SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549
                                   FORM 10-K
(Mark One)

      [X]     Annual Report  Pursuant to Section 13 or 15(d) of the  Securities
              Exchange Act of 1934

      For fiscal year ended February 27, 1999 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 Offices)               (Zip Code)

                                 (781) 853-0900
                                 --------------
              (Registrant's Telephone Number, Including Area Code)

      Securities registered pursuant to Section 12(b) of the Act:

                                      None

      Securities registered pursuant to Section 12(g) of the Act:

                      Class A Common Stock, $.01 par value

      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 by check mark if disclosure of delinquent filers pursuant to Rule
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference in Part III of this Form 10-K or any amendment to the
Form 10-K. Yes X No ___

      The aggregate market value of the registrant's  Class A Common Stock, $.01
par value,  held by  non-affiliates  of the  registrant as of April 30, 1999 was
$15,170,875  based on the  closing  price of $2.625  on that date on the  Nasdaq
National  Market.  As of April 30, 1999,  5,969,553  shares of the  registrant's
Class A Common Stock, $.01 par value, were outstanding,  and 4,681,082 shares of
the registrant's Class B Common Stock, $.01 par value, were outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

      Portions of the  registrant's  Proxy  Statement  involving the election of
directors,  which is expected  to be filed  within 120 days after the end of the
registrant's  fiscal  year,  are  incorporated  by reference in Part III of this
Report.
<PAGE>
PART I

ITEM 1.   BUSINESS

      Except for the historical  information contained herein, the discussion in
this Report and any document  incorporated  herein by reference contains certain
forward-looking  statements  that  involve  risks  and  uncertainties,  such  as
statements of the Company's  plans,  strategies,  objectives,  expectations  and
intentions.  The cautionary  statements made in the Management's  Discussion and
Analysis  of  Financial  Condition  and  Results of  Operations -- "Safe  Harbor
Statement under the Private Securities  Litigation Reform Act of 1995" should be
read as being applicable to all forward-looking statements wherever they appear.
The Company's  actual results could differ  materially  from those  discussed or
incorporated herein.  Factors that could cause or contribute to such differences
include those  discussed in  Management's  Discussion  and Analysis of Financial
Condition and Results of Operations as well as those discussed  elsewhere herein
or the documents incorporated herein by reference.

      Trend-Lines,  Inc. (the  "Company")  is a specialty  retailer of power and
hand tools and accessories,  as well as golf equipment and supplies. The Company
was  formed in 1981,  and in 1983 the  Company  began  mailing  its  Trend-Lines
catalog and opened a  Woodworkers  Warehouse  outlet  store in its  distribution
center. The Company opened its first Woodworkers  Warehouse retail store in 1986
and at February 27, 1999, operated 121 Woodworkers  Warehouse stores. In January
1995, the Company  further  expanded its tool retail  operations by acquiring 17
Post Tool stores and a distribution  center for those stores and at February 27,
1999,  operated 28 Post Tool stores. The Company purchased the Golf Day name and
mailing  list in 1989,  mailed its first  Golf Day  catalog in 1990 and opened a
Golf Day outlet store in its  distribution  center in January  1991.  In January
1998, the Company  further  expanded its golf retail  operations by acquiring 13
Nevada Bob's  franchised  stores located in New England,  which were immediately
converted to Golf Day stores. At February 27, 1999, the Company operated 82 Golf
Day  stores.  All of the  Company's  Woodworkers  Warehouse  and Golf Day retail
stores are located in the Northeast and Mid-Atlantic regions,  except for 4 Golf
Day stores located in California.  The Company's 28 Post Tool stores are located
in California except for 2 stores located in Nevada.

      The Company was  incorporated  in  Massachusetts  in 1981.  The  principal
executive  offices of the Company are located at 135  American  Legion  Highway,
Revere, Massachusetts 02151, and its telephone number is (781) 853-0900. As used
herein,  the term  Company  refers to  Trend-Lines,  Inc.  and its wholly  owned
subsidiary, Post Tool, Inc.

The Woodworking Tool Industry

      According to the "Woodworking in  America"(Trademark)  survey sponsored in
1995  by  the  American   Woodworker   Magazine  (the   "Woodworking   Survey"),
approximately 10% of the United States adult population,  or nearly 18.6 million
people, are involved in woodworking activities,  spending more than $6.3 billion
annually  on  equipment  and  accessories  used   specifically  for  woodworking
projects.  Major items in this category include power tools; wood finishes; hand
tools;  blades,  bits and cutters;  glue and  adhesives;  abrasives;  sharpening
equipment;  books and other  equipment  and supplies.  Approximately  40% of the
total amount spent, or $2.6 billion, is spent on power tools.

      Woodworkers range from home workshop enthusiasts to professionals involved
in a wide variety of activities,  including home  construction  and  remodeling,
cabinet and  furniture  making and other  woodworking  projects.  More  advanced
woodworkers  participate in activities that require a greater skill level,  such
as cabinet making,  architectural  woodworking,  furniture making,  millwork and
veneering.  According to the Woodworking Survey,  woodworkers have been involved
in  woodworking  an average of  approximately  fifteen  years,  and the  typical
woodworker  spends an average  of more than six hours per week in the  workshop.
Further, as interest and/or skill level increase, factors such as a wide variety
and  selection  of  merchandise  and  availability  of  hard-to-find  items  and
well-known  brand  name  products  become  more  important  to  the  woodworking
customer.

The Golf Industry

      According  to  the  National  Golf   Foundation's   1998  report  on  golf
participation  in the United  States,  the number of Americans  playing golf has
increased 33% to 26.5 million since 1986. The number of golf courses in the U.S.
has  increased  24%, to 16,365  courses over the last 13 years.  In 1998 golfers
spent $2.2 billion on golf clubs alone and $5.0 billion on other  equipment  and
related merchandise. The game's growing popularity among juniors has been fueled
by Tiger Woods and women  currently  represent the fastest growing golf segment.
Major items in this category include clubs,  bags, hand carts,  balls,  training
aids, golf shoes, apparel, accessories and gift items.

Business Strategy

      The  Company's  business  strategy is  designed  to enhance the  Company's
position  and to maximize the  Company's  future  growth as a leading  specialty
retailer of power and hand tools and accessories, as well as golf equipment. The
key elements of the Company's business strategy are as follows:

     o  Expansion of retail store  operations.  The Company plans to continue to
        expand its retail  store  operations  by  opening  approximately  ten to
        fifteen stores in fiscal year 1999.  The Company  intends to continue to
        focus its retail store openings in existing  markets or markets in close
        proximity to those in which it is  currently  operating in order to take
        advantage  of its  distribution  system.  The Company may also  consider
        expansion of its retail store operations through strategic acquisitions.

     o  Complementary store and catalog operations.  The strong name recognition
        of the Company's  Trend-Lines  and Golf Day catalogs,  combined with the
        customer base and market  knowledge  that have resulted from its catalog
        operations,  is  facilitating  the  expansion  of the  Company's  retail
        stores.  Management  uses catalog  information,  among other things,  in
        identifying new store markets and  determining  the appropriate  product
        mix for its retail stores.

     o  Cost-effective operations. The Company consistently strives to lower the
        cost of its operations. In operating its tool and golf businesses in the
        Northeast and Mid-Atlantic  regions,  the Company uses a single facility
        with common management and common or parallel information, telemarketing
        and distribution  systems,  in order to achieve operating  efficiencies.
        The  Company  also  has  a  distribution   center  located  in  Hayward,
        California,  for its Post Tool operation, which has been integrated into
        the Company's management information systems.

     o  Breadth and depth of product  selection.  The Company offers breadth and
        depth of product selection,  including many hard-to-find items, and high
        quality brand name and private label merchandise.

     o  Low  prices  and  matching   product/price   guarantee.   The  Company's
        competitive  pricing strategy features everyday low prices combined with
        special sales and promotions,  and a matching product/price guarantee on
        any identical product sold by a competitor.

     o  Expert customer service.  The Company provides its customers with expert
        customer  service  through  experienced,   trained  personnel  who  have
        extensive knowledge about the products sold by the Company.

     o  Customer convenience. The Company strives to maximize convenience to its
        retail store  customers by providing  ample parking and fast  in-and-out
        service.

Expansion Strategy

      At February 27, 1999, the Company  operated 121 Woodworkers  Warehouse and
82 Golf Day stores in the Northeast and  Mid-Atlantic  and 4 in  California,  as
well as 26 Post Tool stores in California  and 2 in Nevada.  In fiscal 1998, the
Company  opened 22 tool stores and 14 golf stores,  while  closing 6 tool stores
and 3 golf  stores.  The  Company  plans to open  approximately  10 to 15 retail
stores in fiscal 1999.

      The  Company  intends to  continue  to focus  store  openings  in existing
markets  or  markets  in close  proximity  to  those  in  which it is  currently
operating in order to take advantage of its distribution  system, as well as the
strong name  recognition,  customer base and market knowledge that have resulted
from the Company's catalog  operations.  When appropriate,  the Company may also
seek to open new  Woodworkers  Warehouse and Golf Day stores  side by side or in
the same strip mall. The Company may also consider expansion of its retail store
operations through strategic acquisitions.

      When deciding  whether to enter a new market or open additional  stores in
existing markets, the Company evaluates a number of criteria, including size and
growth pattern of the population,  local  demographics,  sales volume potential,
competition,  the potential effect of a new store on existing stores in the same
area,  real estate  occupancy  expense,  traffic  patterns and overall  level of
retail  activity.  Stores  typically  are  located  in  high-traffic  areas with
adequate parking to support their sales volume.

      The cost of opening a new tool store  (exclusive  of  distribution  center
inventory),  including  fixtures,  equipment and nominal  pre-opening  expenses,
averages approximately  $380,000,  including $315,000 of inventory.  The cost of
opening  a new golf  store is  approximately  $510,000,  including  $375,000  of
inventory.  In each case, a portion of the inventory investment is financed with
trade credit.

Products and Merchandising

      The Company offers its woodworking  customers breadth and depth of product
selection,  including  many  hard-to-find  items,  high  quality  brand name and
private  label  merchandise,  everyday low pricing and a matching  product/price
guarantee,  expert customer service and  convenience,  all of which have enabled
the  Company  to  compete   successfully   against  major  home  centers,   mass
merchandisers and hardware stores.  The Company's  Woodworkers  Warehouse stores
have been  successful  even when  located  near home centers such as Home Depot,
Home Quarters, and Lowes.

      The Company's tool stores and Trend-Lines  catalog carry a broad selection
of brand name products,  including products from Black & Decker,  Bosch,  Delta,
DeVilbiss,  DeWalt,  Emglo, Freud,  Hitachi,  Makita,  Milwaukee,  Porter-Cable,
Ryobi, Skil and Stanley Bostitch.  In addition,  the Company sells private label
products under its Reliant, Carb-Tech and Vulcan trademarks. Most brand name and
private label products are generally sold with a one year limited manufacturer's
parts and labor warranty.

      Woodworkers  Warehouse stores primarily carry  woodworking  power and hand
tools and accessories.  In addition,  Post Tool stores also carry power and hand
tools and accessories for mechanical  (including  automotive)  work. The Company
selects products based on quality, value,  durability,  historic product demand,
safety and customer  appeal.  The Company  constantly  monitors  its  customers'
product  preferences  through inventory and sales data provided by the Company's
computer system, as well as its catalog operations.

      Woodworkers  Warehouse  stores and the  Trend-Lines  catalog  serve a wide
range  of  woodworking  tool  customers,   from  home  workshop  enthusiasts  to
professionals,  involved  in  a  wide  variety  of  activities,  including  home
construction and remodeling,  cabinet and furniture making and other woodworking
projects.  The Company's  Woodworkers  Warehouse and  Trend-Lines  customers are
generally experienced in woodworking and carpentry and desire high quality brand
name tools. Post Tool customers buy tools for woodworking, carpentry, remodeling
and general mechanical work,  including  automotive.  Woodworkers  Warehouse and
Post Tool  stores also  attract  professionals  who are buying  tools for use in
their trade. The Company's stores offer professional tools,  knowledgeable sales
people and fast in-and-out service. The Company's  Woodworkers  Warehouse stores
also offer tool repair, which is done by an outside service company.

      The  Company's  Golf Day retail stores and mail order catalog sell a broad
selection of golf  equipment and supplies,  including  clubs,  club  components,
bags, balls, golf shoes,  apparel,  hand carts,  training aids,  accessories and
gift items.  The Company  carries  leading brand name golf  products,  including
products  from Adams,  Callaway,  Cleveland,  Cobra,  Etonic,  Foot-Joy,  Hogan,
MacGregor,  Nike,  Olimar,  Spalding,  Taylor Made,  Titleist,  Tommy Armour and
Wilson. In addition,  the Company sells private label golf merchandise under its
Honors  trademark.  The Company selects golf products using similar  criteria as
those applied in the selection of tools and accessories.

Retail Operations

      The Company designs its retail stores to be destination stores and strives
to maximize  convenience  to its  customers by providing  ample parking and fast
in-and-out  service.  The Company's stores are generally located either in strip
malls or in free-standing buildings.

      The Company's tool stores  generally range from 4,500 to 5,500 square feet
of retail space and carry  approximately  5,000 stock keeping units (SKUs).  The
Company's golf stores  generally range from 4,000 to 5,000 square feet of retail
space and carry  approximately 3,500 SKUs.  Generally,  the Company's stores are
open six days and two nights per week, except for certain holidays.

      At February  27, 1999,  the Company  operated  121  Woodworkers  Warehouse
stores, 28 Post Tool stores and 82 Golf Day stores. Of the Woodworkers Warehouse
stores, 33 were located in New York, 24 in Pennsylvania, 17 in Massachusetts, 14
in New Jersey, 10 in New Hampshire, 9 in Connecticut, 7 in Maine, 3 in Delaware,
2 in Rhode Island, and 2 in Vermont.  Of the Post Tool stores, 26 are located in
California  and 2 in  Nevada.  Of the 82 Golf  Day  stores,  20 are  located  in
Massachusetts,  16 in  New  York,  13 in  New  Jersey,  8 in  Connecticut,  8 in
Pennsylvania,  6 in New Hampshire,  4 in Maine, 4 in California,  2 in Delaware,
and 1 in Rhode Island.

      The Company's  Woodworkers  Warehouse and Golf Day retail store operations
are currently  divided into regional  districts,  with each district  containing
from 18 to 22 stores.  The Company  evaluates the performance of its stores on a
continuous  basis and will close any store which is not adequately  contributing
to the  profitability  of the Company.  During fiscal 1998, the Company closed 6
tool stores as well as 3 golf stores.

      The Company  trains its employees to explain and  demonstrate to customers
the  use  and  operation  of  the  Company's  merchandise  and to  develop  good
salesmanship.  All new employees attend the Company's in-house training program,
Trend-Lines University.  Skills are further enhanced through on-the-job training
combined  with the use of  Company-developed  manuals.  Sales  personnel  attend
in-house   training   sessions   conducted   by   experienced   salespeople   or
manufacturer's  representatives and receive sales, product and other information
in periodic meetings with managers.

Catalog Operations

      The Company usually  produces four versions of each of the Trend-Lines and
Golf Day catalogs annually. The Company mailed approximately 11.1 million copies
of its Trend-Lines catalog and approximately 11.3 million copies of its Golf Day
catalog during fiscal year 1998. The  Trend-Lines  and Golf Day catalog  mailing
lists  total  approximately  1.1 million and  890,000  customers  (comprised  of
selected  previous  buyers),  respectively,  and are  supplemented  with various
rented  lists.  The  Company's  catalogs  are mailed to  prospective  purchasers
throughout the United States.

      Catalogs are sent to persons on the Company's  mailing  list,  persons who
have made  inquiries,  and  persons  on lists  which the  Company  rents from or
exchanges with compatible  companies.  The Company continually prospects for new
customers  by testing new mailing  lists,  media and other  programs in order to
cost effectively increase the size of the Company's proprietary customer mailing
lists.  The Company  also  strives to generate  more  incremental  revenue  from
existing customers.  Through the use of its management  information systems, the
Company  constantly  monitors the product mix contained in its catalogs in order
to maximize profitability and satisfy its customers' needs.

      A  substantial  majority  of the  Company's  catalog  orders and  customer
inquiries are received daily by a  sophisticated  call  management  distribution
system via incoming  toll free "800" numbers.  This system  distributes calls to
trained customer service  representatives  and provides  detailed call reporting
and analysis.  The Company provides technical assistance to its customers,  on a
toll-call basis. The Company usually ships orders within 48 hours after receipt.
In addition, the Company offers express delivery.

      The Company designs all of its catalogs  in-house with desk top publishing
equipment.  The Company's most recently mailed Trend-Lines and Golf Day catalogs
contained 68 and 36 pages, respectively.  The actual catalog printing is done by
outside printers, who also mail the catalogs.

Marketing and Advertising

      The Company  promotes retail store sales  primarily  through special store
promotions,  direct mail circulars,  geographically  concentrated  newspaper and
limited  radio  advertising,  as  well as  point-of-sale  materials  posted  and
distributed  in the stores.  The  Company  also makes  extensive  use of special
product promotions and sales,  combination offers, coupons, and other devices to
attract customers to its stores.  The Company promotes catalog sales principally
by catalog  mailings.  Management  tracks  the  results  of all  advertising  to
determine future advertising programs and expenditures.

Suppliers

      The power and hand tool and golf equipment  businesses  both rely on major
vendors with well known brand names, as well as smaller  specialty  vendors.  In
fiscal 1998, one of the Company's vendors accounted for approximately 11% of the
Company's   purchases.   The  Company  believes  its  vendor  relationships  are
satisfactory.

      In fiscal 1998, approximately 11% of the Company's tool products and 2% of
the Company's golf products were purchased from overseas vendors.  A substantial
portion of the tool and golf products sold under the  Company's  private  labels
are purchased  from  overseas  vendors.  The majority of the Company's  overseas
purchases  are from Taiwan  and,  to a lesser  extent,  Korea,  China,  England,
Germany and  Switzerland.  This portion of the Company's  business is subject to
the risks  generally  associated  with  conducting  business  abroad,  including
adverse  fluctuations in currency rates, changes in import duties or quotas, the
imposition of taxes or other charges on imports,  and  disruptions  or delays in
shipment  or  transportation.  To date,  these  factors  have not had a material
adverse impact on the Company's operations.

Distribution

      The Company  leases a 286,000 square foot  distribution  center in Revere,
Massachusetts,  just outside of Boston.  The facility  also houses the Company's
corporate offices and telemarketing  operation.  The distribution  center serves
the  Woodworkers  Warehouse and Golf Day retail stores and the  woodworking  and
golf catalogs.  The Company  leases a 51,000 square foot  warehouse  facility in
Chelsea,  Massachusetts,  which is used for additional storage and processing of
product  returns.  In  addition,   the  Company  leases  a  48,000  square  foot
distribution center in Hayward, California for its Post Tool stores.

      The  geographic  concentration  of its stores  facilitates  the  Company's
ability  to make  deliveries  to stores on a  frequent  basis,  provide  it with
significant  labor and  freight  savings,  and enable it to restock  its stores'
inventories promptly and efficiently from its distribution centers.

Management Information Systems

      The  Company  has  invested   significant   resources  in  its  management
information systems,  which are located at its corporate headquarters in Revere,
Massachusetts  and  have  been  integrated  with  its Post  Tool  operations  in
California.  These systems,  which consist of a full range of retail,  financial
and merchandising  systems,  include inventory  distribution and control,  order
fulfillment and inventory replenishment,  staffing, sales and marketing analyses
and financial and merchandise  reporting.  The Company's in-store  point-of-sale
computer system provides operational data to management on a daily basis that is
used to track sales and forecast inventory requirements. The Company's inventory
control  systems provide for automated  replenishment  of merchandise to each of
the Company's stores.  The warehouse picking for the weekly store  replenishment
considers store sales through the close of business of the previous day.

      The  Company  has  systems  that  support  the entire  catalog  cycle from
purchasing merchandise and planning the catalogs,  through merchandise sales and
delivery  to the  customers'  homes.  The  Company  manages a  catalog  customer
database  which  contains a list of  approximately  2.0 million  customers.  The
catalog  customer  database enables the Company to focus its catalog mailings on
customers  most  likely to  purchase,  analyzes  merchandise  trends  and buying
patterns, and tracks the effectiveness of customer promotional merchandising.

Competition

      The Company's tool and golf businesses are highly  competitive and compete
with a number of other  retailers,  mail order catalogs,  internet  websites and
magazine  advertisers.  Retail store  competitors  of the Company's  tool stores
include  home  centers,  lumber  yards,  hardware  stores,  mass  merchandisers,
independent tool stores,  industrial dealers and other specialty stores.  Retail
store  competitors of the Company's  golf stores include  sporting goods stores,
mass merchandisers, pro shops and other golf specialty stores.

      The Company competes on the basis of price, selection and service. Much of
the  Company's  business is  dependent  upon  competitive  pricing.  Many of the
Company's  competitors are  substantially  larger and have greater financial and
other  resources  than the  Company.  The  entrance  of new  competitors  or the
expansion of operations by existing  competitors  in the Company's  market areas
could have a material adverse effect on the Company's results of operations.

Registered Trademarks and Service Marks

      Golf   Day(Registered   Trademark),    Woodworkers    Warehouse(Registered
Trademark),  Trend-Lines(Registered  Trademark), Trend-Lines Woodworking Tools &
Supplies(Registered     Trademark),    Golf    Express(Registered    Trademark),
Carb-Tech(Registered     Trademark),     Post    Tool(Registered     Trademark),
Reliant(Trademark),    Vulcan(Registered    Trademark)   and   Honors(Registered
Trademark) are trademarks or service marks of the Company.  The Company  intends
to continue to register, when deemed appropriate,  trademarks and service marks.
The Company may also register trade names, when deemed appropriate.

Regulatory Matters

      The Company's  catalog  business is subject to the Merchandise  Mail Order
Rule and related regulations promulgated by the Federal Trade Commission,  which
prohibit unfair methods of competition and unfair or deceptive acts or practices
in  connection  with  mail  order  sales  and  require  sellers  of  mail  order
merchandise  to conform to certain  rules of conduct  with  respect to  shipping
dates and shipping delays. Management believes that the Company is in compliance
with such regulations.

Employees

      The Company relies on many part time, flex time and seasonal  employees to
meet its needs.  At February 27, 1999, the Company  employed  1,712 persons,  of
whom 1,098 were full time and 614 were part time. In January,  1999,  there were
twelve employees at the Company's Hayward  distribution  center that voted to be
represented by a labor union in California. The Company is currently negotiating
a labor  contract  with the labor  union.  The Company  considers  its  employee
relations to be satisfactory with its employees.

Executive Officers

Name                Age                  Position
----                ---                  --------
Stanley D. Black    62    Chairman of the Board of Directors and
                              Chief Executive Officer

Richard Griner      55    President, Chief Operating Officer and Director

Karl P. Sniady      46    Executive Vice President, Finance and Administration,
                              Chief Financial Officer and Director

Walter Spokowski    42    Executive Vice President, Merchandising

Richard A. Binder   54    Vice President, Legal and General Counsel

Frank P. Bussone    53    Vice President, Marketing

Ronald L. Franklin  53    Vice President, Finance, Treasurer, and Director

Kathleen Harris     40    Vice President, Human Resources

John A. McGregor    50    Vice President, Golf Day Merchandising

Jayne Pendergast    43    Vice President, Information Systems

Norman W. Zagorsky  61    Vice President, Purchasing

      Stanley D. Black,  founder of the Company,  has served as Chief  Executive
Officer  and  Chairman  of the  Board of  Directors  of the  Company  since  its
organization in 1981.

      Richard Griner joined  Trend-Lines as President,  Chief Operating  Officer
and Director in October 1996. From June,  1986 to January,  1995, Mr. Griner was
senior vice president of operations for Family Dollar Stores.

      Karl P. Sniady has been Executive Vice President of the Company since June
1995 and Chief Financial  Officer of the Company since September 1995. From 1990
to 1995,  Mr.  Sniady was Chief  Financial  Officer  of Auto  Source,  Inc.,  an
automotive aftermarket retailer and subsidiary of Canadian Tire.

      Walter   Spokowski   joined   Trend-Lines  as  Executive  Vice  President,
Merchandising  in March,  1997. From 1984 to February,  1997, Mr.  Spokowski was
with The Home Depot,  Inc., the world's largest home improvement  retailer.  Mr.
Spokowski served as Divisional  Merchandising Manager for the Southeast Division
from September, 1994 to March, 1997.

      Richard  A.  Binder has been Vice  President  and  General  Counsel of the
Company  since  August  1997.  From 1992  until  August  1997,  Mr.  Binder  was
associated with the law firm of Barsh and Cohen, P.C. specializing in commercial
law and real estate acquisitions.

      Frank P. Bussone has been Vice  President,  Marketing  since January 1995.
Mr.  Bussone  served as Director of  Marketing  of the Company from January 1988
until January 1995.

      Ronald L.  Franklin  has been a Director  of the  Company  since May 1994,
Treasurer  since April 1994,  and has served as Vice  President,  Finance  since
March 1987.

      Kathleen Harris has been Vice President,  Human  Resources,  since January
1995.  Ms.  Harris  served as Director of Human  Resources of the Company  since
March 1994.  From January 1991 until February 1994, Ms. Harris served as Manager
of Human Resources of the Company.

      John A. McGregor has been Vice  President,  Golf Day  Merchandising  since
August 1993.

      Jayne Pendergast has been Vice President,  Information Systems since June,
1998. From April, 1997 to May, 1998, Ms.  Pendergast was Director,  Applications
Development for Intrepid Systems.  From 1993 to 1997, she was Director,  Systems
Development for Casual Corner.

      Norman W. Zagorsky has been Vice President,  Purchasing since January 1997
and Vice President, Trend-Lines Merchandising from March 1987 to January, 1997.

ITEM 2.   PROPERTIES

      The  Company's  principal  executive  offices  and  its  distribution  and
centralized  telemarketing  operation are currently located in a common facility
in Revere, Massachusetts, where the Company leases an aggregate of approximately
286,000 square feet of space.  This lease expires in November,  2004 and has two
five-year  renewal options.  The Company also leases a distribution  facility in
Hayward,  California with approximately  48,000 square feet of space. This lease
expires on May 31, 2001 and has a seven-year  renewal option.  In addition,  the
Company leases a 51,000 square foot warehouse facility in Chelsea, Massachusetts
from an  affiliate  of Stanley D.  Black,  the  Chairman  of the Board and Chief
Executive  Officer of the Company.  This lease  expires in 2005.  The Company is
using this space for additional storage and processing of product returns.

      At February 27,  1999,  the Company  operated  231 stores,  all but two of
which were leased.  The leases typically  provide for an initial term of five to
ten years,  with renewal  options  permitting the Company to extend the term. In
all cases,  the Company pays fixed annual rents.  Many of the  Company's  leases
provide for an increase in annual  fixed rental  payments  during the lease term
and allow the Company to  terminate  the lease  before the end of the lease term
without  penalty so long as proper notice is provided.  Most leases also require
the Company to pay real estate taxes,  maintenance and repair costs,  insurance,
utilities and, in shopping center locations,  to make  contributions  toward the
shopping  center's  common area  operating  costs.  At February  27,  1999,  the
Company's store leases, assuming the Company does not exercise its lease renewal
options, were scheduled to expire as follows:

                   Year Lease              Number of Store Leases
                  Terms Expire                    Expiring
                   1999-2001                         81
                   2002-2004                        123
                   2005-2006                         13
                   2007 and later                    12

ITEM 3.   LEGAL PROCEEDINGS

      The Company is not a party to any material pending legal proceedings.

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

      None

PART II

ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Price

      The Class A Common Stock is included in the Nasdaq  National  Market under
the symbol  "TRND."  Prior to June 23, 1994,  there was no public market for the
Class A Common  Stock.  The  following  table  sets forth the high and low sales
prices for the Class A Common Stock for the periods indicated as reported by the
Nasdaq National Market,  adjusted to reflect a three-for-two stock split paid on
September 1, 1995.

                                               High            Low
Fiscal Year Ended February 27, 1999
       First Quarter                           $9.13          $4.81
       Second Quarter                          $5.88          $2.38
       Third Quarter                           $3.13          $1.25
       Fourth Quarter                          $5.00          $1.75

Fiscal Year Ended February 28, 1998
       First Quarter                           $7.44          $5.00
       Second Quarter                          $7.75          $6.00
       Third Quarter                           $8.50          $6.38
       Fourth Quarter                          $7.63          $6.13

Fiscal Year Ended March 1, 1997
       First Quarter                           $6.00          $3.50
       Second Quarter                          $5.25          $3.88
       Third Quarter                           $5.38          $3.50
       Fourth Quarter                          $6.00          $4.63

      At April  30,  1999 the last  reported  sales  price of the Class A Common
Stock on the Nasdaq  National  Market was  $2.625 per share.  At April 30,  1999
there  were  approximately  3,600  stockholders  of record of the Class A Common
Stock.

Dividends

      The  Company  does not  anticipate  declaring  any cash  dividends  in the
foreseeable  future.  It is the  current  policy of the  Company  to retain  any
earnings to finance the operations and expansion of the Company's business.

ITEM 6.  SELECTED FINANCIAL DATA

The following table sets forth certain financial data with respect to the
Company for each of the last five fiscal years.

<TABLE>
<CAPTION>
                                                                        Fiscal Years Ended
                                                                        ------------------
                                                               (In thousands, except per share data)

                                                February 27,  February 28,   March 1,     March 2,   February 28,
                                                    1999         1998          1997       1996 (1)       1995
                                                    ----         ----          ----       --------       ----
<S>                                              <C>           <C>           <C>         <C>           <C>
STATEMENTS OF OPERATIONS DATA (2):
  Net sales                                      $ 262,550     $231,143      $208,582    $ 174,795     $128,332
  Cost of sales                                    181,577      157,129       139,871      117,447       79,442
                                                 ---------     --------      --------    ---------     --------
  Gross profit                                      80,973       74,014        68,711       57,348       48,890
  Selling, general and administrative expenses      86,393       63,483        61,045       59,845       40,096
  Restructuring charge                                  --           --            --        1,397           --
                                                 ---------     --------      --------    ---------     --------
  Income (loss) from operations                     (5,420)      10,531         7,666       (3,894)       8,794
  Interest expense, net                              5,580        3,239         2,355        1,654          373
                                                 ---------     --------      --------    ---------     --------
  Income (loss) before provision (benefit)
    for income taxes                               (11,000)       7,292         5,311       (5,548)       8,421
  Provision (benefit) for income taxes              (3,590)       2,844         2,061       (2,229)       2,990
                                                 ---------     --------      --------    ---------     --------
  Net income (loss)                                 (7,410)    $  4,448      $  3,250    ($  3,319)    $  5,431
                                                 =========     ========      ========    =========     ========
  Pro forma net income (loss) (3)                                                                      $  5,051
                                                                                                       ========
  Basic net income (loss) per share (4)          ($   0.70)    $   0.42      $   0.30    ($   0.33)    $   0.59
  Diluted net income (loss) per share (4)        ($   0.70)    $   0.40      $   0.29    ($   0.33)    $   0.56
                                                 =========     ========      ========    =========     ========
  Basic weighted average of shares
    outstanding (4)                                 10,648       10,588        10,973       10,163        8,541
  Diluted weighted average number of shares
    outstanding (4)                                 10,648       11,122        11,255       10,163        8,966
STORE OPERATING DATA:
  Net store sales (000's)                        $ 217,031     $171,612      $140,342    $  98,515     $ 52,578
  Percentage increase (decrease) in
    comparable net store sales (5)                     1.3%         9.8%         19.6%        (0.3%)        1.4%
  Number of stores at end of period
    Tool stores                                        149          133           119          111           82 (6)
    Golf stores                                         82           71 (7)        40           30           10
CATALOG OPERATING DATA:
  Net catalog sales                              $  45,519     $ 59,531      $ 68,240    $  76,280     $ 75,754

                                                February 27,  February 28,   March 1,     March 2,   February 28,
                                                    1999         1998          1997       1996 (1)       1995
                                                    ----         ----          ----       --------       ----
BALANCE SHEET DATA:
Working capital                                  $  11,712     $ 21,774      $ 30,060    $  31,406     $ 17,224
Total assets                                       192,938      155,452       121,054      100,658       66,539
Total debt                                          81,851       45,760        27,757       21,292       12,071
Stockholders' equity                                40,442       47,751        43,406       42,288       25,854

</TABLE>

(1)  The Company changed its fiscal year-end to the Saturday closest to the last
     day of February. As a result, the Company's 1995 Fiscal Year, which ended
     on March 2, 1996, is a 53 week year and includes three extra days compared
     to the prior year.
(2)  The Company operated as an S Corporation from March 1, 1987 through June
     28, 1994 and, as a result, its taxable income (loss) during that period was
     passed through to its stockholders for federal income tax purposes.
     Accordingly, the historical financial statements do not include a provision
     for federal and state taxes for operations through June 28, 1994, except
     for certain state income taxes imposed at the corporate level.
(3)  Pro forma net income (loss) gives effect to a provision for income taxes
     that would have been required had the Company been taxed as a C Corporation
     from March 1, 1993 through June 28, 1994.
(4)  Adjusted to reflect a three-for-two split of the Class A and Class B Common
     Stock paid on September 1, 1995 and July 17, 1996, respectively. See Note 6
     to Notes to Consolidated Financial Statements.
(5)  Calculated using net sales of comparable stores opened for at least a 13
     month period.
(6)  Reflects the purchase in January 1995 of 17 tool stores.
(7)  Reflects the acquisition in January 1998 of 13 golf stores.

ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
          AND RESULTS OF OPERATIONS

General

      In recent years,  the Company's net sales have been primarily attributable
to its retail store  business.  During  fiscal 1998,  the Company  continued the
expansion of its retail store operations,  opening 36 tool and golf stores.  The
Company expects that the expansion of its retail store  operations will generate
the Company's  future  growth.  At February 27, 1999,  the Company  operated 149
Woodworkers Warehouse and Post Tool stores and 82 Golf Day stores.

      The  following  table  presents  net sales and  gross  margin  data of the
Company for the periods indicated:

                                             Fiscal Years Ended

                           February 27,           February 28,          March 1,
                               1999                  1998                 1997
                               ----                  ----                 ----
                                   (In thousands, except percentage data)

Net Sales:
    Retail
             Tools          $148,444               $133,000            $115,183
             Golf             68,587                 38,612              25,158

    Catalog
             Tools            27,945                 34,451              43,283
             Golf             17,574                 25,080              24,958
                              ------                 ------              ------

Total                       $262,550               $231,143            $208,582
                            ========               ========            ========


Gross Margin                  30.8%                  32.0%               32.9%
                              ====                   ====                ====

      The Company's  catalog sales yield higher gross profit margins than retail
store sales as a result of  differences  in product mix and greater  promotional
pricing in retail  stores.  Therefore,  the Company  anticipates  that its total
gross  profit as a percentage  of net sales will  decrease as retail store sales
become a greater  percentage of the Company's  total sales.  During fiscal 1998,
the Company  experienced  a 1.2% decrease in its gross profit as a percentage of
net sales as  compared  to fiscal  1997,  primarily  as a result  the  Company's
changing sales mix:  retail sales increased to 83% of total sales as compared to
74% of  1997  total  sales.  With  respect  to both  catalog  and  retail  store
operations,  sales of golf products have yielded higher gross profit percentages
than sales of tools.

Results of Operations

      The  following  table  sets  forth,  for the  periods  indicated,  certain
financial data as a percentage of net sales:

                                                 Fiscal Years Ended
                                                 ------------------

                                      February 27,   February 28,     March 1,
                                         1999           1998            1997
                                         ----           ----            ----

Net Sales                                100.0 %        100.0 %        100.0 %
Cost of  Sales                            69.2           68.0           67.1
                                      ------------   ------------    ----------
Gross Profit                              30.8           32.0           32.9
Selling, General and
     Administrative Expenses              32.9           27.4           29.2
                                      ------------   ------------    ----------
(Loss) Income From Operations             (2.1)           4.6            3.7
Interest Expense, net                      2.1            1.4            1.1
                                      ------------   ------------    ----------

(Loss) Income Before Income Taxes         (4.2)%          3.2 %          2.6 %
                                      ============   ============    ==========

Fiscal 1998 versus Fiscal 1997

      Net sales for fiscal  1998  increased  by $31.4  million,  or 13.6%,  from
$231.1  million for fiscal 1997 to $262.5  million.  Net retail sales for fiscal
1998  increased  $45.4  million or 26.5% from $171.6  million for fiscal 1997 to
$217.0  million.  However,  net catalog  sales for fiscal 1998  decreased  $14.0
million or 23.5%,  from $59.5  million for the fiscal 1997 to $45.5  million for
fiscal 1998. The decrease in net catalog sales was attributable to the Company's
opening of retail stores in areas only previously  served by its catalog as well
as to  distribution  difficulties  experienced  during  the first half of fiscal
1998, which were a result of problems encountered during the implementation of a
warehouse  management  system. The Company plans to continue its practice of not
mailing catalogs to areas where it operates retail stores. The revenue growth of
retail stores is  attributable  to the maturation and expansion of the Company's
retail store base.  The store base  expanded by 13.2% from 204  locations at the
end of fiscal 1997 to 231 locations at the end of fiscal 1998.  For fiscal 1998,
comparable net store sales for tool and golf stores,  increased by .5% and 4.3%,
respectively,  as compared to fiscal 1997.  Comparable  net sales for all stores
increased by 1.3% for fiscal 1998.

      Following is a summary of retail store growth.

                                                      Fiscal Years Ended
                                           -----------------------------------

                                           February 27,  February 28,  March 1,
                                               1999          1998        1997

Stores operated at the beginning of
 the fiscal year
          Tools                                 133           119        111
          Golf                                   71            40         30
                                           -----------------------------------
                  Total                         204           159        141
Stores opened during the fiscal year
          Tools                                  22            18         15
          Golf                                   14            33         11
                                           -----------------------------------
                  Total                          36            51         26
Stores closed during the fiscal year
          Tools                                   6             4          7
          Golf                                    3             2          1
                                           -----------------------------------
                  Total                           9             6          8
Stores operated at the end of the
 fiscal year
          Tools                                 149           133        119
          Golf                                   82            71         40
                                           -----------------------------------
                  Total                         231           204        159
                                           ===================================

      Gross profit for fiscal 1998 increased $7.0 million,  or 9.4%,  from $74.0
million for fiscal 1997 to $81.0 million for fiscal 1998. As a percentage of net
sales,  gross profit  decreased  1.2% from 32.0% of net sales for fiscal 1997 to
30.8% for fiscal 1998. The decrease in gross profit as a percentage of net sales
was primarily  due to the Company's  changing  sales mix,  given the  percentage
increase in retail  store  sales.  Since the catalog  business  has higher gross
margins than retail store  operations,  gross  margins will  decrease as catalog
sales decrease.

      Selling,  general and  administrative  expenses for fiscal 1998  increased
$22.9 million, or 36.1%, from $63.5 million for fiscal 1997 to $86.4 million for
fiscal 1998. As a percentage of net sales,  selling,  general and administrative
expenses  increased  5.4% from 27.4% of net sales in fiscal 1997 to 32.9% of net
sales  in  fiscal  1998.   The  dollar   increases   in  selling,   general  and
administrative expenses are primarily related to the Company's continuing retail
expansion  to 231  locations,  which is a 13%  increase  in the number of stores
operated,  as well as due to distribution  difficulties  experienced  during the
first half of fiscal 1998,  which were a result of problems  encountered  during
the  implementation of a warehouse  management  system. The increase in selling,
general and  administrative  expenses as a percentage of net sales was primarily
attributable to lower than anticipated sales,  coupled with increases in selling
and  administrative  expenses  related to new stores and resolution of warehouse
management implementation issues.

      Interest  expense,  net of interest  income,  for fiscal 1998 increased by
$2.3  million  from $3.2  million in fiscal 1997 to $5.6 million in fiscal 1998.
The increase in interest  expense was attributable to the increase in the amount
outstanding under the Company's bank credit facility.

Fiscal 1997 versus Fiscal 1996

      Net sales for fiscal  1997  increased  by $22.5  million,  or 10.8%,  from
$208.6  million in fiscal 1996 to $231.1 million in fiscal 1997 as a result of a
$31.2 million,  or 22.3%,  increase in net store sales,  and a $8.7 million,  or
12.8%,  decrease  in net  catalog  sales.  The  increase  in net store sales was
primarily  due to the net  addition  of 45 new stores as well as the impact of a
full year of  operations  for 26 stores  opened in the previous  fiscal year. In
addition,  comparable  store sales increased by 9.8%. The Company  believes that
the  increase  in  comparable  net store  sales was a result of  adopting a more
promotional  pricing  strategy  as well as closing 8 stores in fiscal 1996 and 6
stores in fiscal 1997. The decrease in net catalog sales was  attributable  to a
20.4%  decrease in sales from the Company's  Trend-Lines  catalog as compared to
fiscal  1996.  Sales  from the  Company's  Golf Day  catalog  increased  0.5% as
compared to fiscal 1996. The opening of retail stores in areas  previously  only
serviced by its  catalogs has  resulted in a decrease in the  Company's  catalog
sales in those areas.

      Gross profit for fiscal 1997 increased  7.7%, from $68.7 million in fiscal
1996 to $74.0 million in fiscal 1997. As a percentage of net sales, gross profit
decreased  to 32.0% in  fiscal  1997,  compared  to 32.9% in  fiscal  1996.  The
decrease in gross profit as a percentage  of net sales was  primarily due to the
Company's changing sales mix. The catalog business has both substantially higher
gross  margins  and  expenses  than  does  a  retail  store.  Therefore,  as the
contribution  from retail  stores  becomes a larger  proportion  of total sales,
gross  margins and  selling,  general  and  administrative  expense  will have a
natural downward bias.

      Selling,  general and  administrative  expenses for fiscal 1997  increased
4.0%,  from $61.0  million in fiscal 1996 to $63.5  million in fiscal 1997. As a
percentage of net sales, selling,  general and administrative expenses decreased
to 27.4% in fiscal 1997 from 29.2% in fiscal  1996.  The  increases  in selling,
general and  administrative  expenses  were  primarily  related to the Company's
retail expansion.  The decrease in selling,  general and administrative expenses
as a percentage of net sales was primarily attributable to increased operational
efficiencies  associated  with the  Company's  expansion  and the lower  cost of
operating retail stores as compared to catalog operations.

      In the fourth quarter of fiscal 1995, the Company recorded a restructuring
charge of $1.4 million,  representing the costs associated with reorganizing its
operations.  These costs included the rent and related  expenses for the closing
of 12 retail store locations, (of which 6 were closed late in the fourth quarter
of fiscal 1995 and the  remainder  were  closed in fiscal  1996),  and  expenses
related to the  consolidation  of the  Company's  distribution  centers  and the
severance and related benefits for terminated employees.

      Approximately  $.3  million  and $1.1  million  was  charged  against  the
restructuring reserve in fiscal 1997 and 1996, respectively,  and as of February
28, 1998 the restructuring was complete.

      Interest expense,  net of interest income for fiscal 1997,  increased from
$2.4  million in fiscal 1996 to $3.2  million in fiscal  1997.  The  increase in
interest  expense is  attributable  to an increase in the  Company's  bank debt,
including  the  borrowing  for  the  acquisition  of  Golf  Acquisition  Limited
Partnership and related bank debt interest rate.

Liquidity and Capital Resources

      The Company  incurred  operating  losses during fiscal 1998 and used funds
provided by its bank credit facility to meet its cash operating  needs. The bank
credit facility agreement contains certain financial covenants,  including,  but
not limited to,  maintaining  minimum  levels of tangible net worth and interest
coverage ratios and limitations on capital  expenditures.  At February 27, 1999,
the Company was in compliance with all financial covenants.

      Pursuant to an amendment  with its bank dated as of February 23, 1999, the
bank amended the credit  facility  with respect to the  commitment  level of the
facility as well as financial  covenants and advance  rates for future  periods.
The  commitment  level of the credit  facility was increased from $80 million to
$100 million. The modified covenants require the Company to maintain an interest
coverage  ratio of 2.00 : 1.00 for the second half of fiscal  1998,  2.00 : 1.00
for the nine months ended May 31, 1999,  and 2.00 : 1.00,  on a rolling 12 month
basis for each quarter,  thereafter.  The adjusted  tangible net worth as of the
last day of fourth fiscal  quarter of 1998 and first fiscal quarter of 1999 must
be at least $40.0  million,  the second and third fiscal quarter of 1999 must be
at least $41.0  million,  and for the fourth fiscal quarter 1999 and each fiscal
quarter thereafter,  adjusted tangible net worth must be at least $42.0 million.
Capital  expenditures  may not exceed  $6.75  million  for fiscal  1998 and $6.0
million for any fiscal year thereafter.

      The  Company  believes  that  projected  cash  flows  from  operations  in
combination  with current  available  resources  are  sufficient to meet working
capital  needs,  such as  store  openings  and  debt  payments.  Achievement  of
projected  cash  flows  from  operations,  however  will be  dependent  upon the
Company's  attainment of sales,  gross profit,  expense and trade support levels
that are consistent with its financial plans. Such operating performance will be
subject to  financial,  economic and other  factors  affecting  the industry and
operations of the Company,  including factors beyond its control,  and there can
be no assurance  that the  Company's  plans will be achieved.  In addition,  the
Company  borrows funds on a variable rate basis and  continued  compliance  with
loan covenants is partially  dependent on relative  interest rate stability.  If
projected  cash  flows  from  operations  are  not  realized,  or if  there  are
significant  increases in interest  rates,  then the Company may have to explore
various available alternatives,  including obtaining further modification to its
existing  lending  arrangements  or attempting to locate  additional  sources of
financing.

      The  Company's  working  capital  decreased by $10.1  million,  from $21.8
million as of February 28, 1998 to $11.7  million as of February  27, 1999.  The
decrease  resulted  primarily from an increase in the net  borrowings  under the
Company's  bank credit  facility of $36.4  million,  which was offset by a $29.1
million increase in inventory.

      During   fiscal  1998,   the  cash  used  in  operating   activities   was
approximately $29.3 million. The primary uses of the cash were for a net loss of
$7.4  million,  a $29.0  million  increase in  inventories,  and a $1.1  million
decrease in deferred  income  taxes,  all of which was offset by a $8.8  million
increase in accounts payable.

      The net cash used in investing  activities was approximately $6.4 million.
The main use of the cash was for the purchase of property and equipment required
for the Company's retail expansion.

      The net cash  provided by financing  activities  was  approximately  $35.6
million,  primarily  attributable to the increase in borrowings on the Company's
bank credit facility of $36.4 million.

      During  fiscal 1996,  the Company  entered  into a secured  line-of-credit
agreement  with a bank (the "credit  facility")  that, as amended  during fiscal
1998,  expires on December 31, 2001.  The credit  facility bears interest at the
bank's reference rate plus .75% (9.25% at February 27, 1999) or LIBOR plus 2.25%
(7.18% at  February  27,  1999).  If for any 12 month  rolling  period the fixed
charges ratio exceeds  certain limits,  as defined,  the bank's interest rate on
the credit  facility is decreased by .25% for the period  immediately  following
such rolling  period.  A commitment  fee of .375% per year of the average unused
commitment  amount, as defined,  is payable monthly.  The credit facility allows
for  borrowing  up to $100  million  based on a  percentage  of  inventory  (the
"advance rate").  Borrowings include 50% of the amounts reserved for outstanding
letters of credit.

      At February  27,  1999,  the Company had  approximately  $80.2  million of
borrowings  outstanding  and  approximately  $.4  million  of  letters of credit
outstanding.  The Company had approximately $1.0 million in available borrowings
under this  facility at February 27, 1999.  The bank has a security  interest in
substantially  all assets of the  Company.  The bank credit  facility  agreement
contains certain financial covenants, including, but not limited to, maintaining
minimum  levels  of  tangible  net  worth,  and  interest  coverage  ratios  and
limitations on capital expenditures.

      The Company anticipates that in fiscal 1999, 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  estimates  that the  cost of  opening  a new  tool  store
(exclusive of distribution center inventory) averages approximately $380,000, of
which  $315,000  consists of inventory.  The cost of opening a new golf store is
approximately $510,000, of which $375,000 consists of inventory. In each case, a
portion of the inventory  investment is financed with trade credit.  The Company
opened 22 new tool stores and 14 new golf stores, and closed 6 tool stores and 3
golf stores in fiscal 1998. For fiscal 1999, the Company currently plans to open
ten to fifteen stores.

YEAR 2000

      Like many other  companies,  the Year 2000 computer issue creates risk for
the Company.  If both information  technology systems and imbedded technology do
not correctly  recognize date  information on and subsequent to January 1, 2000,
it could have an adverse  impact on the  Company's  operations.  The  Company is
currently  updating its software to accommodate  programming logic that properly
interprets Year 2000 dates, which is planned to be completed by September, 1999.
A review of embedded  technology  used in equipment  provided by outside vendors
with the  manufacturers  of such equipment,  is planned to be completed by July,
1999. The Company does not anticipate  difficulty in resolving issues related to
embedded  technology  in the  equipment  provided  by other  manufacturers.  The
Company is also  inquiring  of important  third party  vendors  regarding  their
readiness,  and this review is planned to be completed by July, 1999. Except for
merchandising  and call center  applications,  all software is under maintenance
agreements  by software  companies  that provide  updated,  Year 2000  compliant
software.  The  Company  is in the  process  of  replacing  its call  center and
merchandising software with new, Year 2000 compliant applications to be supplied
by outside vendors at a cost estimated at approximately  $2.0 million.  This new
software  is planned to be  installed,  tested and fully  functional  by August,
1999. Funds for this expenditure will be provided by either operating activities
or the Company's revolving credit facility.

      Based on the Company's  work to date and assuming that the Company's  call
center and  merchandising  software  replacement  projects can be implemented as
planned,  the  Company  believes  that it will be Year 2000  compliant  and that
future  costs  relating to the Year 2000 issue will not have a material  adverse
impact on the Company's consolidated  financial position,  results of operations
or cash flows.

      Since  the  Company  relies on  third-party  suppliers  for many  systems,
products and services including merchandise,  telecommunications and call center
support,  the Company could be adversely affected if these suppliers do not make
necessary changes to their own systems and products successfully and in a timely
manner,  and there can be no  assurance  that such third  parties  will  provide
complete or accurate Year 2000 readiness disclosures.

      Management of the Company believes it has an effective program in place to
resolve the Year 2000 issue in a timely  manner.  Nevertheless,  since it is not
possible to  anticipate  all possible  future  outcomes,  especially  when third
parties are involved, there could be circumstances in which the Company could be
adversely affected.  For example, the Company could encounter problems in taking
customer orders, shipping products,  invoicing customers or collecting payments.
The amount of  potential  lost  revenue or related  consequences  as a result of
these unlikely contingencies has not been estimated.

      The Company expects to evaluate the status of its contingency  plans after
it has completed the  remediation  phase of the Y2K project for its  information
systems. In addressing issues not resolved or contemplated for its systems,  the
Company  plans  to  allocate   internal   resources  and  may  retain  dedicated
consultants  and  vendor  representatives  to be  available  to take  corrective
action,  if  necessary.  However,  the Company will adjust and adopt  additional
plans if situations arise requiring  modifications to existing contingency plans
or new contingency plans, as required.

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) the
Company's plans, strategies, objectives, expectations and intentions are subject
to  change  at  any  time  at the  discretion  of the  Company;  (ii)  increased
competition,  a change in the retail business in the tool and/or golf sectors or
a change in the  Company's  merchandise  mix;  (iii) a change  in the  Company's
advertising,  pricing  policies or its net product costs after all discounts and
incentives;  (iv) the Company's plans and results of operations will be affected
by the Company's  ability to manage its growth and inventory;  (v) the Company's
ability to achieve  its plans and  strategies  of growth  will be  dependent  on
maintaining adequate bank and other financing; (vi) the timing and effectiveness
of  programs  dealing  with the Year  2000  issue  and the  Company's  warehouse
management system;  and (vii) other risks and uncertainties  indicated from time
to time in the Company's filings with the Securities and Exchange Commission.

ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

      The  consolidated  Financial  Statements  and  Supplementary  Data  of the
Company are listed under Part IV, Item 14, in this Report.

ITEM 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

      There were no  disagreements  on  accounting  principles  or  practices or
financial  statement  disclosure  between the Company and its accountants during
the fiscal year ended February 27, 1999.

PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

      The  information  required  by this  Item  10 is  hereby  incorporated  by
reference to the text appearing  under Part I, Item 1 Business under the caption
"Executive  Officers and Other  Significant  Employees"  in this report,  and by
reference to the Company's definitive proxy statement to be filed by the Company
within 120 days after the close of its fiscal year.

ITEM 11.  EXECUTIVE COMPENSATION

      The  information  required  by this  Item  11 is  hereby  incorporated  by
reference to the Company's definitive proxy statement to be filed by the Company
within 120 days after the close of its fiscal year.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

      The  information  required  by this  Item  12 is  hereby  incorporated  by
reference to the Company's definitive proxy statement to be filed by the Company
within 120 days after the close of its fiscal year.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

      The  information  required  by this  Item  13 is  hereby  incorporated  by
reference to the Company's definitive proxy statement to be filed by the Company
within 120 days after the close of its fiscal year.

PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(A)(1)   CONSOLIDATED FINANCIAL STATEMENTS                                  Page

 Report of Independent Public Accountants.................................. F-2
 Consolidated Balance Sheets as of February 27, 1999 and
     February 28, 1998..................................................... F-3
 Consolidated Statements of Operations for the Fiscal Years Ended
     February 27, 1999, February 28, 1998 and March 1, 1997................ F-4
 Consolidated Statements of Stockholders' Equity for the Fiscal Years
     Ended February 27, 1999, February 28, 1998 and March 1, 1997.......... F-5
 Consolidated Statements of Cash Flows for the Fiscal Years Ended
     February 27, 1999, February 28, 1998, and March 1, 1997............... F-6
 Notes to Consolidated Financial Statements................................ F-7

(A)(2)   FINANCIAL STATEMENT SCHEDULES

      Schedule II  -- Valuation and Qualifying Accounts.................... S-1

      Other  schedules are omitted  because of the absence of  conditions  under
which they are  required or because  the  required  information  is given in the
financial statements or notes thereto.

(A)(3)   EXHIBITS

      Exhibit
       Number                      Reference

     **  3.01    Revised Articles of Organization, as amended.              A

     **  3.02    Restated By-Laws.                                          A

     **  4.01    Specimen Certificate of Class A Common Stock.              A

     **  4.02    Description of Capital Stock (contained in the Form        A
                 of the Registrant's Restated Articles of Organization
                 referenced above).

   *,** 10.01    1993 Amended and Restated Stock Option Plan.               A

   *,** 10.02    1994 Non-Qualified Stock Option Plan For Non-              A
                 Employee Directors.

   *,** 10.03    Form of Indemnification Agreement for directors            A
                 and officers of Registrant.

     ** 10.07    Agreement of Merger dated as of July 1, 1993               A
                 between Coburn Investments, Inc. and the Registrant.

     ** 10.08    Master Note dated November 20, 1993, payable to            A
                 Coburn Investments, Inc. to the Registrant, with
                 related Loan and Security Agreement.

     ** 10.10    Commercial Lease dated December 3, 1987, as amended        A
                 as of November 1, 1993, between Stanley D. Black
                 Trustee of Mystic Limited Realty Trust and the
                 Registrant.

     ** 10.11    Three Promissory Notes, dated July 1, 1989, payable        A
                 by the Registrant to Stanley D. Black, and related
                 Security Agreement.

     ** 10.12    Warehouse lease dated July 11, 1994 between Syroco,        B
                 Inc. and the Registrant.

     ** 10.13    Loan and Security Agreement dated July 3, 1996             C

     ** 10.14    Purchase and Sale Agreement dated as of December 19,       D
                 1994 between Post Tool, Inc. and the Registrant.

     ** 10.15    Asset Purchase Agreement dated as of December 31,          E
                 1997 between Golf Acquisitions Limited Partnership
                 and the Registrant

        10.16    Amended and Restated Loan and Security                  Filed
                 Agreement dated February 23, 1999                      herewith

     ** 21.01    Subsidiaries of the Registrant.                            F

        23.01    Consent of Arthur Andersen LLP.                         Filed
                                                                        herewith

        27.00    Financial Data Schedule                     Filed herewith only
                                                             in electronic form

A     Incorporated by reference to the Company's  registration statement on Form
      S-1  (Registration  No.  33-78772)  and by reference to Exhibit 3.0 to the
      Company's  quarterly  report on Form  10-Q for the  fiscal  quarter  ended
      August 31, 1996.  The number set forth herein is the number of the Exhibit
      in said registration statement.

B     Incorporated by reference to Exhibit 7.1 to the Company's current report
      on Form 8-K dated July 11, 1994.

C     Incorporated  by reference to Exhibit 10.0 to the  Company's  quarterly
      report on Form 10-Q for the fiscal  quarter ended August 31, 1996.

D     Incorporated by reference to Exhibit 1 to the Company's current report on
      Form 8-K dated January 1, 1995.

E     Incorporated by reference to Exhibit 10.15 to the Company's annual report
      on Form 10-K for the fiscal year ended February 28, 1998.

F     Incorporated by reference to Exhibit 21.01 to the Company's annual report
      on Form 10-K for the fiscal year ended March 2, 1996.

*     Management contract or compensatory plan or arrangement.

**    In accordance with Rule 12b-32 under the Securities  Exchange Act of 1934,
      as amended,  reference is made to the documents  previously filed with the
      Securities   and  Exchange   Commission,   which   documents   are  hereby
      incorporated by reference.

(B)   REPORTS ON FORM 8-K

      None

SIGNATURES

      Pursuant  to the  requirements  of Section  13 or 15(d) 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.


Date: May 26, 1999                 By: /s/ Stanley D. Black
                                       ------------------------------
                                       Stanley D. Black, Chief Executive Officer

      Pursuant to the requirements of the Securities  Exchange Act of 1934, this
report  has  been  signed  below  by the  following  persons  on  behalf  of the
registrant and in the capacities and on the date indicated.

      SIGNATURE                          TITLE                           DATE

/s/  STANLEY D. BLACK     Director and Chief Executive Officer      May 26, 1999
---------------------
Stanley D. Black

/s/ KARL P. SNIADY        Director and Executive Vice President,    May 26, 1999
---------------------     Finance and Administration (Principal
Karl P. Sniady            Financial and Accounting Officer)

/s/ RONALD L. FRANKLIN    Director                                  May 26, 1999
---------------------
Ronald L. Franklin

/s/ RICHARD GRINER        President, Chief Operating Officer        May 26, 1999
---------------------     and Director
Richard Griner

s/ RICHARD A. MANDELL     Director                                  May 26, 1999
---------------------
Richard A. Mandell

/s/ IRWIN WINTER          Director                                  May 26, 1999
---------------------
Irwin Winter
<PAGE>
                        TREND-LINES, INC. AND SUBSIDIARY
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

                                                                            PAGE

Report of Independent Public Accountants                                     F-2

Consolidated Balance Sheets as of February 27, 1999 and February 28,1998     F-3

Consolidated Statements of Operations for the Fiscal Years Ended
 February 27,1999, February 28,1998 and March 1, 1997                        F-4

Consolidated Statements of Stockholder's Equity for the Fiscal Years
 Ended February 27,1999, February 28,1998, and March 1, 1997                 F-5

Consolidated Statements of Cash Flows for the Fiscal Years Ended
 February 27,1999, February 28,1999, and March 1, 1997                       F-6

Notes to Consolidated Financial Statements                                   F-7
<PAGE>
                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Trend-Lines, Inc.:

We have audited the  accompanying  consolidated  balance sheets of  Trend-Lines,
Inc. (a  Massachusetts  corporation)  and subsidiary as of February 27, 1999 and
February  28,  1998,  and the related  consolidated  statements  of  operations,
stockholders'  equity  and cash flows for the years  ended  February  27,  1999,
February  28,  1998,  and March 1,  1997.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  Trend-Lines,   Inc.  and
subsidiary  as of February 27, 1999,  and February 28, 1998,  and the results of
their  operations  and their cash flows for the years ended  February  27, 1999,
February  28, 1998 and March 1, 1997,  in  conformity  with  generally  accepted
accounting principles.

Our  audits  were  made for the  purpose  of  forming  an  opinion  on the basic
consolidated  financial  statements taken as a whole. The schedule listed in the
index at item 14(a)(2) is the responsibility of the Company's  management and is
presented  for  purposes  of  complying   with  the   Securities   and  Exchange
Commission's  rules  and  is  not  part  of  the  basic  consolidated  financial
statements.  The schedule has been subjected to the auditing  procedures applied
in our  audits  of the  basic  consolidated  financial  statements  and,  in our
opinion, fairly states, in all material respects, the financial data required to
be set forth therein in relation to the basic consolidated  financial statements
taken as a whole.


                                                   /S/ ARTHUR ANDERSEN LLP
Boston, Massachusetts
April 23, 1999

<PAGE>
                        TREND-LINES, INC. AND SUBSIDIARY
                           CONSOLIDATED BALANCE SHEETS
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

                                     ASSETS

<TABLE>
<CAPTION>
                                                                           February 27,   February 28,
                                                                               1999           1998
                                                                           ------------   ------------
<S>                                                                         <C>            <C>
CURRENT ASSETS:
  Cash and cash equivalents                                                 $     540      $     669
  Accounts receivable, net                                                     22,270         18,546
  Inventories                                                                 131,219        102,172
  Prepaid expenses and other current assets                                     9,508          6,906
                                                                            ---------      ---------

           Total current assets                                               163,537        128,293

PROPERTY AND EQUIPMENT, NET                                                    21,413         19,387

INTANGIBLE ASSETS, NET                                                          6,621          6,973

OTHER ASSETS                                                                    1,367            799
                                                                            ---------      ---------

                                                                            $ 192,938      $ 155,452
                                                                            =========      =========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
  Bank credit facility                                                      $  80,152      $  43,801
  Current portion of capital lease obligations                                  1,028            777
  Accounts payable                                                             62,589         53,830
  Accrued expenses                                                              8,056          8,111
                                                                            ---------      ---------

           Total current liabilities                                          151,825        106,519
                                                                            ---------      ---------

CAPITAL LEASE OBLIGATIONS, NET OF CURRENT PORTION                                 671          1,182
                                                                            ---------      ---------

COMMITMENTS AND CONTINGENCIES (NOTE 11)

STOCKHOLDERS' EQUITY:
  Common stock, $.01 par value -
    Class A --
      Authorized - 20,000,000 shares
      Issued - 6,469,553 and 6,385,178 shares at
        February 27, 1999 and February 28, 1998, respectively                      64             64
    Class B --
      Authorized - 5,000,000 shares
      Issued and outstanding - 4,681,082 and 4,738,066 shares at
        February 27, 1999 and February 28, 1998, respectively                      47             47
Additional paid-in capital                                                     41,625         41,524
Retained earnings                                                               1,166          8,576
Less: 500,000 Class A shares held in treasury at February 27, 1999
      and February 28, 1998, at cost                                           (2,460)        (2,460)
                                                                            ---------      ---------

           Total stockholders' equity                                          40,442         47,751
                                                                            ---------      ---------

                                                                            $ 192,938      $ 155,452
                                                                            =========      =========
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
                        TREND-LINES, INC. AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF OPERATIONS
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
                                                                         FISCAL YEARS ENDED

                                                             February 27,    February 28,   March 1,
                                                                 1999            1998         1997
                                                             ------------    -----------   -----------
<S>                                                          <C>             <C>           <C>
NET SALES                                                    $    262,550    $   231,143   $   208,582
COST OF SALES                                                     181,577        157,129       139,871
                                                             ------------    -----------   -----------

  Gross Profit                                                     80,973         74,014        68,711

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES                       86,393         63,483        61,045
                                                             ------------    -----------   -----------

  (Loss) Income from operations                                    (5,420)        10,531         7,666

INTEREST EXPENSE, NET                                               5,580          3,239         2,355
                                                             ------------    -----------   -----------

  (Loss) Income before (benefit) provision for income taxes       (11,000)         7,292         5,311

(BENEFIT) PROVISION FOR INCOME TAXES                               (3,590)         2,844         2,061
                                                             ------------    -----------   -----------

  Net (Loss) income                                          $     (7,410)   $     4,448   $     3,250
                                                             ============    ===========   ===========


BASIC NET (LOSS) INCOME PER SHARE                            $      (0.70)   $      0.42   $      0.30
                                                             ============    ===========   ===========

DILUTED NET (LOSS) INCOME PER SHARE                          $      (0.70)   $      0.40   $      0.29
                                                             ============    ===========   ===========

BASIC WEIGHTED AVERAGE SHARES OUTSTANDING (Note 2)             10,648,366     10,588,021    10,973,416
                                                             ============    ===========   ===========

DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING (Note 2)           10,648,366     11,122,417    11,255,362
                                                             ============    ===========   ===========
</TABLE>

        THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED
                              FINANCIAL STATEMENTS.

<PAGE>
                       TREND-LINES, INC. AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
               (IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                           CLASS A               CLASS B
                                        COMMON STOCK          COMMON STOCK    Additional             TREASURY STOCK       Total
                                    Number      $.01      Number       $.01    Paid-in   Retained   Number            Stockholders'
                                   of Shares  Par Value  of Shares   Par Value Capital   Earnings  of Shares  Amount      Equity
                                   ---------  ---------  ---------   --------- -------   --------  ---------  ------      ------

<S>                                 <C>         <C>      <C>           <C>     <C>       <C>        <C>      <C>         <C>
BALANCE, MARCH 2, 1996              6,252,965   $  62    4,790,911     $  48   $41,300   $   878         --  $    --     $ 42,288

  Conversion of Class B shares to
    Class A shares                     40,885       1      (40,885)       (1)       --        --         --       --           --

  Proceeds from exercise of stock
    options                             8,684      --           --        --        18        --         --       --           18

  Treasury stock purchase                  --      --           --        --        --        --    440,000   (2,150)      (2,150)

  Net income                               --      --           --        --        --     3,250         --       --        3,250
                                    ---------   -----   ----------     -----   -------   -------    -------  -------     --------

BALANCE, MARCH 1, 1997              6,302,534   $  63    4,750,026     $  47   $41,318   $ 4,128    440,000  $(2,150)    $ 43,406

  Conversion of Class B shares to
    Class A shares                     11,960      --      (11,960)       --        --        --         --       --           --

  Proceeds from exercise of stock
    options                            70,684       1           --        --       206        --         --       --          207

  Treasury stock purchase                  --      --           --        --        --        --     60,000     (310)        (310)

  Net income                               --      --           --        --        --     4,448         --       --        4,448
                                    ---------   -----   ----------     -----   -------   -------    -------  -------     --------

BALANCE, FEBRUARY 28, 1998          6,385,178   $  64    4,738,066     $  47   $41,524   $ 8,576    500,000  $(2,460)    $ 47,751

  Conversion of Class B shares to
    Class A shares                     56,984      --      (56,984)       --        --        --         --       --           --

  Proceeds from exercise of stock
    options                            27,391      --           --        --       101        --         --       --          101

  Net loss                                 --      --           --        --        --    (7,410)        --       --       (7,410)

BALANCE, FEBRUARY 27, 1999          6,469,553   $  64    4,681,082     $  47   $41,625   $ 1,166    500,000  $(2,460)    $ 40,442
                                    =========   =====   ==========     =====   =======   =======    =======  =======     ========

</TABLE>

       THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED
                             FINANCIAL STATEMENTS.

<PAGE>
                        TREND-LINES, INC. AND SUBSIDIARY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                         FISCAL YEARS ENDED
                                                                         ------------------
                                                              February 27,   February 28,   March 1,
                                                                  1999          1998          1997
                                                              -----------    -----------    --------
<S>                                                             <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net (loss) income                                             $ (7,410)     $  4,448      $  3,250
  Adjustments to reconcile net (loss) income to net cash
  (used in) provided by operating activities
    Depreciation and amortization                                  4,738         2,836         1,832
    Deferred income taxes                                         (1,075)          216           601
      Accounts receivable                                         (3,724)       (6,391)       (3,836)
      Inventories                                                (29,047)      (14,296)      (17,024)
      Prepaid expenses and other current assets                   (1,643)         (405)        3,113
      Accounts payable                                             8,759         5,695        13,424
      Accrued expenses                                                62           904          (912)
                                                                --------      --------      --------

        Net cash (used in) provided by operating activities      (29,340)       (6,993)          448
                                                                --------      --------      --------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchases of property and equipment                             (5,830)       (7,188)       (3,500)
  Proceeds from sale of property and equipment                        16            73            70
  Acquisition, net of cash acquired                                   --        (4,064)           --
  Decrease in other assets                                          (568)           --          (459)
                                                                --------      --------      --------

        Net cash used in investing activities                     (6,382)      (11,179)       (3,889)
                                                                --------      --------      --------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Net borrowings under bank credit facilities                     36,351        18,605         6,713
  Net payments on capital lease obligations                         (859)         (667)         (570)
  Proceeds from exercise of stock options                            101           207            18
  Purchases of treasury stock                                         --          (310)       (2,150)
                                                                --------      --------      --------

        Net cash provided by financing activities                 35,593        17,835         4,011
                                                                --------      --------      --------

NET (DECREASE) INCREASE  IN CASH AND CASH EQUIVALENTS               (129)         (337)          570

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                       669         1,006           436
                                                                --------      --------      --------

CASH AND CASH EQUIVALENTS, END OF PERIOD                        $    540      $    669      $  1,006
                                                                ========      ========      ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
  Cash paid for -
    Interest                                                    $  5,489      $  3,212      $  2,650
                                                                ========      ========      ========
    Income taxes                                                $  1,912      $  2,418      $    176
                                                                ========      ========      ========

SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING AND
FINANCING ACTIVITIES:
  Equipment acquired under capital lease obligations            $    598      $     65      $    322
                                                                ========      ========      ========

  Summary of entity acquired -
    Fair value of assets acquired                                     --         9,273            --
                                                                --------      --------      --------
    Liabilities assumed                                               --         5,209            --
                                                                --------      --------      --------
    Cash paid, net of cash acquired                             $     --      $  4,064      $     --
                                                                ========      ========      ========
</TABLE>

        SEE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONSOLIDATED
                             FINANCIAL STATEMENTS.

<PAGE>
                        TREND-LINES, INC. AND SUBSIDIARY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1)   OPERATIONS

      Trend-Lines,  Inc.  (the  Company) is a specialty  retailer,  primarily of
      woodworking tools and accessories sold through its nationally  distributed
      Trend-Lines  mail-order catalog and through  Woodworkers  Warehouse retail
      stores  located in New England,  New York,  New Jersey,  Pennsylvania  and
      Delaware,  as well as Post Tool stores  located in California  and Nevada.
      The Company is also a specialty  retailer of golf  equipment  and supplies
      sold through its Golf Day retail stores located in New England,  New York,
      New Jersey,  Delaware,  Pennsylvania  and  California  and its  nationally
      distributed mail-order catalog.

(2)   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

      The accompanying consolidated financial statements reflect the application
      of certain accounting policies described in this note and elsewhere in the
      accompanying notes to consolidated financial statements.

      (a) Principles of Consolidation

      The accompanying consolidated financial statements include the accounts of
      the  Company  and Post  Tool,  Inc.,  its  wholly  owned  subsidiary.  All
      significant intercompany balances and transactions have been eliminated in
      consolidation.

      (b) Fiscal Year

      The Company's  fiscal year-end is the Saturday  closest to the last day of
      February.  Fiscal year 1998 ended on February 27,  1999,  Fiscal year 1997
      ended on  February  28,  1998 and Fiscal year 1996 ended on March 1, 1997.
      For  interim  reporting  purposes,  the  Company  closes  its books on the
      Saturday of the thirteenth week of the fiscal quarter.

      (c) Management Estimates Used in the Preparation of Financial Statements

      The  preparation  of financial  statements  in conformity  with  generally
      accepted  accounting  principles requires management to make estimates and
      assumptions that affect the reported amounts of assets and liabilities and
      disclosure  of  contingent  assets  and  liabilities  at the  date  of the
      financial  statements  and the  reported  amounts of revenues and expenses
      during the  reporting  period.  Actual  results  could  differ  from those
      estimates.

      (d) Cash and Cash Equivalents

      The  Company  considers  all  highly  liquid   investments  with  original
      maturities of three months or less to be cash equivalents.

      (e) Revenue Recognition

      Revenue from retail operations is recognized at the time of sale.  Revenue
      from catalog sales is recognized upon shipment to the customer.

      (f) Inventories

      The Company  values  inventories,  which consist of  merchandise  held for
      resale, at the lower of cost (weighted average) or market.

      (g) Prepaid Catalog Expenses

      The Company  has  adopted  the  American  Institute  of  Certified  Public
      Accountants  (AICPA)  Statement  of  Position  (SOP)  93-7,  Reporting  on
      Advertising Costs, and capitalizes direct costs relating to the production
      and  distribution of its mail-order  catalogs.  These costs are charged to
      operations  over the period that  revenues  are  derived from the mailings
      which is predominately 1 year or less from the date of mailing.

      (h) Store Preopening Costs

      The Company  expenses,  as incurred,  all preopening costs related to each
      new retail store  location,  in accordance  with (SOP) 98-5,  Reporting on
      Cost of Start-up Activities.

      (i) Property and Equipment

      Property and equipment are stated at cost.  Depreciation  and amortization
      are  computed  under both the  straight-line  and  accelerated  methods in
      amounts that allocate the cost of all assets over their  estimated  useful
      lives.

                                                       Estimated
            Asset Classification                      Useful Lives

          Equipment                                   5 - 10 years
          Equipment under capital leases       Life of lease, or life of asset,
                                                    whichever is shorter
          Furniture and fixtures                         10 years
          Building                                       39.5 years
          Leashold improvements                  Initial lease term or life
                                              of asset, whichever is shorter

      (j) Customer Prepayments

       Advance payments received from customers are included in accrued expenses
       in the  accompanying  consolidated  balance  sheets and are recognized as
       revenue upon shipment.

      (k) Concentration of Credit Risk

      Financial  instruments  that  subject the  Company to credit risk  consist
      primarily of cash and cash equivalents and trade accounts receivable.  The
      Company  places its cash and cash  equivalents  in highly rated  financial
      institutions. The Company's accounts receivable credit risk is not limited
      to any  particular  customer.  The  Company  maintains  an  allowance  for
      potential credit losses.

      (l) Fair Value of Financial Instruments

      The  Company's  financial  instruments  consist  mainly  of cash  and cash
      equivalents  and its bank credit  facility.  The  carrying  amounts of the
      Company's  cash and cash  equivalents  approximate  fair  value.  The bank
      credit  facility bears interest at variable market rates;  therefore,  the
      carrying amount approximates fair value.

      (m) Credit Card Policy

      The Company extends credit to customers through  third-party credit cards,
      including its  private-label  credit card.  Credit under these accounts is
      extended by third  parties,  and  accordingly,  the Company  bears minimal
      financial  risk  from  credit  card  fraud  under  these  agreements.  The
      Company's  agreements with third-party  credit  companies  provide for the
      electronic  processing of credit  approvals and  electronic  submission of
      transactions. Upon the submission of these transactions to the credit card
      companies,  payment is transmitted  directly to the Company's bank account
      usually within two to four days of the sales transaction. Amounts relating
      to fiscal  year sales not  received  by the Company  before  year-end  are
      included in accounts receivable in the accompanying  consolidated  balance
      sheets.  Fees  incurred  on credit  card sales are  included  in  selling,
      general and administrative expenses.

      (n) Income Taxes

      Income taxes are provided  using the  liability  method of  accounting  in
      accordance  with Statement of Financial  Accounting  Standards  (SFAS) No.
      109,  Accounting  for Income  Taxes.  A deferred tax asset or liability is
      recorded  for  all  temporary   differences   between  financial  and  tax
      reporting.  Deferred  tax expense  (benefit)  results  from the net change
      during the year of deferred tax assets and liabilities.

      (o) Earnings Per Share

      In February 1997, the Financial Accounting Standards Board issued SFAS No.
      128 Earning Per Share,  which changed the method of  calculating  earnings
      per share.  SFAS 128 requires  the  presentation  of "basic"  earnings per
      share and  "diluted"  earnings  per  share.  Basic  earnings  per share is
      computed by dividing the net income  available to common  shareholders  by
      the weighted average number of shares of common stock outstanding. For the
      purposes  of  calculating  diluted  earnings  per share,  the  denominator
      includes both the weighted average number of common stock  outstanding and
      the dilutive effect of common stock  equivalents such as stock options and
      warrants.  The Company  adopted  SFAS 128 in the fourth  quarter of fiscal
      1997. All prior period per share amounts have been restated to comply with
      SFAS 128.

      Potentially  dilutive  securities  include  outstanding  options under the
      Company's  stock option plan. For the fiscal year ended February  27,1999,
      the diluted  earnings per share  calculation  has been computed  using the
      basic  weighted  average shares  outstanding,  as the effect of options is
      anti-dilutive. The number of potentially dilutive shares excluded from the
      earnings per share  calculation was 198,094 for fiscal year ended February
      27, 1999.  Below is a summary of the shares used in calculating  basic and
      diluted earnings per share:

                                                   Fiscal Years Ended
                                        February 27,   February 28,    March 1,
                                           1999           1998           1997
Weighted average number of shares of
      common stock outstanding          10,648,366     10,588,021     10,973,416
Dilutive stock options                           0        534,396        281,946
                                        ----------     ----------     ----------
Shares used in calculating diluted
      earnings per share                10,648,366     11,122,417     11,255,362
                                        ==========     ==========     ==========

      (p) Impairment of Long-Lived Assets

      The Company  accounts for  long-lived  assets in accordance  with SFAS No.
      121, Accounting for the Impairment of Long-Lived Assets and for Long-Lived
      Assets to be Disposed Of. The Company  continually  reviews its long-lived
      assets for events or changes in circumstances that might indicate that the
      carrying amount of the assets may not be recoverable. The Company assesses
      the  recoverability  of assets by determining  whether the depreciation of
      such assets over their remaining lives can be recovered  through projected
      undiscounted  future  cash  flows.  The amount of  impairment,  if any, is
      measured based on projected  discounted future cash flows using a discount
      rate  commensurate  with the risk involved.  At February 27, 1999, no such
      impairment of assets was indicated.

      Goodwill  represents the excess of the purchase price over the fair market
      value of identified net assets acquired. Goodwill is being amortized using
      the  straight-line  method over a period of 20 years, the estimated useful
      life.  The Company  recognized  $351,000 of goodwill  amortization  during
      fiscal 1998 and $35,158 in fiscal 1997. The Company continually  evaluates
      whether  events and  circumstances  have  occurred  that indicate that the
      remaining  estimated useful life of goodwill may not be recoverable.  When
      factors   indicate  that   goodwill   should  be  evaluated  for  possible
      impairment, the Company uses estimates of undiscounted operating cash flow
      over the  remaining  life of the goodwill to measure  whether  goodwill is
      recoverable.  As of February 27, 1999,  there have been no  write-downs of
      goodwill.

      (q) Reclassifications

      Certain  amounts  in the  prior  year's  financial  statements  have  been
      reclassified in order to conform with the current year's presentation.

(3)   ACQUISITION

      Effective December 31, 1997, the Company acquired substantially all of the
      assets and liabilities of Golf Acquisition  Limited Partnership (GALP) for
      approximately  $4.0  million  in  cash.  The  Company  accounted  for  the
      acquisition  of GALP  using  the  purchase  method of  accounting  and the
      purchase  price was  allocated to the net  liabilities  assumed based upon
      their estimated fair market values. The operating results of this business
      are included in the consolidated statements of operations from the date of
      acquisition.

      The excess  purchase  price over net  liabilities  assumed  (goodwill) was
      computed as follows.

      Purchase price (including expenses), net of cash acquired     $ 4,064,000

      Plus-fair market value assigned to net liabilities

            Inventory                                       1,973,000
            Other assets                                      269,000
            Accounts payable                               (4,235,000)
            Accrued liabilities                              (974,000)
                                                           -----------

                                                           (2,967,000)
                                                           -----------

            Goodwill                                      $ 7,031,000
                                                          ===========

      The following unaudited pro forma information (rounded to thousands except
      share and per share amounts) shows the results of the Company's operations
      for the year ended February 28, 1998, as if the  acquisition  had occurred
      on March 2, 1997.

            Revenues                                        $ 250,888
            Income from operations                             10,948
            Net income                                          4,551
            Pro forma basic net income per share               $ 0.43
            Pro forma diluted net income per share             $ 0.41
            Basic weighted average shares outstanding      10,588,021
            Diluted weighted average share outstanding     11,122,417

      The pro forma results have been prepared for comparative purposes only and
      are not necessarily indicative of the actual results of operations had the
      acquisition  taken place as of March 2, 1997 or the results that may occur
      in the future.  Furthermore,  the pro forma  results do not give effect to
      all cost savings or  incremental  costs that may occur as a result of  the
      integration and consolidated of the companies.

(4)   INCOME TAXES

      The  components of the (benefit) provision   for income taxes shown in the
      consolidated statements of operations are as follows (in thousands):

                                          Fiscal Years Ended

                       February 27, 1999   February 28, 1998       March 1, 1997

Current
   Federal                  ($3,400)             $2,454                   $1,186
   State                        885                 174                      274
                       -----------------   -----------------       -------------

                             (2,515)              2,628                    1,460
                       -----------------   -----------------       -------------

Deferred
   Federal                      173                (123)                     587
   State                     (1,248)                339                       14
                       -----------------   -----------------       -------------

                             (1,075)                216                      601
                       -----------------   -----------------       -------------

                             ($3,590)            $2,844                   $2,061
                       =================   =================       =============

      The  reconciliation  of  the  federal  statutory  rate  to  the  (benefit)
      provision for income taxes is as follows:


                                          Fiscal Years Ended

                               February 27, 1999 February 28, 1998 March 1, 1997

Income tax (benefit) provision
   at federal statutory rate         (34.0%)            34.0%           34.0%
State taxes, net of federal
   benefit                            (4.4%)             5.0%            4.8%
Other, net                             5.8%               -               -
                                       ---              ----            ----


                                     (32.6%)            39.0%           38.8%
                                     =======            =====           =====

      The  components  of  the  net  deferred  income  taxes  recognized  in the
      accompanying  consolidated  balance sheets with the approximate income tax
      effect  of  each  type  of  temporary   differences  are  as  follows  (in
      thousands):

                                           February 27, 1999   February 28, 1998

Inventories                                       $1,206              $842
Prepaid catalog                                     (710)             (565)
State operating loss carryforward                  1,300                -
Other nondeductible reserves and accruals             82               473
Depreciation and amortization                       (290)             (238)
                                                  -------             -----

                                                  $1,588              $512
                                                  ======              =====

      At February 27, 1999, the Company had approximately $11.3 million of state
      operating loss carryforwards, which expire in 2003.

(5)   BANK CREDIT FACILITY

      During  fiscal 1996,  the Company  entered  into a secured  line-of-credit
      agreement with a bank (the credit facility) that, as amended during fiscal
      1998,  expires on December 31, 2001. The credit facility bears interest at
      the bank's  reference rate plus .75% (9.25% at February 27, 1999) or LIBOR
      plus 2.25%  (7.18% at  February  27,  1999).  If for any 12 month  rolling
      period the fixed charges ratio exceeds  certain  limits,  as defined,  the
      bank's  interest rate on the credit  facility is decreased by .25% for the
      period  immediately  following  such rolling  period.  A commitment fee of
      .375% per year of the average unused  commitment  amount,  as defined,  is
      payable  monthly.  The credit  facility  allows for  borrowing  up to $100
      million based on a percentage of inventory (the advance rate).  Borrowings
      include 50% of the amounts reserved for outstanding letters of credit.

      At February  27,  1999,  the Company had  approximately  $80.2  million of
      borrowings  outstanding and approximately $.4 million of letters of credit
      outstanding.  The  Company had  approximately  $1.0  million in  available
      borrowings  under this  facility  at  February  27,  1999.  The bank has a
      security  interest in  substantially  all assets of the Company.  The bank
      credit facility agreement contains certain financial covenants, including,
      but not limited to, maintaining  minimum levels of tangible net worth, and
      interest  coverage  ratios and  limitations  on capital  expenditures.  At
      February  27,  1999,  the Company  was in  compliance  with all  financial
      covenants.

      Pursuant to an amendment  with its bank dated as of February 23, 1999, the
      borrowing base of the credit facility was increased to a maximum amount of
      $100  million.  The advance rate was increased to 65% through the last day
      of May, 1999, 70% from the first day of June, 1999 through the last day of
      October, 1999, and 65% thereafter.  The Company is required to maintain an
      interest  coverage  ratio of 2.00:1.00 for the second half of fiscal 1998,
      2.00:1.00  for the nine months ended May 31,  1999,  and  2.00:1.00,  on a
      rolling 12 month basis for each quarter, thereafter. The adjusted tangible
      net  worth as of the last day of the  fourth  fiscal  quarter  of 1998 and
      first fiscal  quarter of 1999 must be at least $40.0  million,  the second
      and third fiscal quarter of 1999 must be at least $41.0  million,  and for
      the fourth fiscal quarter 1999 and each fiscal quarter thereafter adjusted
      tangible net worth must be at least $42.0  million.  Capital  expenditures
      may not exceed  $6.75  million  for fiscal  1998 and $6.0  million for any
      fiscal year thereafter.

(6)   STOCKHOLDERS' EQUITY

      (a) Stock Splits

      On  August  8,  1995,  the  Company's   Board  of  Directors   approved  a
      three-for-two  stock  split of the Class A common  stock,  effected in the
      form of a stock  dividend.  The record date for the stock split was August
      24, 1995,  and the dividend was paid on September 1, 1995. The stock split
      has  been  retroactively   reflected  in  the  accompanying   consolidated
      statements and notes for all periods presented.

      A stock split for the  Company's  Class B common stock was not effected at
      the same time as the Class A because the number of authorized shares would
      have  been  exceeded.  As a  result,  Class B  common  stockholders  had a
      conversion  feature of one and one half-to-one of Class A common stock. At
      its  annual  meeting  on July 17,  1996,  the  stockholders  authorized  a
      three-for-two stock split of the Class B common stock effected in the form
      of a stock dividend.  No additional  shares were required to be authorized
      due to the  fact  that  enough  Class B common  shares  had  already  been
      converted to Class A common shares,  therefore;  the Class B common shares
      on a post-split basis did not exceed the authorized  limit.  Each share of
      the Class B common stock is  convertible  into one share of Class A common
      stock.   The  stock  split  has  been   retroactively   reflected  in  the
      accompanying consolidated statements and notes for all periods presented.

      (b) Common Stock

      The rights and privileges of the common stockholders are as follows:

      Voting Rights

      Holders  of Class A  common  stock  are  entitled  to one vote per  share.
      Holders  of Class B common  stock  are  entitled  to 10 votes  per  share.
      Holders of both classes are entitled to vote  together as one class on all
      matters,  with certain  exceptions,  including  the election of directors.
      Each share of Class B common stock is  convertible to one share of Class A
      common stock.

      Dividends

      Holders of Class A common stock and Class B common stock taken together as
      a single class are  entitled to receive such  dividends as may be declared
      by the Board of Directors.

      (c) Preferred Stock

      On May 9, 1994, the Board of Directors and stockholders voted to authorize
      1,000,000  shares  of  preferred  stock,  $.01  par  value.  The  Board of
      Directors  has the right to  establish  any right and  preferences  of any
      series of preferred stock it so designates. At February 27, 1999, February
      28, 1998, and March 1, 1997, there were no issued or outstanding shares of
      preferred  stock and the Board of Directors had not established any rights
      or preferences.

      (d) Stock Option Plans

      On September 30, 1993,  the Board of Directors and  stockholders  approved
      the 1993 Employee Stock Option Plan (the Option Plan),  which provides for
      the  grant of  options  to  purchase  shares  of  Class A common  stock to
      employees of the Company.  An employee's right to exercise such options is
      subject  to  vesting,  generally  over  four  to  seven  years  or in such
      percentages as defined by the Board of Directors,  and terminates 10 years
      from the date of  grant.  A total of  2,275,000  shares  of Class A common
      stock have been reserved for options to be granted under the Option Plan.

      On May 9, 1994, the Board of Directors and stockholders  approved the 1994
      Non-Qualified  Stock Option Plan for Non-Employee  Directors (the Director
      Plan),  which provides for the grant of non-qualified  options to purchase
      shares of Class A common stock to non-employee directors of the Company. A
      total of 90,000  shares of Class A common  stock  have been  reserved  for
      options to be granted  under the Director  Plan.  These options vest three
      years  after the date of grant  and  terminate  10 years  from the date of
      grant.

      Activity under the Option Plan and Director Plan is summarized as follows:
<TABLE>
<CAPTION>

                                      Option Plan                  Director Plan
                                Number     Exercise Price     Number      Exercise Price
                                Of Shares    per Share       of Shares      per Share

<S>                              <C>         <C>              <C>           <C>
Outstanding, March 2, 1996         995,147  $1.84 -$9.58        40,500     $8.67 -$10.00
      Granted                      730,975   4.25 - 4.88        40,000      4.00 -  4.99
      Terminated                  (582,980)  1.84 - 9.58       (40,500)     8.67 - 10.00
      Exercised                     (8,684)  1.84 - 4.38           -             -
                                ----------   -----------       --------     ------------

Outstanding, March 1, 1997       1,134,458   1.84 - 4.88        40,000      4.00 -  4.88
      Granted                      158,550   5.75 - 7.06         3,000      7.00 -  7.06
      Terminated                  (107,940)  1.84 - 9.58           -             -
      Exercised                    (70,680)  1.84 - 4.38           -             -
                                ----------   -----------       --------     ------------

Outstanding, February 28, 1998   1,114,388   1.84 - 7.06        43,000      4.00 -  7.06
      Granted                      233,950      4.50             2,000         4.50
      Terminated                  (122,483)  1.84 - 7.06       (10,500)        4.00
      Exercised                    (14,890)  1.84 - 7.06       (12,500)     4.00 -  7.06
                                ----------   -----------       --------     ------------
Outstanding, February 27, 1999   1,210,965  $1.84 -$7.06        22,000     $4.00 - $7.06
                                ==========  =============       ========    ============

Exercisable, February 27, 1999     531,636  $1.84 -$7.06           -       $     -
                                ==========  =============       ========    ============
</TABLE>

Set forth below is a summary of options  outstanding and exercisable as of
February 27,1999.

                       (Outstanding)                        (Exercisable)
                                Weighted    Remaining                Weighted
      Range of                  Average      Contract                Average
  Exercise Prices   Options  Exercise Price   Life      Options   Exercise Price
--------------------------------------------------------------------------------

February 27, 1999
       $ 1.84       341,424     $1.84         4.59      261,074     $ 1.84
    4.00 - 4.88     792,991      4.36         6.81      269,762       4.36
    5.75 - 7.06      98,550      6.69         8.31          800       7.06

      The Company  accounts  for its  stock-based  compensation  plans under APB
      Opinion No. 25, Accounting for Stock Issued to Employees.  The Company has
      adopted the disclosure-only alternative under SFAS No. 123, which requires
      disclosure  of the pro forma effects on earnings and earnings per share as
      if SFAS No. 123 had been adopted,  as well as certain  other  information.
      The Company has computed the pro forma disclosures required under SFAS No.
      123 for all stock  options  granted  as of  February  27,  1999,  February
      28,1998 and March  1,1997 using the  Black-Scholes  option  pricing  model
      prescribed by SFAS No. 123.

      The assumptions used and the weighted  average  information for the fiscal
      years ended February 27, 1999, February 28, 1998, and March 1, 1997 are as
      follows:
<TABLE>
<CAPTION>

                                                                             Fiscal Years Ended
                                                             February 27,         February 28,         March 1,
                                                                 1999                1998                1997

 <S>                                                          <C>                <C>                   <C>
 Risk-free interest rate                                     6.25% - 6.55%      6.25% - 6.55%        5.65% - 6.70%
 Expected dividend yield                                           -                  -                    -
 Expected lives                                              5 - 7.5 years         5  - 7.5 years    7.5 years
 Expected volatility                                              85%                 85%                 85%
 Weighted average grant-date fair value of options
      granted during the period                                $ 3.09               $ 4.74              $ 2.32
 Weighted average exercise price of options outstanding        $ 3.87               $ 3.88              $ 3.46
 Weighted average remaining contractual life of options
      outstanding                                             6.32 years            6.81 years        7.41 years
 Weighted average exercise price of 531,636, 399,380,
      and 313,388 options exerciseable at February 27, 1999,
      February 28, 1998, and March 1, 1997, respectively        $ 3.13              $ 3.07              $ 2.98

 The effect of applying SFAS No. 123 would be as follows:
                                                                             Fiscal Years Ended
                                                             February 27,         February 28,         March 1,
                                                                 1999                1998                1997
Pro forma net income (loss)                                    ($7,729)             $4,011              $2,294
Pro forma basic net income (loss) per share                     ($0.73)              $0.38              $0.21
Pro forma diluted net income (loss) per share                   ($0.73)              $0.36              $0.20
</TABLE>

      Because  the method  prescribed  by SFAS No.  123 has not been  applied to
      options  granted  prior to February  28,  1995,  the  resulting  pro forma
      compensation  cost may not be representative of that to be expected in the
      future years.

      (e) 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 February 28,
      1998, the Company had purchased 500,000 shares of Class A common stock for
      approximately $2.5 million, of which 135,000 shares were purchased at fair
      market  value in 1997 from a member of the Board of Directors at a cost of
      approximately $0.7 million.

      (f) 1997 Employee Stock Purchase Plan

      In October  1997,  the  Company's  Board of  Directors  approved  the 1997
      Employee Stock Purchase Plan (the Purchase Plan) whereby,  the Company has
      reserved and may issue up to an aggregate of 250,000 shares of its Class A
      common stock for issuance in accordance with the Purchase Plan.  Under the
      terms  of the  Purchase  Plan,  employees  who  meet  certain  eligibility
      requirements  may  purchase  shares of the  Company's  common stock at the
      closing  price of the common stock on the day  immediately  preceding  the
      purchase date or the nearest prior business day on which trading occurred.
      There were 13,345 shares  purchased  under the Purchase Plan during fiscal
      year 1998.

(7)   ACCOUNTS RECEIVABLE

      Accounts receivable consist of the following (in thousands):

                                         February 27, 1999     February 28, 1998

      Vendor receivables                     $ 16,499               $ 11,806
      Credit card receivables                   2,422                  2,673
      Other                                     2,104                  2,756
      Trade receivables                         1,458                  1,529
      Allowance for doubtful accounts            (213)                  (218)
                                             ---------              ---------

                                             $ 22,270               $ 18,546
                                             =========              =========

(8)   PREPAID EXPENSES AND OTHER CURRENT ASSETS

      Prepaid  expenses and other  current  assets  consist of the following (in
      thousands):


                                         February 27, 1999     February 28, 1998

      Other                                  $  4,348               $ 4,371
      Refundable Income Tax                     3,400                     -
      Prepaid catalog                           1,670                 2,535
      Prepaid rent                                 90                 1,297
                                             --------               -------
                                             $  9,508               $ 8,203
                                             ========               =======

(9)   PROPERTY AND EQUIPMENT

      Property and equipment consist of the following (in thousands):

                                         February 27, 1999    February 28, 1998

      Land                                       $ 186               $ 186
      Building                                     672                 672
      Furniture and fixtures                    12,702               9,369
      Equipment                                  9,734               7,747
      Equipment under capital leas               4,167               3,569
      Leasehold improvements                     6,740               6,245
                                                ------              ------
                                                34,201              27,788
      Less - Accumulated depreciation
             and amortization                   12,788               8,401
                                                ------              ------

                                               $21,413              $19,387
                                               =======              =======

      At February 27, 1999 and February 28, 1998, the  accumulated  depreciation
      associated  with  equipment  under  capital lease was  approximately  $2.1
      million and $1.5 million, respectively.

(10)  TRANSACTIONS WITH RELATED PARTIES AND STOCKHOLDERS

      The  Company  has a lease  arrangement  with Mystic  United  Realty  Trust
      (Mystic), for warehouse space at its Chelsea, Massachusetts, facility (the
      Chelsea  facility)  under a  non-cancelable  lease through 2005. The chief
      executive  officer/principal  stockholder  of the Company is a trustee and
      beneficiary of Mystic. Under the lease, the Company must pay to Mystic, in
      the form of additional rent, all insurance, real estate taxes, maintenance
      and operating cost related to the leased premises,  which approximate $0.4
      million annually (see Note 11 ).

(11)  COMMITMENTS AND CONTINGENCIES

      (a) Capital Leases

      The Company  leases  computers  and other  equipment  under  several lease
      agreements  that  qualify  for  capitalized  treatment  under SFAS No. 13,
      Accounting for Leases. These agreements require monthly payments including
      interest  at rates  ranging  from 5.11% to  10.84%,  and expire at various
      dates through January, 2002.

      Future minimum lease payments under capital lease  obligations at February
      27, 1999 are as follows (in thousands):

      Fiscal Year                                                Amount
         1999                                                 $    1,122
         2000                                                        541
         2001                                                        211
                                                              ----------
              Total minimum lease payments                         1,874

      Less Amounts representing interest                             175
                                                              ----------

           Obligations under capital leases                        1,699

      Less Current portion of capital lease obligations            1,028
                                                              ----------

                                                              $      671
                                                              ==========

      (b) Operating Leases

      The Company leases retail stores,  warehouse and office space, and certain
      machinery and equipment under lease agreements expiring through June 2005,
      including related party lease agreements (see Note 10). Approximate future
      minimum lease payments under operating  leases as of February 27, 1999 are
      as follows:

              Fiscal Year                         Total
                                              (in thousands)
                 1999                            $ 15,332
                 2000                              13,208
                 2001                              11,553
                 2002                               8,854
                 2003                               4,729
                 Thereafter                         8,902
                                                    -----
                                                 $ 62,578
                                                 ========

      Rent and related expenses  charged to operations  during each of the years
      ended  February  27,  1999,  February  28,  1998,  and  March 1, 1997 were
      approximately  $18.0,  $12.5,  and  $10.3,  million,   respectively.

      (c) Litigation

      In the ordinary course of business,  the Company is party to various types
      of litigation.  The Company  believes it has  meritorious  defenses to all
      claims,  and,  in  its  opinion,   all  litigation  currently  pending  or
      threatened  will not have a  material  effect on the  Company's  financial
      position or results of operations.

(12)  PROFIT SHARING PLAN

      The Company  maintains a profit  sharing plan (the Plan) that provides for
      tax  deferred  employee  benefits  under  Section  401(k) of the  Internal
      Revenue Code. The Plan allows employees to make  contributions,  a portion
      of which  will be  matched  by the  Company,  up to the lesser of 3% of an
      employee's  salary or the minimum amount  allowed by law, as defined.  The
      Company may elect to make an additional discretionary  contribution in any
      Plan year. There were no discretionary  Company  contributions made during
      the fiscal years ended February 27, 1999,  February 28, 1998, and March 1,
      1997.  The  Company's  contributions  vest  at a  rate  of 20%  per  year,
      beginning  after one year of  employment.  The Company  has made  matching
      contributions  of  approximately  $0.2 million to the plan for each of the
      fiscal  years ended  February 27,  1999,  February 28, 1998,  and March 1,
      1997. The Company pays the administrative costs of the Plan.

(13)  SIGNIFICANT VENDOR

      Purchases from the Company's  largest single supplier were 10.8%, 9.0% and
      10.4% of total  purchases for the years ended February 27, 1999,  February
      28, 1998, and March 1, 1997, respectively.

(14)  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 the rent and related
      expenses for closing 12 retail store  locations and for the  consolidation
      of the  Company's  distribution  centers,  as  well as the  severance  and
      related benefits for terminated retail employees. The Company recorded the
      restructuring charge as follows (in thousands):

      Closing of retail  stores and related  cost of  severance
        and benefits of terminated employees                            $   954

      Expenses associated with consolidation of distribution centers        443
                                                                            ---
                                                                        $ 1,397
                                                                        =======

      In fiscal 1996 and 1997, $1.1 million and $.3 million,  respectively,  was
      charged against the reserve.  At February 28, 1998 the  restructuring  was
      complete.

(15)  SELECTED INFORMATION BY BUSINESS SEGMENTS

      The  Company  reports  segment  information  according  to SFAS  No.  131,
      Disclosures about Segments of an Enterprise and Related Information.  SFAS
      131 requires  disclosures  about  operating  segments in annual  financial
      statements and requires selected  information about operating  segments in
      interim financial statements. Operating segments are defined as components
      of an enterprise about which separate  financial  information is available
      that is evaluated  regularly by the chief  operating  decision  maker,  or
      decision  makers,  in deciding how to allocate  resources and in assessing
      performance.  The Company's  chief  operating  decision maker is the chief
      executive officer.

      The Company sells its products  through its  Woodworkers  Warehouse,  Post
      Tool and Golf Day retail stores and its Trend-lines and Golf Day catalogs.
      These  businesses have been aggregated  into their  respective  reportable
      segments  based on the  management  reporting  structure.  The  accounting
      policies of the business  segments are the same as those  described in the
      summary of significant accounting policies.

Information as to the operations of the different business segments is set forth
below for each of the years ended February 27, 1999, February 28, 1998 and March
1, 1997 (in thousands):
<TABLE>
<CAPTION>

                                                      Fiscal Years Ended
                                   February 27, 1999   February 28, 1998      March 1, 1997

<S>                                       <C>                <C>                <C>
Net sales
      Retail
            Tools                         $148,444            $133,000          $115,184
            Golf                            68,587              38,612            25,158
      Catalog
            Tools                           27,945              34,451            43,283
            Golf                            17,574              25,080            24,957
                                            -------           ---------         ---------
                                          $262,550            $231,143          $208,582
                                          =========           =========         =========
Income (loss) from operations
      Retail
            Tools                           $5,518              $9,094            $7,528
            Golf                              (267)              2,260                63
      Catalog
            Tools                            2,462               5,655             4,724
            Golf                               496               4,050             3,402
      General corporate expenses           (13,629)            (10,527)           (8,051)
                                           ========            ========         =========
                                           ($5,420)            $10,532            $7,666
                                           ========            ========         =========
Identifiable assets
      Retail
            Tools                          $98,560             $86,495           $76,044
            Golf                            62,209              38,369            16,531
      Catalog
            Tools                           12,431              13,556            14,159
            Golf                             8,062               9,372             8,849
      General corporate assets              11,676               7,660             5,471
                                            ======               ======         =========
                                          $192,938            $155,452          $121,054
                                          =========           =========         =========
Depreciation and amortization
      Retail
            Tools                           $2,345              $1,543            $1,199
            Golf                             1,854                 853               328
      Catalog
            Tools                              170                 155               194
            Golf                               107                 113               111
      General corporate expenses               262                 172                -
                                            =======           =========         =========
                                            $4,738             $2,836             $1,832
                                            =======           =========         =========
Capital expenditures
      Retail
            Tools                           $2,564              $3,065            $1,859
            Golf                             2,749               2,601             1,049
      Catalog
            Tools                              161                 536               375
            Golf                               101                 390               217
      General corporate expenditures           255                 596                -
                                            =======           =========         =========
                                            $5,830              $7,188            $3,500
                                            =======           =========         =========
</TABLE>

      The  Company  operates  from  a  single  distribution  center  in  Revere,
      Massachusetts,  for its Woodworkers  Warehouse and Golf Day operations and
      utilizes common labor pools,  common management at the corporate level and
      a single  telemarketing  sales force.  Post Tool,  Inc. has a distribution
      center facility in Hayward,  California. As a result, many of the expenses
      of the Company are shared between the business  segments.  The disclosures
      in the above table were determined after  allocating  shared resources and
      expenses.

(16)  QUARTERLY RESULTS OF OPERATIONS (Unaudited)

      The following  summarized  unaudited results of operations for fiscal year
      1998 and 1997 have been accounted for using generally accepted  accounting
      principles  for  interim  reporting   purposes  and  include   adjustments
      (consisting of normal recurring  adjustments) that the Company  considered
      necessary  for the fair  presentation  of results for the interim  periods
      shown below. (In thousands, except per share amounts):
<TABLE>
<CAPTION>

                                            First         Second       Third       Fourth
                                           Quarter        Quarter     Quarter     Quarter

<S>                                          <C>           <C>          <C>         <C>
 Fiscal Year 1998
      Net sales                              $59,639       $64,897      $60,102     $77,912
      Gross Profit                            17,581        20,007       18,367      25,018
      Net (loss) income                       (4,603)       (3,659)          59         793
      Basic net (loss) income per share       ($0.43)       ($0.34)       $0.01       $0.07
      Diluted net (loss) income per share     ($0.43)       ($0.34)       $0.01       $0.07
      Basic weighted average common
            shares outstanding                10,642        10,650       10,651      10,651
      Diluted weighted average common
            shares outstanding                10,642        10,650       10,723      10,781

 Fiscal Year 1997
      Net sales                              $57,089       $50,819      $52,357     $70,878
      Gross Profit                            18,932        16,413       16,216      22,453
      Net income                                 413           423          855       2,757
      Basic net income per share               $0.04         $0.04        $0.08       $0.26
      Diluted net income per share             $0.04         $0.04        $0.08       $0.24
      Basic weighted average common
            shares outstanding                10,586        10,568       10,589      10,609
      Diluted weighted average common
            shares outstanding                11,038        11,120       11,175      11,130
</TABLE>

<TABLE>
<CAPTION>

SCHEDULE II
                        VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)

                                      Balance,     Charged to                  Balance,
                                     Beginning     Costs and                     End
                                     Of Period     Expenses      Deductions   Of Period

<S>                                  <C>          <C>           <C>            <C>
ALLOWANCE FOR DOUBRFUL ACCOUNTS
     March 1, 1997                   $    93      $    92       $     -        $    185
                                     ========     ========      ========       ========

     February 28, 1998               $    185     $    89       $    56        $    218
                                     =========    ========      ========       ========

     February 27, 1999               $    218     $     -       $     5        $    213
                                     =========    ========      ========       ========
</TABLE>