<PAGE>   1
================================================================================

                                  UNITED STATES
                       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 March 29, 1997

                                       OR

                  [  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                           OF THE SECURITIES AND EXCHANGE ACT OF 1934

               For the transition period from _______ to _________

                         Commission File Number: 0-25038

                                ----------------


                               THOMPSON PBE, INC.
             (Exact name of Registrant as specified in its charter)


         DELAWARE                                      95-4215913
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
 incorporation or organization)


                         4553 GLENCOE AVENUE, SUITE 200
                        MARINA DEL REY, CALIFORNIA 90292
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (310) 306-7112


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 as the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past ninety days.

                                    YES X   NO
                                       ---    ---

As of May 9, 1997, there were 8,645,084 shares of common stock outstanding.



Total number of sequential pages:     35
                                     ----

================================================================================

                                        1

<PAGE>   2

                          PART I. FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                               THOMPSON PBE, INC.
                      CONSOLIDATED CONDENSED BALANCE SHEETS
                                 (in thousands)

                                     ASSETS

<TABLE>
<CAPTION>
                                                                                March 31,   September 30,
                                                                                  1997          1996
                                                                               ---------    -------------
                                                                              (unaudited)
<S>                                                                             <C>            <C>      
Current assets:
  Cash ....................................................................     $      74      $     482
  Accounts receivable (net of allowances
   of $1,048 and $1,018) ..................................................        20,011         19,741
  Inventory ...............................................................        32,153         31,440
  Prepaid expenses and other current assets ...............................         4,443          4,505
  Income tax refund receivable ............................................         1,435          1,435
  Deferred income taxes ...................................................         1,485          1,485
                                                                                ---------      ---------
   Total current assets ...................................................        59,601         59,088

Property and equipment, net ...............................................         7,837          7,430
Intangible assets, net ....................................................        62,032         57,403
Other assets ..............................................................           303            459
                                                                                ---------      ---------
                                                                                $ 129,773      $ 124,380
                                                                                =========      =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Current portion of long-term debt and obligations .......................     $   8,021      $   7,013
  Accounts payable ........................................................        20,644         13,280
  Accrued expenses and other current liabilities ..........................         7,018          8,546
                                                                                ---------      ---------
   Total current liabilities ..............................................        35,683         28,839

Long-term debt and obligations, net .......................................        42,671         44,307

Stockholders' equity:
  Common stock ............................................................             9              9
  Additional paid-in capital ..............................................        61,121         61,479
  Accumulated deficit .....................................................        (9,711)       (10,254)
                                                                                ---------      ---------

   Total stockholders' equity .............................................        51,419         51,234
                                                                                ---------      ---------
                                                                                 $ 129,773      $ 124,380
                                                                                 =========      =========
</TABLE>


     See accompanying notes to consolidated condensed financial statements.




                                        2

<PAGE>   3
                               THOMPSON PBE, INC.
                   CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                    (in thousands, except per share amounts)
                                   (unaudited)


<TABLE>
<CAPTION>
                                                       Three Months Ended      Six Months Ended
                                                           March 31,                March 31,
                                                     ---------------------     ------------------
                                                      1997        1996         1997        1996
                                                      -------     -------     -------     -------
<S>                                                   <C>         <C>         <C>         <C>    
Net sales .......................................     $51,441     $41,981     $99,209     $79,126
Cost of sales ...................................      33,727      26,479      64,300      49,678
                                                      -------     -------     -------     -------
Gross profit ....................................      17,714      15,502      34,909      29,448
                                                      -------     -------     -------     -------
Selling, general and administrative expenses ....      14,806      12,231      29,374      23,449
Depreciation ....................................         545         436       1,032         855
Amortization of intangible assets ...............         735         525       1,442       1,008
Interest expense ................................       1,055         542       2,102         886
                                                      -------     -------     -------     -------
      Total .....................................      17,141      13,734      33,950      26,198
                                                      -------     -------     -------     -------
Income before provision for income taxes ........         573       1,768         959       3,250
Provision for income taxes ......................         252         734         416       1,349
                                                      -------     -------     -------     -------
Net income ......................................     $   321     $ 1,034     $   543     $ 1,901
                                                      =======     =======     =======     =======
Per Share Data:
Net income per common and common
  equivalent share ..............................     $  0.04     $  0.12     $  0.06     $  0.21

Weighted average common and
  common equivalent shares ......................       8,693       8,903       8,732       8,861
</TABLE>



     See accompanying notes to consolidated condensed financial statements.


                                        3

<PAGE>   4
                               THOMPSON PBE, INC.
                 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

<TABLE>
<CAPTION>
                                                           Six Months Ended
                                                               March 31,
                                                        ----------------------- 
                                                          1997           1996
                                                        --------       --------
<S>                                                      <C>           <C>     
Cash flows from operating activities:
Net income .........................................     $    543      $  1,901
Adjustments to reconcile net income to net cash
provided by operating activities:
  Depreciation and amortization ....................        2,474         1,863
  Changes in operating assets and liabilities ......        4,541        (5,697)
                                                         --------      --------
Net cash provided by (used for) operating 
  activities .......................................        7,558        (1,933)
                                                         --------      --------
Cash flows from investing activities:
Purchases of property and equipment ................       (1,168)         (994)
Cash paid to acquire companies .....................       (4,870)      (11,064)
Increase in other assets ...........................           10           (26)
                                                         --------      --------
Net cash used for investing activities .............       (6,028)      (12,084)
                                                         --------      --------
Cash flows from financing activities:
Net borrowings under line of credit ................          190        16,092
Payment of financing fees and costs ................         (150)           --
Repayment of long term debt and obligations ........       (1,826)      (34,431)
Proceeds from payment of notes due from officer.....          146            --
Repurchase of common stock .........................         (426)           --
Net proceeds from issuance of common stock .........          128        33,225
                                                         --------      --------
Net cash provided by (used for) financing activities       (1,938)       14,886
                                                         --------      --------
Net increase (decrease) in cash ....................         (408)          869
Cash, beginning of period ..........................          482           665
                                                         --------      --------
Cash, end of period ................................     $     74      $  1,534
                                                         ========      ========
</TABLE>



     See accompanying notes to consolidated condensed financial statements.


                                        4

<PAGE>   5

                               THOMPSON PBE, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

1.  GENERAL

    The consolidated condensed financial statements include the accounts of
Thompson PBE, Inc. and its wholly-owned subsidiaries (collectively, the
"Company"). All significant intercompany balances and transactions have been
eliminated in consolidation. The interim consolidated condensed financial
statements are unaudited. In the opinion of management, such financial
statements include all adjustments, consisting of only normal recurring
entries, necessary for a fair presentation of the Company's financial position,
results of operations and cash flows. These consolidated condensed financial
statements and the accompanying notes should be read in conjunction with the
audited consolidated financial statements and the accompanying notes for the
fiscal year ended September 30, 1996 included in the Company's Annual Report on
Form 10-K. The results of operations for the three-month and six-month periods
presented are not necessarily indicative of results that may be expected for the
full year.

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

    Change of Fiscal Year - The Company changed its fiscal year end from
September 30 of each year to a 52/53 week fiscal year that ends on the Saturday
closest to September 30 of each year. The change became effective for the 1997
fiscal year which began on October 1, 1996 and which will end on September 27,
1997. For simplicity of presentation, the Company has described the thirteen
weeks and twenty-six weeks ended March 29, 1997 as the three months and six 
months ended March 31, 1997.

3.  COMPUTATION OF EARNINGS PER SHARE

    Net income per share information is computed using the weighted average
number of shares of common stock outstanding and dilutive common equivalent
shares from stock options and warrants using the treasury stock method. Under
this method, primary net income per share is computed as if options and warrants
were exercised at the beginning of the period (or at time of issuance, if later)
and as if the funds obtained thereby were used to purchase common stock at the
average fair value per common share during the period.

4.  STATEMENTS OF CASH FLOWS

    Increases (decreases) in operating cash flows arising from changes in
operating assets and liabilities, net of the effect of businesses acquired,
consist of the following (in thousands):

<TABLE>
<CAPTION>
                                                Six Months Ended
                                                     March 31,
                                              ---------------------
                                                1997         1996
                                              -------      -------
<S>                                           <C>          <C>     
Accounts receivable .....................     $   499      $  (286)
Inventory ...............................        (276)      (5,294)
Prepaid expenses and other current assets          66         (533)
Accounts payable ........................       5,459        1,188
Accrued expenses and other liabilities ..      (1,207)        (772)
                                              -------      -------
                                              $ 4,541      $(5,697)
                                              =======      =======
</TABLE>


    Cash paid for interest during the six months ended March 31, 1997 and 1996,
was $2,075,000 and $767,000, respectively. Cash paid for income taxes during the
six months ended March 31, 1997 and 1996 was $603,000 and $1,204,000,
respectively. Cash paid for income taxes during the six months ended March 31,
1997 included income tax liabilities assumed in connection with the acquisition
of several business in 1996.



                                        5

<PAGE>   6

                               THOMPSON PBE, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


5.  ACQUISITIONS OF COMPANIES

    The Company acquired two businesses during the three months ended 
December 31, 1996. The businesses acquired, the date of acquisition and the 
geographic locations of the acquired businesses are as follows:

Northern California Division
----------------------------
J & M Paint Incorporated       December 1996        San Leandro, California

Northeast  Division
-------------------
Auto Body Supply Corporation   October 1996         Boston, Massachusetts

The acquired companies operated two distribution sites prior to their 
acquisition by the Company, with historical annual revenues totaling 
approximately $8 million.


6.  LONG-TERM DEBT AND OBLIGATIONS

    Long-term debt and obligations consist of the following (in thousands):

<TABLE>
<CAPTION>
                                                             March 31,  September 30,
                                                               1997         1996
                                                             ---------  ------------
<S>                                                            <C>         <C>    
1995 Credit Agreement with Heller Financial, Inc., as
 agent and lender ........................................     $37,599     $36,855
Obligations under various covenant not to
   compete agreements ....................................         301         340
Notes payable to sellers and capital lease obligations ...      12,792      14,125
                                                               -------     -------
Total long-term debt and obligations .....................      50,692      51,320
Less current portion of long-term debt and obligations ...       8,021       7,013
                                                               -------     -------
Total long-term debt and obligations, less current portion     $42,671     $44,307
                                                               =======     =======
</TABLE>

     At March 31, 1997 the Company had outstanding $37.6 million under its
credit agreement with Heller Financial, Inc. as agent and lender (as amended to
date, the "1995 Credit Agreement"). Borrowings under the 1995 Credit Agreement
are secured by substantially all of the Company's assets, and such agreement
contains significant restrictive covenants which, among other things, require
the Company to maintain certain financial ratios and which limit capital
expenditures, the incurrence of indebtedness and the payment of cash dividends.
Certain of the financial covenant ratios and certain other provisions of the
1995 Credit Agreement were amended effective September 30, 1996. Effective
January 1, 1997, the Company and the banks participating in the 1995 Credit
Agreement entered into a Waiver and Fourth Amendment to Credit Agreement (the
"Fourth Amendment") which, among other things, waived compliance with certain
provisions of the 1995 Credit Agreement and further amended certain of the
financial covenants contained therein. After giving effect to the Fourth
Amendment, the Company believes that it was in compliance with the 1995 Credit
Agreement as of March 31, 1997, although it remained near the limits provided
for in certain of the financial covenants.

                                        6

<PAGE>   7

                               THOMPSON PBE, INC.
              NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS


7.  SUBSEQUENT EVENT

    On May 6, 1997 the Board of Directors declared a dividend distribution of
one Preferred Share Purchase Right (the "Rights") on each outstanding share of
common stock of the Company. If and when the Rights become exercisable, each
Right will entitle stockholders to buy one one-hundredth of a share of newly
created Series A Junior Participating Preferred Stock of the Company at an
initial exercise price of $25.00 per Right. The Rights will, subject to certain
exceptions, be exercisable if a person or group acquires 20% or more of the
Company's common stock or announces a tender offer for 20% or more of the common
stock. The Company's Board of Directors will be entitled to redeem the Rights at
$.01 per Right, payable in cash or stock.

The Rights are designed to assure that all Company stockholders receive fair
and equal treatment in the event of any proposed takeover of the Company and to
guard against partial tender offers, open market accumulations and other abusive
tactics to gain control of the Company without paying all stockholders a control
premium.

If a person acquires 20% or more of the outstanding common stock of the Company
(other than certain exempt persons), each Right will entitle its holder to
purchase, at the Right's then-current exercise price, a number of shares of
Company common stock having a market value at that time of twice the Right's
exercise price. Rights held by the 20% holder will become void and will not be
exercisable to purchase shares at the bargain purchase price. If the Company is
acquired in a merger or other business combination transaction which has not
been approved by the Board of Directors, each Right will entitle its holder to
purchase, at the Right's then-current exercise price, a number of the acquiring
company's common shares having a market value at that time of twice the Right's
exercise price. The exercisability of the Rights will not be triggered by any
person who beneficially owns more than 20% of the Company's common stock at the
close of business on May 6, 1997, provided such exempt person acquires no more
than an additional 0.25% of the outstanding common stock (presently, slightly
more than 21,000 shares) after such date.

The dividend distribution will be payable to stockholders of record on May 29,
1997. The Rights will expire on May 6, 2007. The declaration of the Rights
dividend will not result in any charge to the Company's results of operations.






                                        7

<PAGE>   8

ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                   CONDITION AND RESULTS OF OPERATIONS

GENERAL

    The following discussion should be read in conjunction with the unaudited
consolidated condensed financial statements and accompanying notes, included in
Part I - Item 1 of this Quarterly Report, and the audited consolidated financial
statements and accompanying notes and Management's Discussion and Analysis of
Financial Condition and Results of Operations for the year ended September 30,
1996 contained in the Company's Annual Report on Form 10-K.

    Information contained in this Report includes "forward-looking" statements
that are based largely on the Company's current expectations and are subject to
a number of risks and uncertainties. Forward-looking statements can be
identified by the use of forward-looking terminology such as "may," "will,"
"should," "expect," "anticipate," "estimate," "continue," "plans," "intends" or
other similar terminology. See Forward-looking Statements and Associated
Business Risks, and Item 1., "Business --Business Risks." in the Company's
Annual Report on Form 10-K.

    A key component of the Company's business strategy has been to make add-on
acquisitions to augment its existing operations and to capitalize on
opportunities to enter new geographic markets. As described in Note 5 to the
Consolidated Condensed Financial Statements, the Company has completed
the acquisition of two businesses subsequent to September 30, 1996. The
businesses acquired had combined annual sales for their most recent fiscal years
of approximately $8.0 million. The Company's acquisition plan for 1997 is
presently expected to focus on selective acquisitions in existing markets. In
the ordinary course of its business, the Company regularly evaluates, and enters
into negotiations relating to, potential acquisition opportunities. See Note 5
to the Consolidated Condensed Financial Statements and "-- Liquidity and Capital
Resources."

SEASONALITY AND OTHER VARIATIONS IN BUSINESS RESULTS

    The Company's sales and operating results have historically varied
substantially from quarter to quarter due to certain factors and the Company
expects certain of these fluctuations to continue. Among these factors have been
the timing of acquisitions, the promptness with which the Company integrates
acquired businesses, seasonal buying patterns of the Company's customers,
weather, and the timing and magnitude of supplier price increases and other
incentive programs. Historically, sales have slowed in the fall and early winter
of each year largely due to weather and the reduced number of business days
during the holiday season. As a result, financial performance for the Company's
distribution sites is generally lower during the first and second fiscal
quarters than during the other quarters of the fiscal year. During the most
recent fiscal quarter, the Company reduced its purchases in advance of scheduled
vendor price increases in connection with efforts to reduce inventory levels.
Also during the period, the Company received a smaller benefit from vendor
incentive programs than in prior periods. In addition, the timing of
acquisitions may cause substantial fluctuations of operating results from
quarter to quarter. The Company's sales and operating results also vary due to
changes affecting the domestic wholesale aftermarket for automotive paint and
related supplies, such as the volume of warranty repair work and the level of
new and used car sales.

RESULTS OF OPERATIONS

    Net sales. For the three months ended March 31, 1997, net sales increased by
22.5% to $51.4 million from $42.0 million for the three months ended March 31,
1996. For the six months ended March 31, 1997, net sales increased by 25.4% to
$99.2 million from $79.1 million for the six months ended March 31, 1996. The
increases in revenue were primarily attributable to net sales related to
acquisitions completed since December 31, 1995. Sales in existing operations
were down slightly for the three months and six months ended March 31, 1997 from
the prior year comparable periods, with decreases in volume more than offsetting
increased selling prices. See "-- Seasonality and Other Variations in Business
Results."


                                        8

<PAGE>   9

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (cont.)

    Gross profit. Gross profit for the three months and six months ended March
31, 1997 increased to $17.7 million and $34.9 million from $15.5 million and
$29.4 million, respectively, from the comparable periods in 1996. Gross profit
as a percentage of net sales of 34.4% for the three months ended March 31, 1997
decreased from gross profit as a percentage of net sales of 36.9% for the year
earlier period. Gross profit as a percentage of net sales of 35.2% for the six
months ended March 31, 1997 decreased from gross profit as a percentage of net
sales of 37.2% for the comparable period in 1996. The reduction in gross profit
margins was attributable to a change in the Company's inventory purchasing
patterns, including a reduction in inventory purchases in advance of scheduled
vendor price increases, a reduction in prompt payment discounts realized on
prepayment of inventory purchases made under extended payment terms and
increased customer support costs. To a lesser extent, competitive pressures also
contributed to the decline in gross profit margins.

    Selling, general and administrative expenses. Selling, general and
administrative expenses increased 21.0% to $14.8 million for the three months
ended March 31, 1997 from $12.2 million in the year earlier period. Selling,
general and administrative expenses increased 25.3% to $29.4 million for the six
months ended March 31, 1997 from $23.4 million for the comparable period in
1996. The increase in absolute amounts from period to period reflects the
increase in costs necessary to support the Company's expanded operations arising
from its acquisition program. Selling, general and administrative expenses
decreased to 28.8% of net sales for the three months ended March 31, 1997 as
compared to 29.1% of net sales in the year earlier period. The decrease in
selling, general and administrative expenses as a percentage of net sales for
the three months ended March 31, 1997 as compared to the year earlier period is
primarily attributable to the effects of expense control efforts, including
the effects of decreased management infrastructure. Selling, general and
administrative expenses as a percentage of net sales of 29.6% for the six months
ended March 31, 1997 did not vary from the year earlier period, as the effect of
cost control efforts was offset by the effect of a decrease in sales in existing
operations. 

    Depreciation and Amortization expense. Depreciation expense increased to
$545,000 in the three months ended March 31, 1997 from $436,000 in the three
months ended March 31, 1996. Depreciation expense increased to $1,032,000 in the
six months ended March 31, 1997 from $855,000 in the six months ended March 31,
1996. The increase in depreciation expense is attributable to an increase in
fixed assets related to the expanded operations of the Company. Amortization
expense for the three months March 31, 1997 increased to $735,000 from $525,000
for the three months ended March 31, 1996. Amortization expense for the six
months March 31, 1997 increased to $1,442,000 from $1,008,000 for the six months
ended March 31, 1996. These results reflect the net effect of an increase in
amortization expense relating to goodwill recorded in connection with the
acquisition of companies. Depreciation and amortization expenses are expected to
continue to increase from period to period as a result of continued acquisition
activity by the Company.

    Interest expense. Interest expense increased to $1,055,000 and $2,102,000
for the three months and six months ended March 31, 1997, respectively, from
$542,000 and $886,000 in the comparable periods in 1996. The increase in
interest expense reflects an increase in the average debt outstanding as
compared to the year earlier periods. Interest expense in future periods will be
dependent upon fluctuations in outstanding debt balances, prevailing interest
rates and changes in the Company's ratio of senior debt to operating cash flow.
See "-- Liquidity and Capital Resources."

    Provision for income taxes. The provision for income taxes as a percentage
of income before income taxes increased to 44.0% for the three months ended
March 31, 1997 from 41.5% for the three months ended March 31, 1996. The
provision for income taxes as a percentage of income before income taxes
increased to 43.4% for the six months ended March 31, 1997 from 41.5% for the
six months ended March 31, 1996. The increase in the effective tax rate is a
result of an increase in nondeductible expenses as a percentage of income
before taxes, as compared to the year earlier periods. The effect of
nondeductible amortization of intangible assets arising from the acquisition of
the stock of certain acquired businesses in relation to the Company's income
before income taxes will continue to result in fluctuations in the Company's
effective tax rate as well as a tax rate in excess of the statutory rate.



                                        9

<PAGE>   10

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (cont.)

LIQUIDITY AND CAPITAL RESOURCES

    The Company's liquidity and capital resources have been significantly
impacted by acquisitions commencing with the initial acquisition of Thompson
Lacquer Company in May 1989. The Company historically has financed its business
activities and acquisitions principally through a combination of secured,
subordinated and seller-provided borrowings, augmented by internally generated
cash flow. In addition, the Company has financed certain of its larger
acquisitions partially through the issuance of equity securities.

    The Company had working capital of $23.9 million at March 31, 1997. In
addition to working capital, the Company's principal source of liquidity was the
1995 Credit Agreement, as amended, which provides for borrowings in an aggregate
amount not to exceed $70 million, consisting of (i) a revolving credit facility
of $18.0 million, limited to a borrowing base, (ii) a term loan of $30.0
million, and (iii) an acquisition loan facility of $27.0 million. Borrowings
under the 1995 Credit Agreement are secured by substantially all of the
Company's assets and such agreement contains significant restrictive covenants
which require the Company to maintain certain financial ratios and which limit,
among other things, capital expenditures, the incurrence of indebtedness and the
payment of cash dividends.

    Effective January 1, 1997, the Company and the banks participating in the
1995 Credit Agreement entered into the Fourth Amendment which, among other
things, waived compliance with certain provisions of the 1995 Credit Agreement
and further amended certain of the financial covenants contained therein. After
giving effect to the Fourth Amendment, the Company believes that it was in
compliance with the 1995 Credit Agreement as of March 31, 1997, although it
remained near the limits provided for in certain of the financial covenants.
Failure to satisfy the financial covenants under the 1995 Credit Agreement could
result in a material adverse affect on the Company's financial position and
results of operations. In the event that the Company does not meet the amended
financial covenants contained in the 1995 Credit Agreement in future periods,
the Company could experience higher interest rates on debt outstanding under the
1995 Credit Agreement, a reduction of amounts available under the agreement,
other adverse changes in the terms under which outstanding debt is repaid, which
could be material, or an acceleration of the due dates of the borrowings.

    As of March 31, 1997, the Company had available to borrow approximately $13
million of revolving credit loans under the 1995 Credit Agreement. As of March
31, 1997, the maximum amount available to borrow, in circumstances in which the
Company did not exceed financial covenant ratios contained within the 1995
Credit Agreement were acquisition loans of up to $23.3 million. However, as
noted above, the Company was near the limit of certain covenant ratios, and
accordingly, in the absence of increases in operating cash flow, future
borrowings may be restricted or may not be available.

    On December 5, 1996, the Company announced that its Board of Directors had
approved a stock repurchase program of up to 500,000 shares of the Company's
Common Stock. Through December 16, 1996, the Company had repurchased 63,700
shares at an average price of $6.69 per share under the program. No further
repurchases have been made and any further such repurchases would, among other
things, require the prior consent of the lenders under the 1995 Credit
Agreement, and there can be no assurance that the lenders would grant such
consent if requested. Accordingly, the Company does not expect to repurchase
additional shares under this program at any time in the immediate future. 

    Cash provided by operations was $7.6 million for the six months ended March
31, 1997 as compared to cash used by operations of $1.9 million for the year
earlier period. Although net income decreased by $1.4 million during the six
months ended March 31, 1997 as compared to the year earlier period, an increase
in depreciation and amortization expense and an increase in cash provided by
changes in operating assets and liabilities resulted in the change in cash flow
from operating activities. During the six months ended March 31, 1996, changes
in inventory and accounts payable balances resulted in a use of cash of $4.1
million, whereas during the six months ended March 31, 1997, changes in
inventory and accounts payable balances resulted in a source of cash of $5.2
million.


                                       10

<PAGE>   11

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (cont.)

    The Company's investing activities used cash totaling $4.9 million to
acquire businesses during the six months ended March 31, 1997, as compared to a
use of cash of $11.1 million to acquire businesses during the six months ended
March 31, 1996. In addition, the Company had capital expenditures of $1.2
million and $1.0 million in the six months ended March 31, 1997 and 1996,
respectively. Capital expenditures were primarily for refurbishment of
distribution sites, upgrades of computer systems and the replacement of delivery
vehicles.

    The Company's inventories at March 31, 1997 represented approximately 90
days' sales, as compared to 107 and 89 days' inventory on hand at March 31, 1996
and September 30, 1996, respectively. The decrease in days' inventory at March
31, 1997 as compared to March 31, 1996 is attributable to efforts to reduce
inventory which resulted in decreased large volume purchases of inventory from
certain manufacturers. Also during the period, the Company reduced its seasonal
buying although this change also reduced somewhat the supplier discounts and
rebates realized.

    The Company's accounts payable at March 31, 1997 represented approximately
55 days' purchases, compared to 45 days at March 31, 1996. As a general matter,
the Company's level of accounts payable is favorably impacted by the Company's
ability to take advantage of periodic supplier incentive programs, which
programs often extend the payment date beyond normal terms with large volume
purchases. Accounts payable levels are also impacted by vendor programs allowing
the Company additional price discounts for prompt payment of purchases. Accounts
payable levels will continue to vary from period to period depending on which
vendor payment programs are available. Although there can be no assurance that
such extended programs will be continued, they have been commonplace in the
Company's industry for many years and have been routinely offered by each of its
principal suppliers. If, however, these programs changed or were terminated, the
Company's liquidity requirements could change materially.

    Management of the Company presently believes that cash flow from operations,
together with present sources of liquidity and borrowing capacity under its 1995
Credit Agreement, will be sufficient to support operations and general business
and liquidity requirements for at least the next twelve months. The Company, in
the ordinary course of its business, regularly evaluates, and enters into
negotiations relating to, potential acquisition opportunities. To finance future
acquisitions, the Company expects to utilize its 1995 Credit Agreement, seller
financing and cash flow from operations. Depending on market conditions, the
Company may also incur additional indebtedness or issue equity securities. There
can be no assurance that such additional capital, if and when required, will be
available on terms acceptable to the Company, or at all.

FORWARD-LOOKING STATEMENTS AND ASSOCIATED BUSINESS RISKS.

    This Report contains certain forward-looking statements pertaining to, among
others things, the Company's future results of operations, growth plans, sales,
gross margin and expense trends, capital requirements, compliance with
contractual obligations and general business, industry and economic conditions
applicable to the Company. These statements are based largely on the Company's
current expectations and are subject to a number of risks and uncertainties.
Actual results could differ materially from these forward-looking statements. In
addition to the other risks described elsewhere in this Report, important
factors to consider in evaluating such forward-looking statements include
changes in external market factors, changes in the Company's business strategy
or an inability to execute its strategy due to changes in its industry or the
economy generally, the emergence of new or growing competitors and various other
competitive factors. These and certain other significant business risks faced by
the Company are discussed in additional detail under the caption Item 1.,
"Business -- Business Risks" in the Company's Annual Report on Form 10-K for the
1996 fiscal year. In light of these risks and uncertainties, there can be no
assurance that the forward-looking statements contained or referred to in this
Report will in fact occur.




                                       11

<PAGE>   12

                           PART II. OTHER INFORMATION


ITEM 1.    LEGAL PROCEEDINGS

             Not applicable.

ITEM 2.    CHANGES IN SECURITIES

           (a)   On May 6, 1997, the Board of Directors declared a dividend
                 of one Preferred Share Purchase Right on each outstanding
                 share of common stock of the Company. See Note 7 to the
                 Consolidated Condensed Financial Statements.

           (b)   Not applicable.

           (c)   Not applicable.  


ITEM 3.    DEFAULTS UPON SENIOR SECURITIES

             Not applicable.


ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

           (a)   The Registrant's annual meeting of stockholders was held on 
                 February 26, 1997.

           (b)   The following directors were elected at the meeting:

<TABLE>
<CAPTION>
                                                       For           Withheld
                                                       ---           --------
             <S>                                    <C>              <C>    
             Mortimer A. Kline, III                 7,875,965        307,823
             Frank C. Alexander                     7,879,765        304,023
             David L. Ferguson                      7,879,965        303,823
             D. Hunt Ramsbottom, Jr.                7,871,745        312,043
             John D. Roach                          7,877,965        305,823
             Louis A. Simpson                       7,879,965        303,823
</TABLE>

The foregoing matters are described in more detail in the Registrant's
definitive proxy statement for the Annual Meeting of Stockholders dated January
10, 1997.


ITEM 5.    OTHER INFORMATION

             None.



                                       12

<PAGE>   13

ITEM 6.    EXHIBITS AND REPORTS ON FORM 8-K


(a)  EXHIBITS

<TABLE>
<CAPTION>
                                                                              Sequential
                Description                                                   Page Number
                -----------                                                   -----------
<S>             <C>                                                                <C>
Exhibit 11.1    Computation of Net Income per Common and Common
                Equivalent Share.                                                  15

Exhibit 10.54   Waiver and Fourth Amendment to Credit Agreement,
                dated as of May 9, 1997 to the Credit Agreement dated as of
                January 6, 1995 between the Company, Heller Financial, Inc.
                and the banks named herein.                                        17

Exhibit 10.55   Executive Separation Agreement between the Company
                and D. Hunt Ramsbottom, Jr.                                        30
</TABLE>


(b)  REPORTS ON FORM 8-K

           None.


                                       13

<PAGE>   14
                                   SIGNATURES

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.


                                           THOMPSON PBE, INC.
                                          (Registrant)



Date:  May 12, 1997                        /s/  Michael O'Donovan
                                           ----------------------
                                           Michael O'Donovan
                                           Executive Vice President and
                                           Chief Financial Officer



                                       14