<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 NOVEMBER 29, 1997 OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
------------------ TO -----------------
0-24390
Commission file number . . . . . . . . . . . . . . . . .
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 JANAURY 12, 1997
-------------- ---------------------------------------------
<S> <C>
Class A Common Stock, $.01 par value 5,863,598
Class B Common Stock, $.01 par value 4,750,026
</TABLE>
<PAGE>
TREND-LINES, INC. AND SUBSIDIARY
INDEX
Page
----
Part I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
November 29, 1997 (Unaudited) and March 1, 1997 3
Condensed Consolidated Statements of Operations
Three Months Ended and Nine Months Ended
November 29, 1997 and November 30, 1996 (Unaudited) 4
Condensed Consolidated Statements of Cash Flows
Nine Months Ended November 29, 1997 and
November 30, 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 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
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)
NOVEMBER 29, MARCH 1,
1997 1997
------------------ -----------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 279 $ 1,006
Accounts receivable, net 15,705 12,155
Inventories 88,987 85,909
Prepaid expenses and other current assets 6,372 6,462
-------- --------
Total current assets 111,343 105,532
PROPERTY AND EQUIPMENT, NET 17,694 14,753
OTHER ASSETS 634 769
-------- --------
$129,671 $121,054
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank credit facility $ 43,607 $ 25,196
Current portion of capital lease obligations 854 686
Accounts payable 32,518 43,900
Accrued expenses 6,228 5,690
-------- --------
Total current liabilities 83,207 75,472
-------- --------
CAPITAL LEASE OBLIGATIONS, NET OF CURRENT PORTION 1,235 1,875
-------- --------
DEFERRED INCOME TAX LIABILITIES 301 301
-------- --------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value
Class A-
Issued--6,348,568 and 6,302,534 shares at November 29, 1997
and March 1, 1997, respectively 63 63
Class B-
Issued and Outstanding--4,750,026 shares at November 29, 1997 and
March 1, 1997 47 47
Additional paid-in capital 41,459 41,318
Retained earnings 5,819 4,128
Less: 500,000 and 440,000 Class A shares held in treasury at
November 29,1997 and March 1, 1997, respectively, at cost (2,460) (2,150)
-------- --------
Total stockholders' equity 44,928 43,406
-------- --------
$129,671 $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-- --Nine months ended--
November 29, November 30, November 29, November 30,
1997 1996 1997 1996
------- ------- -------- --------
<S> <C> <C> <C> <C>
NET SALES $52,357 $49,100 $160,265 $145,238
COST OF SALES 36,141 33,083 108,704 97,582
------- ------- -------- --------
Gross Profit 16,216 16,017 51,561 47,656
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 13,872 14,249 46,416 44,175
------- ------- -------- --------
Income from operations 2,344 1,768 5,145 3,481
INTEREST EXPENSE, net of interest income 943 693 2,374 1,718
------- ------- -------- --------
Income before provision for income taxes 1,401 1,075 2,771 1,763
PROVISION FOR INCOME TAXES 546 435 1,080 714
------- ------- -------- --------
Net income $ 855 $ 640 $ 1,691 $ 1,049
======= ======= ======== ========
NET INCOME PER COMMON SHARE $0.08 $0.06 $0.15 $0.09
======= ======= ======== ========
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING 11,175 11,305 11,120 11,294
======= ======= ======== ========
</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>
----NINE MONTHS ENDED----
NOVEMBER 29, NOVEMBER 30,
1997 1996
------------------ -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,691 $ 1,049
Adjustments to reconcile net income to net cash used in operating activities
Depreciation and amortization 1,951 1,292
Gain on sale of property and equipment - (18)
Changes in current assets and liabilities
Accounts receivable (3,549) (3,417)
Refundable income taxes - 2,840
Inventories (3,078) (8,222)
Prepaid expenses and other current assets 89 (1,442)
Accounts payable (11,382) (4,012)
Accrued expenses 538 (489)
-------- --------
Net cash used in operating activities (13,740) (12,419)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (4,859) (2,023)
Proceeds from sale of property and equipment 9 -
(Increase) decrease in other assets 135 (312)
-------- --------
Net cash used in investing activities (4,715) (2,335)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from exercise of stock options - 10
Net borrowings under bank credit facilities 18,411 15,865
Payments on capital lease obligations (514) (417)
Proceeds from exercise of stock options 141 -
Purchases of treasury stock (310) (771)
-------- --------
Net cash provided by financing activities 17,728 14,687
-------- --------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (727) (67)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 1,006 436
-------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 279 $ 369
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for-
Interest $ 2,289 $ 1,220
======== ========
Income taxes $ 1,622 $ 170
======== ========
</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 nine months ended November 29, 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 nine months ended November 29, 1997 and November
30, 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---- ----NINE MONTHS ENDED----
NOVEMBER 29, NOVEMBER 30, NOVEMBER 29, NOVEMBER 30,
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Basic EPS
Net income $ 855 $ 640 $ 1,691 $ 1,049
Weighted average common shares
outstanding 10,589 11,014 10,581 11,035
------- ------- ------- -------
Basic EPS $ .08 $ .06 $ .16 $ .10
======= ======= ======= =======
Diluted EPS
Net income $ 855 $ 640 $ 1,691 $ 1,049
Weighted average common and
common equivalent shares
outstanding 11,175 11,305 11,120 11,294
------- ------- ------- -------
Diluted EPS $ .08 $ .06 $ .15 $ .09
======= ======= ======= =======
</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 November 29, 1997) or LIBOR plus 2.25%
(7.74% at November 29, 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. As of December
31, 1997 , the Company's revolving credit facility was amended to increase the
line of credit from $50 million to $80 million (borrowings include 50% of the
amounts reserved for outstanding letters of credit). This amendment also
extends the facility to expire on December 31, 2000.
7
<PAGE>
At November 29, 1997, the Company had approximately $43.5 million of borrowings
outstanding and approximately $1.1 million of letters of credit outstanding.
The Company had approximately $5.4 million in available borrowings under this
facility at November 29, 1997, based on the $50 million line of credit. The
maximum and average outstanding loan balances during fiscal 1997 under this
facility were $45.7 million and $38.2 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 November 29, 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 included 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 November 29, 1997, the 12 retail store locations were closed, as
anticipated when the restructuring reserve was established. For the nine months
ended November 29, 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 March 1,
1997, approximately $0.3 million 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 nine months ended November 29,1997.
As of November 29, 1997 the restructuring reserve had no remaining accrued
balance.
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.
8
<PAGE>
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 Plan became effective on
October 1, 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.
7. SUBSEQUENT EVENT
- ---------------------
On January 7, 1998 the Company entered into a definitive agreement to acquire 13
Nevada Bob's franchised golf stores located in the New England area from a
private investment partnership. The Company purchased the net assets, not
including Nevada Bob's franchise rights, for approximately $5.5 million, subject
to an adjustment for audited operating results.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
Net sales for the third quarter of fiscal 1997 increased by $3.3 million, or
6.7%, from $49.1 million for the third quarter of fiscal 1996 to $52.4 million.
Net catalog sales for the third quarter of fiscal 1997 decreased $2.0 million or
13.6%, from $14.7 million for the third quarter of fiscal 1996 to $12.7 million
for the third quarter of fiscal 1997. Net retail sales for the third quarter of
1997 increased $5.3 million or 15.4% from $34.4 million for the third quarter of
fiscal 1996 to $39.7 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 19.0% from 147 locations at the end of the third quarter of
fiscal 1996 to 175 locations at the end of the third quarter of fiscal 1997.
Comparable net store sales for Woodworkers Warehouse / Post Tool stores and Golf
Day stores for the third quarter of fiscal 1997 increased by 4.1% as compared to
the third quarter of fiscal 1996.
Net sales for the first nine months of fiscal 1997 increased by $15.1 million,
or 10.4%, from $145.2 million for the first nine months of fiscal 1996 to $160.3
million for the first nine months of fiscal 1997. Comparable net store sales
for Woodworkers Warehouse / Post Tool Stores and Golf Day for the first nine
months of fiscal 1997 increased by 10.7% as compared to the first nine months of
fiscal 1996. Catalog sales for the first nine months of fiscal 1997 decreased
$5.5 million , or 11.5%, from $48.0 million for the first nine months of fiscal
1996 to $42.5 million for the first nine months of fiscal 1997, while retail
sales increased $20.5 million, or 21.1%, as compared to the first nine 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 third quarter of fiscal 1997 increased 1.2% from $16.0
million for the third quarter of fiscal 1996 to $16.2 million for the third
quarter of fiscal 1997. As a percentage of net sales, gross profit decreased
1.6% from 32.6% of net sales for the third quarter of fiscal 1996 to 31.0% of
net sales in the third 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 nine months of fiscal 1997 increased 8.2% from $47.7
million for the first nine months of fiscal 1996 to $51.6 million for the first
nine months of fiscal 1997. As a percentage of net sales, gross profit
decreased .6% from 32.8% of net sales for first nine months of fiscal 1996 to
32.2% of net sales for the first nine months of fiscal 1997. The decrease in
the
10
<PAGE>
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.
Selling, general and administrative expenses for the third quarter of fiscal
1997 decreased 2.6%, or $.3 million from $14.2 million for the third quarter of
fiscal 1996 to $13.9 million for the third quarter of fiscal 1997. As a
percentage of net sales, selling, general and administrative expenses decreased
from 29.0% of net sales in the third quarter of fiscal 1996 to 26.5% of net
sales in the third 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.
Selling, general and administrative expenses for the first nine months of fiscal
1997 increased 5.1%, or $2.2 million, from $44.2 million for the first nine
months of fiscal 1996 to $46.4 million for the first nine months of fiscal 1997.
As a percentage of net sales, selling, general and administrative expenses
decreased 1.4% from 30.4% of net sales for the first nine months of fiscal 1996
to 29.0% of net sales for the first nine 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 third quarter
of fiscal 1997 increased by $.5 million, or 32.6%, from $1.8 million in the
third quarter of fiscal 1996 to $2.3 million in the third quarter of fiscal
1997. As a percentage of net sales, income from operations increased from 3.6%
of net sales in the third quarter of fiscal 1996 to 4.5% of net sales in the
third quarter of fiscal 1997.
As the result of the above factors income from operations for the first nine
months of fiscal 1997 increased $1.6 million, or 47.8% from $3.5 million in the
first nine months of fiscal 1996 to $5.1 million in the first nine months of
fiscal 1997. As a percent of net sales, income from operations increased 0.8%
from 2.4% of net sales in the first nine months of 1996 to 3.2% of the net sales
in the first nine months of fiscal 1997.
Interest expense, net of interest income, for the third quarter of fiscal 1997
increased by $250,000 from $693,000 in the third quarter of fiscal 1996 to
$943,000 in the third 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 nine months of fiscal
1997 increased by $656,000 from $1,718,000 in the first nine months of fiscal
1996 to $2,374,000 in the first nine months of fiscal 1997, caused by increased
borrowing.
11
<PAGE>
Liquidity and Capital Resources
- --------------------------------
The Company's working capital decreased by $2.0 million, from $30.1 million as
of March 1, 1997 to $28.1 million as of November 29, 1997. During the first
nine months of fiscal 1997, net cash used in operating activities was
approximately $13.7 million, net cash used in investing activities was
approximately $4.7 million and net cash provided by financing activities was
approximately $17.7 million. The net cash used in operating activities resulted
primarily from a $11.4 million decrease in accounts payable, a $3.5 million
increase in accounts receivable and a $3.1 million increase in inventories and
that was only partially offset by $3.6 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 nine months of fiscal 1997, the net cash provided
from financing activities was primarily attributable to $18.4 million in net
borrowings under the Company's bank credit facility, offset by $.5 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 eight stores and closed one store in the third
quarter. For fiscal 1997, the Company currently plans to open approximately 35
to 45 retail stores in addition to the 13 Nevada Bob's franchise stores,
acquired as discussed below.
On January 7, 1998 the Company entered into a definitive agreement to acquire 13
Nevada Bob's franchised golf stores located in the New England area from a
private investment partnership. The Company purchased the net assets, not
including Nevada Bob's franchise rights, for approximately $5.5 million, subject
to an adjustment for audited operating results. Total sales of the 13 stores
during 1996 were approximately $20 million.
As of December 31, 1997 , the Company's revolving credit facility was amended to
increase the line of credit from $50 million to $80 million (borrowings include
50% of the amounts reserved for outstanding letters of credit). This amendment
also extends the term of the facility to December 31, 2000. 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
- --------------------------------------------------------------------------------
12
<PAGE>
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) 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
Not applicable
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
14
<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: January 12, 1997 /s/ Stanley D. Black
____________________
Stanley D. Black
(Chief Executive Officer)
/s/ Karl P. Sniady
____________________
Karl P. Sniady
(Executive Vice President,
Chief Financial Officer)
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENT OF FINANCIAL CONDITION AT NOVEMBER
29, 1997 (UNAUDITED) AND THE RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED
NOVEMBER 29, 1997 (UNAUDITED) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 9-MOS YEAR
<FISCAL-YEAR-END> FEB-28-1998 MAR-01-1997
<PERIOD-START> MAR-02-1997 MAR-03-1996
<PERIOD-END> NOV-29-1997 MAR-01-1997
<CASH> 279 1,006
<SECURITIES> 0 0
<RECEIVABLES> 15,705 12,555
<ALLOWANCES> 0 0
<INVENTORY> 88,987 85,909
<CURRENT-ASSETS> 111,343 105,532
<PP&E> 17,694 14,753
<DEPRECIATION> 0 0
<TOTAL-ASSETS> 129,671 121,054
<CURRENT-LIABILITIES> 83,207 75,472
<BONDS> 0 0
0 0
0 0
<COMMON> 110 110
<OTHER-SE> 44,818 43,296
<TOTAL-LIABILITY-AND-EQUITY> 129,671 121,054
<SALES> 160,265 208,582
<TOTAL-REVENUES> 160,265 208,582
<CGS> 108,704 139,871
<TOTAL-COSTS> 108,704 139,871
<OTHER-EXPENSES> 46,416 61,045
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 2,374 2,355
<INCOME-PRETAX> 2,771 5,311
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 1,691 3,250
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,691 3,250
<EPS-PRIMARY> 0 0
<EPS-DILUTED> .15 .29
</TABLE>
