activities was approximately $10.9 million, net cash used in
investing activities was approximately $2.7 million and net cash provided by
financing activities was approximately $12.8 million. The net cash used in
operating activities resulted primarily from a $18.9 million decrease in
accounts payable that was only partially offset by a $5.6 million decrease in
inventories and $2.1 million provided by net income and depreciation. The net
cash used in investing activities was primarily related the purchase of property
and equipment required for the Company's retail expansion. During the first six
months of fiscal 1997, the net cash provided from financing activities was
primarily attributable to $13.4 million in net borrowings under the Company's
bank credit facility, offset by $.4 million in payments under capital leases.
The Company anticipates that in fiscal 1997, it will continue to invest in
leasehold improvements and equipment to support its retail store expansion
plans. In addition, the Company's expansion plans will require the use of cash
to fund increased inventories associated with the operation of additional retail
stores. The Company opened twelve stores and closed two stores in the second
quarter. For fiscal 1997, the Company currently plans to open approximately 40
to 50 retail stores.
Effective June 16, 1997 the Company's revolving credit facility line of credit
was increased from $40 million to $50 million. The Company believes that the
cash generated from operating activities, trade credit and available bank
borrowings will be sufficient to fund its operations and its retail store
expansion program for the next twelve months.
Impact of Inflation
- -------------------
The Company does not believe that inflation has had a material impact on its net
sales or results of operations.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995
- --------------------------------------------------------------------------------
Statements included in this report that do not relate to present or historical
conditions are "forward-looking statements" within the meaning of the Safe
Harbor provisions of the Private Securities Litigation Reform Act of 1995.
Additional oral or written forward-looking statements may be made by the Company
from time to time, and such statements may be included in documents other than
this report that are filed with the Securities and Exchange Commission. Such
forward-looking statements involve risks and uncertainties that could cause
results or outcomes to differ materially from those expressed in such forward-
looking statements. Forward-looking statements in this report and elsewhere may
include without limitation, statements relating to the Company's plans,
strategies, objectives, expectations, intentions and adequacy of resources and
are intended to be made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Words such as "believes,"
"forecasts," "intends," "possible," "expects," "estimates," "anticipates," or
"plans" and similar expressions are intended to identify forward-looking
statements. Investors are cautioned that such forward-looking statements
involve risks and uncertainties including without limitation the following: (i)
12
<PAGE>
the Company's plans, strategies, objectives, expectations and intentions are
subject to change at any time at the discretion of the Company; (ii) the
Company's ability to open the planned number of stores will depend upon a number
of other factors, including securing desirable locations, negotiating leases
with acceptable terms, and hiring, training and retaining qualified personnel;
(iii) the Company's plans and results of operations will be affected by the
Company's ability to manage its growth and inventory; (iv) the Company's tool
and golf businesses are highly competitive and the entrance of new competitors
into or the expansion of the operations by existing competitors in the Company's
markets and other changes in the tool or golf retail climate could adversely
affect the Company's plans and results of operations; and (v) other risks and
uncertainties indicated from time to time in the Company's filings with the
Securities and Exchange Commission.
13
<PAGE>
TREND - LINES, INC. AND SUBSIDIARY
Part II - Other Information
Item 1. Legal Proceedings
Not applicable
Item 2. Changes in Securities
Not applicable
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a vote of Security Holders
The Annual Meeting of Stockholders was held July 15, 1997. Proxies
for the Annual Meeting were solicited pursuant to Section 14 of
the Securities Exchange Act of 1934, as amended and regulations
promulgated thereunder.
At the Annual Meeting, a total of 3,743,345 shares of Class A
Common Stock and 4,750,026 shares of Class B Common Stock were
represented by proxy. Each share of Class A Common Stock has one
vote per share and each share of Class B Common Stock has 10 votes
per share. The shares represented were voted in the following
manner upon the proposal put forth at the meeting:
<TABLE>
<CAPTION>
Broker
For Withheld Non Vote
<S> <C> <C> <C> <C>
To elect Messrs. Stanley D. Black, Richard
Griner, Karl P. Sniady, Ronald L. Franklin,
Richard A. Mandell and Irwin Winter as
directors of the Company.
Class A shares 3,294,334 46,651 N/A
to
57,151
Class B shares 4,750,026 -0- N/A
</TABLE>
<TABLE>
<CAPTION>
Broker
For Against Abstain Non Vote
<S> <C> <C> <C> <C>
To amend the Company's 1993 Employee
Stock Option Plan to increase the total
number of shares of the Company's Class A
Common Stock from 1,275,000 to 1,525,000
for issuance thereunder.
Class A shares 1,782,119 298,307 30,859 1,240,200
Class B shares 4,750,026 -0- -0- -0-
</TABLE>
14
<PAGE>
Part II - Other Information (Continued)
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits - not applicable
(b) Reports on Form 8-K - not applicable
15
<PAGE>
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.
TREND-LINES, INC
-----------------
Registrant
Date: October 3, 1997 /s/ Stanley D. Black
_________________________
Stanley D. Black
(Chief Executive Officer)
/s/ Karl P. Sniady
___________________
Karl P. Sniady
(Executive Vice President,
Chief Financial Officer)
16
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF FINANCIAL CONDITION AT AUGUST 30,
1997 (UNAUDITED) AND THE RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED AUGUST
30, 1997 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 6-MOS YEAR
<FISCAL-YEAR-END> FEB-28-1998 MAR-01-1997
<PERIOD-START> MAR-02-1997 MAR-03-1996
<PERIOD-END> AUG-30-1997 MAR-01-1997
<CASH> 227 1,006
<SECURITIES> 0 0
<RECEIVABLES> 12,361 12,555
<ALLOWANCES> 0 0
<INVENTORY> 80,355 85,909
<CURRENT-ASSETS> 98,916 105,532
<PP&E> 16,261 14,753
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 115,865 121,054
<CURRENT-LIABILITIES> 70,088 75,472
<BONDS> 0 0
0 0
0 0
<COMMON> 110 110
<OTHER-SE> 43,887 43,296
<TOTAL-LIABILITY-AND-EQUITY> 115,865 121,054
<SALES> 107,908 208,582
<TOTAL-REVENUES> 107,908 208,582
<CGS> 72,563 139,871
<TOTAL-COSTS> 72,563 139,871
<OTHER-EXPENSES> 32,544 61,045
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 1,431 2,355
<INCOME-PRETAX> 1,370 5,311
<INCOME-TAX> 534 2,061
<INCOME-CONTINUING> 836 3,250
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 836 3,250
<EPS-PRIMARY> .08 .29
<EPS-DILUTED> 0 0
</TABLE>
