SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

    (Mark One)

     |X|  Quarterly  report  pursuant to Section 13 or 15 (d) of the  Securities
          Exchange Act of 1934,

     For the quarterly period ended January 30, 2000 or

     |_|  Transition  report  pursuant to Section 13 or 15(d) of the  Securities
          Exchange Act of 1934

       Commission file number 0-15995

                                 MICROAGE, INC.
             (Exact name of registrant as specified in its charter)

          Delaware                                           86-0321346
   (State of incorporation)                              (I. R. S. Employer
                                                         Identification No.)
    2400 South MicroAge Way

          Tempe, AZ                                         85282-1896
(Address of principal executive offices)                    (Zip Code)

Registrant's telephone number, including area code: (480) 366-2000

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 and
(2) has been subject to such filing requirements for the past 90 days.

                                Yes |_| x No |_|

The number of shares of the registrant's Common Stock (par value $.01 per share)
outstanding at March 20, 2000 was 21,727,813.

<PAGE>

                                      INDEX

                                 MICROAGE, INC.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

          Consolidated balance sheets -- January 30, 2000 and October 31, 1999.

          Consolidated  statements of  operations -- Quarters  ended January 30,
          2000 and January 31, 1999.

          Consolidated  statements  of cash flows -- Quarters  ended January 30,
          2000 and January 31, 1999.

          Notes to consolidated financial statements.

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations.

PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

SIGNATURES

                                        1

<PAGE>

 PART I. FINANCIAL INFORMATION

 Item 1.  Financial Statements (Unaudited)

                                 MICROAGE, INC.
                     CONSOLIDATED BALANCE SHEETS (UNAUDITED)
                        (in thousands, except share data)

                                     Assets

<TABLE>
<CAPTION>

                                                                               January 30,            October 31,
                                                                                  2000                   1999
                                                                             ---------------        ---------------
<S>                                                                                <C>                    <C>
 Current assets:
      Cash and cash equivalents                                                    $ 31,818               $ 67,656
      Accounts and notes receivable, net of
         allowance of $37,929 and $29,680 respectively                              394,214                220,386
      Inventory                                                                     245,240                336,653
      Other                                                                          24,826                 27,150
                                                                             ---------------        ---------------
          Total current assets                                                      696,098                651,845

 Property and equipment, net                                                         95,589                102,175
 Intangible assets, net                                                              12,359                 12,693
 Other                                                                               24,848                 19,930
                                                                             ---------------        ---------------
          Total assets                                                           $  828,894              $ 786,643
                                                                             ===============        ===============

                                        Liabilities and Stockholders' Equity

 Current liabilities:
      Accounts payable                                                            $ 598,066              $ 549,394
      Accrued liabilities                                                            34,927                 33,065
      Current portion of long-term obligations                                        2,768                  2,497
      Other                                                                           5,962                  7,558
                                                                             ---------------        ---------------
          Total current liabilities                                                 641,723                592,514

 Line of credit                                                                      87,089                 45,000
 Long-term obligations                                                                3,233                  4,080
 Other long-term liabilities                                                         12,229                 12,155

 Stockholders' equity:
      Preferred stock, par value $1.00 per share;
          Shares authorized:  5,000,000
          Issued and outstanding:  none                                                   -                      -
      Common stock, par value $.01 per share;
          Shares authorized:  40,000,000
          Issued:   January 30, 2000      -     21,030,245
                    October 31, 1999      -     20,838,211                              210                    208
      Additional paid-in capital                                                    220,611                220,522
      Retained deficit                                                             (136,194)               (87,829)
      Treasury stock, at cost;
          Shares:   January 30, 2000      -            412
                    October 31, 1999      -            412                               (7)                    (7)
                                                                             ---------------        ---------------
          Total stockholders' equity                                                 84,620                132,894
                                                                             ---------------        ---------------
          Total liabilities and stockholders' equity                             $  828,894              $ 786,643
                                                                             ===============        ===============
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                        2

<PAGE>

                                 MICROAGE, INC.
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                      (in thousands, except per share data)

<TABLE>
<CAPTION>

                                                                                                 Quarter ended

                                                                                       ----------------------------------
                                                                                        January 30,         January 31,
                                                                                            2000                1999
                                                                                       --------------      --------------
<S>                                                                                      <C>                  <C>
     Revenue                                                                             $ 1,112,881          $1,444,841

     Cost of sales                                                                         1,063,315           1,343,071
                                                                                       --------------      --------------

     Gross profit                                                                             49,566             101,770

     Operating and other expenses
      Operating expenses                                                                      73,814              89,287
      Restructuring and other one-time charges                                                10,113                   -
                                                                                       --------------      --------------

        Total                                                                                 83,927              89,287
                                                                                       --------------      --------------

     Operating income (loss)                                                                 (34,361)             12,483

     Other expenses - net                                                                     13,985               7,248
                                                                                       --------------      --------------

     Income (loss) before income taxes                                                       (48,346)              5,235

     Income tax provision (benefit)                                                                -               3,169
                                                                                       --------------      --------------

     Net income (loss)                                                                     $ (48,346)            $ 2,066
                                                                                       ==============      ==============

     Net income (loss) per common and common equivalent share:

           Basic                                                                             $ (2.31)             $ 0.10
                                                                                       ==============      ==============

           Diluted                                                                           $ (2.31)             $ 0.10
                                                                                       ==============      ==============

     Weighted average common and common equivalent shares outstanding:

           Basic                                                                              20,907              20,344
                                                                                       ==============      ==============

           Diluted                                                                            20,907              21,034
                                                                                       ==============      ==============
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                        3

<PAGE>

                                 MICROAGE, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                Increase (Decrease) in Cash and Cash Equivalents
                                 (in thousands)

<TABLE>
<CAPTION>

                                                                                               Quarter ended

                                                                                      ---------------------------------
                                                                                       January 30,        January 31,
                                                                                          2000               1999
                                                                                      --------------     --------------
<S>                                                                                       <C>                  <C>
    Cash flows from operating activities:
      Net income (loss)                                                                   $ (30,253)           $ 2,067
      Adjustments to reconcile net income (loss) to
         net cash provided by (used in) operating activities:
           Depreciation and amortization                                                     11,242             11,396
           Provision for losses on accounts and notes receivable                              2,766              3,028
           Restructuring and other one-time charges                                           3,675                  -
           Changes in assets and liabilities, net of business acquisitions:
              Accounts and notes receivable                                                (194,687)           230,554
              Inventory                                                                      91,413            (19,128)
              Other current assets                                                            2,324                947
              Other assets                                                                   (5,518)           (12,769)
              Accounts payable                                                                1,297           (242,818)
              Accrued liabilities                                                             1,862              1,598
              Other liabilities                                                              (1,539)               883
                                                                                      --------------     --------------
         Net cash used in operating activities                                             (117,418)           (24,243)

    Cash flows from investing activities:

      Purchases of property and equipment                                                    (3,297)           (18,134)
                                                                                      --------------     --------------
         Net cash used in investing activities                                               (3,297)           (18,134)

    Cash flows from financing activities:

      Net activity in overdraft facility                                                     43,698             42,989
      Proceeds from issuance of stock-stock option
        and employee stock purchase plans                                                         -                577
      Net borrowings under line of credit                                                    42,089                  -
      Principal payments on debt                                                               (910)            (1,246)
                                                                                      --------------     --------------

         Net cash provided by (used in) financing activities                                 84,877               (669)
                                                                                      --------------     --------------
    Net decrease in cash and cash equivalents                                               (35,838)               (57)

    Cash and cash equivalents at beginning of period                                         67,656             41,894
                                                                                      --------------     --------------
    Cash and cash equivalents at end of period                                             $ 31,818           $ 41,837
                                                                                      ==============     ==============
</TABLE>

The accompanying notes are an integral part of these financial statements.

                                        4

<PAGE>
                                 MICROAGE, INC.

             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE A - BASIS OF PRESENTATION

The accompanying unaudited  consolidated financial statements of MicroAge,  Inc.
(the "Company") do not include all of the information and footnotes  required by
generally accepted accounting principles for complete financial  statements.  In
the opinion of  management,  all  adjustments  (consisting  of normal  recurring
accruals)  considered  necessary for a fair statement of results for the periods
have been included. Certain prior year amounts have been reclassified to conform
with current year financial statement presentation. Operating results for the 13
weeks ended January 30, 2000 are not necessarily  indicative of the results that
may be expected for the year ending October 29, 2000.  For further  information,
refer to the consolidated financial statements and footnotes thereto included in
the Company's Annual Report on Form 10-K for the year ended October 31, 1999.

Basic earnings per share is computed using the weighted average number of common
shares  outstanding  during the period.  Diluted  earnings per share is computed
using the  weighted  average  number of common and  dilutive  common  equivalent
shares  outstanding.  Dilutive common equivalent shares consist of stock options
and warrants  using the treasury  stock method.  The effect of stock options and
warrants is not included at January 30, 2000 as it would be  anti-dilutive.  The
weighted average common and common equivalent shares consist of the following:

<TABLE>
<CAPTION>
                                                                    Fiscal years ended
                                                           --------------- -- ---------------
                                                            January 30,        January 31,
                                                                2000               1999
                                                           ---------------    ---------------
                                                           (in thousands)
<S>                                                                <C>               <C>
   Weighted average common shares                                  20,907            20,344
   Dilutive effect of stock options and warrants                        -               690
                                                           ---------------     --------------

   Weighted average common and common
     equivalent shares outstanding                                 20,907            21,034
                                                          ===============    ==============
</TABLE>

NOTE B - OTHER EXPENSES - NET

Other expenses - net consists of the following (in thousands):

                                                         Quarters ended
                                                 -----------------------------
                                                  January 30,    January 31,
                                                     2000            1999
                                                 --------------  -------------

       Interest income                                 ($ 209)        ($ 884)
       Interest expense                                 1,172            823
       Credit facility interest expense                 6,462             -
       Expenses from sale of
         accounts receivable                                -          2,683
       Amortization expense                               933          2,367
       Flooring expense (1)                             5,105          2,379


                                       5
<PAGE>

       Other                                              522           (120)
                                                 --------------  -------------
                                                     $ 13,985         $7,248
                                                 ==============  =============

         1) Flooring expense  represents  amounts paid to finance companies that
         provide credit lines to certain reseller customers of the Company.

NOTE C - RECENT DEVELOPMENTS

The Company  experienced a greater than  anticipated  slowdown in revenue in its
first fiscal quarter due to lack of customer  demand  primarily  related to Year
2000 concerns and to increased  competitive pressures during the Company's major
distribution  competitors' year ends. Due to the lower revenue levels, it became
apparent that the Company would not meet the covenants in its primary  financing
facilities (the  "Facilities")  for the first fiscal quarter.  As a result,  the
Company  negotiated  modifications  to the  Facilities.  In order  to grant  the
modifications,  one of the Company's  lenders  changed the terms under which the
Company  borrows,  effectively  reducing the Company's  capacity to borrow under
that agreement.  At the time of the  modifications,  the Company  estimated that
operating results would be sufficient to comply with the modified covenants.

During the second  fiscal  quarter,  the  Company has sought to improve its cash
flows by aggressively  reducing inventory and accounts receivable.  However, the
Company  has not  attained  forecasted  sales  levels  during the second  fiscal
quarter,  primarily  because of the  Company's  inability  to obtain  sufficient
product supply from its vendors. Many vendors have limited the Company's ability
to purchase  product  from them.  This has resulted in lower  collateral  levels
under the Facilities, which further reduces the Company's borrowing capacity. As
a result of these  developments,  the Company anticipates that it will be unable
to comply with the current financial  covenants in the Facilities for the second
fiscal  quarter.  The  Company is engaged in  discussions  with its  lenders and
vendors in order to improve its  liquidity  position and to increase the flow of
product from the vendors.  The Company has also requested  modifications  to the
Inventory Facility. Although the Company believes that the best interests of its
lenders,  vendors,  and the Company would be served through a modified Inventory
Facility and increased product flow from its vendors,  there can be no assurance
that the lenders or vendors will ultimately agree,  that the Inventory  Facility
will be modified,  or that  product flow will  increase.  In the  meantime,  the
Company continues to take steps to conserve and manage cash flow.

NOTE D - RESTRUCTURING AND OTHER ONE-TIME CHARGES

In response to lower revenue levels and gross margins, the Company has continued
during the first quarter and the beginning of the second quarter to take actions
to increase gross margins and decrease operating expenses. These actions include
price increases, the elimination of several hundred positions at Pinacor and MTS
and the closure of branch locations.

In  connection  with these  developments,  during the quarter  ended January 30,
2000,  the Company  recorded  $10 million of  restructuring  and other  one-time
charges ($6 million, or 29 cents per share, after taxes). All actions related to
this  restructuring  were implemented as of January 30, 2000. The  restructuring
and other one-time charges included $1 million in employee  termination benefits
(primarily  severance  pay) and $9  million  for  facility  closure  costs.  The
facility  closure  costs  include  lease  expense on closed  facilities,  net of
anticipated  sub-lease income, and losses on disposals of fixed assets at closed
facilities.


                                       6
<PAGE>

The charges associated with employee  termination  benefits consist primarily of
severance pay for approximately 190 associates. The reductions were completed by
January 30, 2000 and occurred in both Pinacor and in MTS.

Included in accounts payable in the accompanying  balance sheet is an accrual of
$6 million for  restructuring  and other  one-time  charges from prior  quarters
which have not yet been paid. The accrual primarily relates to lease expense for
remaining terms on previously closed  facilities,  net of anticipated  sub-lease
income.

As the Company continues to reduce its cost structure,  additional restructuring
charges will be recognized in future quarters for severance and facility closure
costs.

NOTE E - FINANCING ARRANGEMENTS

On October 28, 1999, the Company entered into two new financing  facilities (the
"Facilities").  The Facilities, as amended, provide for borrowings of up to $520
million  and include a $300  million  revolving  credit  facility  (the  "Credit
Facility")  and a $220 million  inventory  financing  facility  (the  "Inventory
Facility");  the Company also has an additional $20 inventory financing facility
with another lender.  The Credit Facility  includes a $145 million  sublimit for
the issuance of letters of credit.

Borrowings  under  the  Facilities  are  secured  by  substantially  all  of the
Company's  assets,  subject to other liens permitted  under the Facilities.  The
Facilities contain certain restrictive covenants,  including capital expenditure
limitations,  a minimum  interest  coverage  ratio,  a minimum  earnings  before
interest,  taxes,  depreciation and  amortization  (EBITDA) amount and a minimum
debt to EBITDA ratio.

Borrowings  under the  Facilities  are limited based on borrowing  base formulas
that consider eligible inventories,  eligible accounts receivable and letters of
credit. Borrowings are also subject to the satisfaction of customary conditions,
including the absence of any material  adverse change in the Company's  business
or financial condition.

Interest rates on the Credit  Facility are based on the agent's base rate plus a
specified margin or LIBOR plus a specified margin.  The current margins are 2.5%
for base rate advances and 3.5% for LIBOR advances.  The margins may be adjusted
from time to time based on the  Company's  performance  against  covenants.  The
Credit  Facility also includes letter of credit and unused line fees. The Credit
Facility has a termination date of October 31, 2002.

Payments for products purchased under the Inventory Facility vary depending upon
the  product  supplier,  but  generally  are due 30 days  from  the  date of the
advance. No interest or finance charges are payable on the Inventory Facility if
payments  are made when due.  The Company has the  ability  under the  Inventory
Facility to extend payments 30 days beyond the initial due date with a financing
fee of  LIBOR  plus  3.75%.  This  ability  is  limited  by  minimum  collateral
restrictions. The Inventory Facility has a termination date of October 18, 2002.

During the first quarter of fiscal year 2000 it became apparent that the Company
would not meet its minimum  EBITDA and maximum debt to EBITDA  covenants for the
quarter ending January 30, 2000 and for each of the remaining  periods in fiscal
2000. As a result, the Company renegotiated these covenants,  as well as related
financial ratio covenants. See NOTE C - RECENT DEVELOPMENTS above for additional
information about the Company's status with its lenders.


                                       7
<PAGE>

NOTE F - SEGMENT REPORTING

The  Company  operates  primarily  in  two  industry  segments:   the  wholesale
distribution of computer equipment through Pinacor and technology infrastructure
services through MTS. The Company operates  primarily in the United States,  and
therefore has only one reportable geographic segment.

The  following  table  presents  certain  segment   financial   information  (in
thousands):

<TABLE>
<CAPTION>
                                                                       Quarter ended January 30, 2000
                                                    ---------------------------------------------------------------------
                                                        Pinacor             MTS              Other            Total
                                                    ----------------  ---------------   ---------------  ----------------
<S>                                                       <C>              <C>               <C>             <C>
 Net revenue from external customers                      $ 748,606        $ 354,046         $  10,229       $ 1,112,881
 Intersegment revenue                                       124,302                -             3,321           127,623
                                                    ----------------  ---------------   ---------------  ----------------
 Total revenue                                            $ 872,908        $ 354,046         $  13,550       $ 1,240,504
 Loss before taxes (1)                                    $ (25,958)       $ (17,832)        $   (245)       $   (44,035)

<CAPTION>
                                                                       Quarter ended January 31, 1999
                                                    ---------------------------------------------------------------------
                                                        Pinacor             MTS              Other            Total
                                                    ----------------  ---------------   ---------------  ----------------
<S>                                                     <C>                <C>                <C>            <C>
 Net revenue from external customers                    $   987,323        $ 447,626          $  9,892       $ 1,444,841
 Intersegment revenue                                       317,096                -                 -           317,096
                                                    ----------------  ---------------   ---------------  ----------------
 Total revenue                                          $ 1,304,419        $ 447,626          $  9,892       $ 1,761,937
 Income (loss) before taxes                             $    16,908        $  (6,470)         $    550       $    10,988

</TABLE>

<TABLE>
<CAPTION>
Reconciliation                                                                Fiscal years ended
                                                                      ---------------------------------
                                                                        January 30,       January 31,
                                                                           2000              1999
                                                                      ---------------   ---------------
<S>                                                                      <C>               <C>
 Revenue
      Total revenue for segments                                         $ 1,240,504       $ 1,761,937
      Elimination of intersegment revenue                                   (127,623)         (317,096)
                                                                      ===============   ===============
          Total consolidated revenue                                     $ 1,112,881       $ 1,444,841
                                                                      ===============   ===============

 Income (loss) before taxes
      Total from segments                                                $  (44,035)       $    10,988
      Unallocated amounts                                                    (4,311)            (5,753)
                                                                      ===============   ===============
          Total consolidated income (loss) before taxes                  $  (48,346)       $     5.235
                                                                      ===============   ===============
</TABLE>

(1) Includes an allocated  portion of  restructuring  and other one-time charges
for the fiscal quarter ended January 30, 2000.


                                       8
<PAGE>

Item 2.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations.

     Certain  statements   contained  in  this  Item  may  be   "forward-looking
statements" within the meaning of The Private  Securities  Litigation Reform Act
of 1995. These forward-looking statements may include projections of revenue and
net income and issues  that may affect  revenue or net  income;  projections  of
capital  expenditures;  plans for future  operations;  financing needs or plans;
plans relating to the Company's products and services;  and assumptions relating
to the foregoing. Forward-looking statements are inherently subject to risks and
uncertainties,  some of which cannot be predicted or  quantified.  Future events
and actual results could differ materially from those set forth in, contemplated
by, or underlying the forward-looking information. Some of the important factors
that could cause the Company's  actual results to differ  materially  from those
projected in forward-looking statements made by the Company include, but are not
limited to, the following:  intense  competition;  narrow  margins;  the capital
intensive nature of the Company's business;  the availability of working capital
financing;  dependence on supplier incentive funds;  potential changes in vendor
terms and  conditions;  product supply and dependence on key vendors;  potential
changes in customer demand;  potential  fluctuations in quarterly results; risks
of declines in inventory values;  dependence on information systems;  dependence
on independent  shipping  companies;  rapid  technological  change; and possible
volatility  of stock price.  The Company  undertakes  no  obligation to publicly
update or revise  any  forward-looking  statements,  whether  as a result of new
information, future events, or otherwise.

The Company operates primarily through two businesses - a distribution  business
operated through a wholly-owned  subsidiary,  Pinacor, Inc. ("Pinacor"),  and an
integration business, MicroAge Technology Services, L.L.C. ("MTS").

Recent Developments

Liquidity  Issues.  The Company's ability to continue to finance its business is
contingent  upon  improving  cash flows  through  reductions  in  inventory  and
accounts  receivable,  attaining  forecasted  sales levels,  reducing  operating
costs, and complying with financial covenants in its credit facilities.

The Company  experienced a greater than  anticipated  slowdown in revenue in its
first fiscal quarter due to lack of customer  demand  primarily  related to Year
2000 concerns and to increased  competitive pressures during the Company's major
distribution  competitors' year ends. Due to the lower revenue levels, it became
apparent that the Company would not meet the covenants in its primary  financing
facilities (the  "Facilities")  for the first fiscal quarter.  As a result,  the
Company  negotiated  modifications  to the  Facilities.  In order  to grant  the
modifications,  one of the Company's  lenders  changed the terms under which the
Company  borrows,  effectively  reducing the Company's  capacity to borrow under
that  agreement.  As  discussed  in greater  detail in  "Liquidity  and  Capital
Resources" below, the Facilities consist of a $300 million Credit Facility and a
$220 million Inventory Financing Facility. At the time of the modifications, the
Company  estimated that operating results would be sufficient to comply with the
modified covenants.

During the second  fiscal  quarter,  the  Company has sought to improve its cash
flows by aggressively  reducing inventory and accounts  receivable;  the Company
also expects to further  reduced  operating  expenses  during the second  fiscal
quarter.  However,  the Company has not attained  forecasted sales levels during
the second  fiscal  quarter,  primarily  because of the  Company's  inability to
obtain sufficient product supply from its vendors. Many vendors have limited the
Company's  ability to purchase  product  from them.  This has  resulted in lower
collateral  levels under the  Facilities,  which  further  reduces the Company's
borrowing capacity.  As a result of these developments,  the Company anticipates
that it will be unable to comply with the  current  financial  covenants  in the
Facilities for the second fiscal quarter.  The Company is engaged in discussions
with its lenders and vendors in order to improve its  liquidity  position and to
increase the flow of product from the  vendors.  The Company has also  requested
modifications to the Inventory Facility.  Although the Company believes that the
best interests of its lenders,  vendors, and the Company would be served through
a modified Inventory Facility and increased product flow from its vendors, there
can be no assurance that the lenders or vendors will ultimately  agree, that the
Inventory Facility will be modified,  or that product flow will increase. In the
meantime, the Company continues to take steps to conserve and manage cash flow.


                                       9
<PAGE>

Responses to Current Issues

In response to lower revenue levels and gross margins, the Company has continued
during the first quarter and the beginning of the second quarter to take actions
to increase gross margins and decrease operating expenses. These actions include
price  increases,  the elimination of several  hundred  positions at Pinacor and
MTS, and the closure of branch locations.

In  connection  with these  developments,  during the quarter  ended January 30,
2000,  the Company  recorded  $10 million of  restructuring  and other  one-time
charges ($6 million, or 29 cents per share, after taxes). All actions related to
this  restructuring  were implemented as of January 30, 2000. The  restructuring
and other one-time charges included $1 million in employee  termination benefits
(primarily  severance  pay) and $9  million  for  facility  closure  costs.  The
facility  closure  costs  include  lease  expense on closed  facilities,  net of
anticipated  sub-lease income, and losses on disposals of fixed assets at closed
facilities.

The charges associated with employee  termination  benefits consist primarily of
severance pay for approximately 190 associates. The reductions were completed by
January 30, 2000 and occurred in both Pinacor and in MTS.

Included in accounts payable in the accompanying  balance sheet is an accrual of
$6 million for  restructuring  and other  one-time  charges from prior  quarters
which have not yet been paid. The accrual primarily relates to lease expense for
remaining terms on previously closed  facilities,  net of anticipated  sub-lease
income.

As the Company continues to reduce its cost structure,  additional restructuring
charges will be recognized in future quarters for severance and facility closure
costs.

Results of Operations

                               Jan. 30,  Oct. 31,  Aug. 1,  May 2,  Jan. 31,
                                 2000      1999     1999     1999     1999
                               --------  --------  -------  ------  --------

Revenue (in thousands)          100.0%    100.0%   100.0%   100.0%   100.0%
Cost of sales (1)                95.5      93.8     93.5     94.4     93.0
                                -----     -----    -----    -----    -----
Gross profit (1)                  4.5       6.2      6.5      5.6      7.0
Operating and other expenses
  Operating expenses (1)          6.6       5.9      5.9      5.8      6.2
  Restructuring and other
    one-time charges (2)          0.9       2.8      0.3      9.2      0.0
                                -----     -----    -----    -----    -----
Operating income (loss)          (3.0)     (2.5)     0.3     (9.4)     0.9

Other expenses - net (1)          1.3       0.6      0.6      0.6      0.5
                                -----     -----    -----    -----    -----
Income (loss) before income tax  (4.3)     (3.1)    (0.3)   (10.0)     0.4

Income tax provision (benefit)     --      (0.4)    (0.1)    (1.1)     0.2
                                -----     -----    -----    -----    -----
Net income (loss)                (4.3)%    (2.7)%   (0.2)%   (8.9)%    0.1%
                                =====     =====    =====    =====    =====


Total Revenue. Total revenue of $1.1 billion decreased $332 million, or 23%, for
the quarter  ended January 30, 2000 as compared to the quarter ended January 31,
1999. This revenue decrease included a $430 million, or 33%, decrease in Pinacor
(distribution  business)  revenue and a $105  million,  or 22%,  decrease in MTS
(integration  business) revenue.  These decreases were partially offset by lower
eliminations of intercompany revenue.

The  decreases in revenue in the quarter  ended January 30, 2000 compared to the
quarter ended  January 31, 1999 are primarily due to reduced  demand due to Year
2000 concerns,  changes in Pinacor's sourcing  relationship with Compaq Computer
Corporation  (see "Changes in Supplier Terms and  Conditions"  below),  and to a
focus within MTS to reduce unprofitable  product revenue.  The Company's revenue
levels in the early part of its second  fiscal  quarter are lower than the first
fiscal quarter levels due to the issues described above in "Recent  Developments
- Liquidity Issues." Unless the product supply issues are resolved,  the Company
expects  total  revenue  for its  second  fiscal  quarter to be lower than first
quarter levels.


                                       10
<PAGE>

Gross Profit Percentage.  The Company's gross profit percentage was 4.5% for the
quarter ended January 30, 2000 and 7.0% for the quarter ended January 30, 1999.

The decrease in the  Company's  gross  profit  percentage  in the quarter  ended
January 30, 2000 as compared to the quarter  ended January 31, 1999 is primarily
due to lower  product  margins  in both  Pinacor  and MTS and to  lower  service
margins in MTS.  Gross margins on sales to reseller  customers  decreased due to
increased  competitive  pressures.  In addition,  changes in supplier  terms and
conditions impacted both Pinacor and MTS margins.  Supplier incentive funds were
lower  as a  percentage  of  total  revenue  and,  due to  reductions  in  price
protection and return privileges, product costs were higher in the first quarter
of fiscal 2000 compared to the first quarter of fiscal 1999. MTS service margins
were  impacted  by lower  than  anticipated  revenue,  which  resulted  in lower
utilization of service personnel.

Future  gross  profit  percentages  may be  affected  by market  pressures,  the
introduction  of new Company  initiatives,  changes in revenue  mix,  changes in
supplier  incentive  funds,  changes in  suppliers'  terms and  conditions,  the
Company's utilization of early payment discount opportunities,  supplier pricing
actions,   and  other  competitive  and  economic   pressures.   See  "Potential
Fluctuations  in Operating  Results" below for  information  regarding  industry
trends that may affect future gross profit percentages.

Operating Expenses. Operating expenses totaled $74 million for the quarter ended
January 30,  2000,  compared to $89  million for the quarter  ended  January 31,
1999.  The decrease in dollars is due to actions  taken by the Company to reduce
operating  expenses.  See "Recent  Developments - "Responses to Current  Issues"
above for a discussion of recent actions taken.

Other  Expenses - Net.  Other  expenses - net increased to $14.0 million for the
quarter  ended  January 30, 2000 from $7.2 million for the quarter ended January
31, 1999.  The increase in other  expenses was  primarily  due to an increase in
financing costs.

Financing  costs  increased due to increased  average  borrowings as a result of
changes in the Company's major suppliers'  policies.  During fiscal 1999 certain
major suppliers changed the terms of their credit arrangements with the Company.
These  changes  include a decrease  in the number of days the Company has to pay
for product  purchases and a decrease in the amount of reseller  purchases  from
the Company that the suppliers are willing to subsidize. These changes increased
the Company's working capital  requirements and financing costs. These increases
were  offset by a decrease in  amortization  expense  due to the  write-down  of
impaired goodwill during the second quarter of fiscal 1999.

Income Tax  Provision.  During the quarter ended  January 30, 2000,  the Company
recorded  a  valuation  allowance  of  approximately  $18  million to reduce the
Company's total net deferred tax assets to their estimated net realizable value.
Realization of the Company's remaining net deferred tax assets of $47 million is
dependent on generating  sufficient taxable income prior to their expiration and
utilization of available  carryback  provisions.  The net deferred tax assets at
January 30, 2000 are considered  realizable;  however,  they could be reduced in
the near term if  estimates of future  taxable  income  during the  carryforward
period are reduced.  As a result of the  valuation  allowance  booked during the
first  quarter of fiscal  2000,  the Company  recorded no net tax benefit on its
pre-tax loss for the quarter,  compared to a provision  equal to 60.5% of income
before tax for the quarter ended January 31, 1999.

Liquidity and Capital Resources

On October 28, 1999, the Company entered into two new financing  facilities (the
"Facilities").  The Facilities, as amended, provide for borrowings of up to $520
million  and include a $300  million  revolving  credit  facility  (the  "Credit
Facility")  and $220 million in inventory  financing  facility  (the  "Inventory
Facility");  the Company also has an additional $20 million inventory  financing
facility  with  another  lender.  The Credit  Facility  includes a $145  million
sublimit for the issuance of letters of credit.

Borrowings  under  the  Facilities  are  secured  by  substantially  all  of the
Company's  assets,  subject to other liens permitted  under the Facilities.  The
Facilities contain certain restrictive covenants,  including capital expenditure
limitations,  a minimum  interest  coverage  ratio,  a minimum  earnings  before
interest,  taxes,  depreciation and  amortization  (EBITDA) amount and a minimum
debt to EBITDA ratio.


                                       11
<PAGE>

Borrowings  under the  Facilities  are limited based on borrowing  base formulas
that consider eligible inventories,  eligible accounts receivable and letters of
credit. Borrowings are also subject to the satisfaction of customary conditions,
including the absence of any material  adverse change in the Company's  business
or financial condition.

Interest rates on the Credit  Facility are based on the agent's base rate plus a
specified margin or LIBOR plus a specified margin.  The current margins are 2.5%
for base rate advances and 3.5% for LIBOR advances.  The margins may be adjusted
from time to time based on the  Company's  performance  against  covenants.  The
Credit  Facility also includes letter of credit and unused line fees. The Credit
Facility has a termination date of October 31, 2002.

Payments for products purchased under the Inventory Facility vary depending upon
the  product  supplier,  but  generally  are due 30 days  from  the  date of the
advance. No interest or finance charges are payable on the Inventory Facility if
payments  are made when due.  The Company has the  ability  under the  Inventory
Facility to extend payments 30 days beyond the initial due date with a financing
fee of  LIBOR  plus  3.75%.  This  ability  is  limited  by  minimum  collateral
restrictions. The Inventory Facility has a termination date of October 18, 2002.

During the first quarter of fiscal year 2000 it became apparent that the Company
would not meet its minimum  EBITDA and maximum debt to EBITDA  covenants for the
quarter ending January 30, 2000 and for each of the remaining  periods in fiscal
2000. As a result, the Company renegotiated these covenants,  as well as related
financial ratio covenants.  See "Recent  Developments - Liquidity  Issues" above
regarding the Company's request for modifications to the Inventory  Facility and
for additional information about the Company's liquidity position.

Cash used in operating  activities was $117 million in the quarter ended January
30, 2000 as compared to $24 million used by operating  activities in the quarter
ended  January  31,  1999.  The  change was  primarily  due to a net loss of $48
million  and an  increase  in cash used in  accounts  receivable  offset by cash
provided  by  inventory  and a  decrease  in cash used by a change  in  accounts
payable.  During the  quarter  ended  January  30,  2000,  cash used by accounts
receivable  was $177  million,  compared to a $230 million  provided by accounts
receivable in the quarter  ended January 31, 1999.  The change was primarily due
to a reduction  in the amount of  receivables  sold to a finance  company in the
first fiscal quarter of 2000. The amount of sold receivables decreased from $255
million at October 31, 1999 to zero at January 30, 2000. The change in inventory
provided $91 million in cash in the first quarter of fiscal 2000 compared to $19
million used in the first  quarter of fiscal 1999.  The change in inventory  was
primarily due to the Company's efforts to decrease  inventory levels in response
to lower sales  volume and  borrowing  capability.  Changes in accounts  payable
provided  cash of $1 million in the quarter  ended  January 30, 2000 compared to
cash used of $243 million for the quarter ended  January 31, 1999.  Cash used in
the first quarter of fiscal 1999 was primarily due to changes in supplier credit
terms.

Cash  used in  investing  activities  decreased  from $18  million  in the first
quarter  of fiscal  1999 to $3  million  in the  first  quarter  of fiscal  2000
primarily  due to a decrease in purchases of property and  equipment as a result
of reduced capital expenditure initiatives to facilitate cash flow.

Cash  provided by financing  activities  was $85 million in the first quarter of
fiscal 2000 compared $42 million in the first quarter of fiscal 1999. The change
was primarily due to borrowings under the Company's line of credit.


                                       12
<PAGE>

Changes in Supplier Terms and Conditions

The key suppliers of the Company  provide  various  incentives for promoting and
marketing their product  offerings.  A large portion of the incentives is passed
on to the Company's customers.  However, a portion of the incentives  positively
impact the Company's income.

Beginning in fiscal 1998, the major  manufacturers  announced and/or  instituted
changes in their sales  incentive  programs and inventory  management  programs.
Pursuant to these changes,  the major  manufacturers have (i) reduced the amount
of product  that the  Company is allowed to return,  (ii)  reduced the amount of
price protection coverage offered to the Company and (iii) changed incentives to
programs based on sales of the manufacturers' products, rather than on purchases
of the products from the manufacturers.

In addition,  several of the Company's major suppliers have changed the terms of
their credit arrangements with the Company.  These changes include a decrease in
the number of days the Company has to pay for product  purchases  and a decrease
in the amount of reseller  purchases  from the Company  that the  suppliers  are
willing to subsidize. These changes have increased the Company's working capital
requirements and financing  costs.  Further changes in incentives or other terms
and conditions could have a material  adverse effect on the Company's  operating
results.

During the quarter ended August 1, 1999,  the Company  announced a change in the
Pinacor product sourcing  relationship with Compaq. In October 1999, the Company
began sourcing certain Compaq products from other Compaq distributors instead of
sourcing  directly  from Compaq.  Compaq has indicated  that Pinacor  remains an
authorized  distributor  and  reseller and will be able to  distribute  the full
range of Compaq  products.  In  addition,  Pinacor  will  continue to order some
products directly from Compaq. During the quarter ended January 30, 2000, Compaq
sales decreased approximately $106 million, or 55%, when compared to the quarter
ended  October 31,  1999.  In addition to the  declines in Compaq  revenue,  the
Company  believes  that sales of other  suppliers'  products  have  decreased as
customers  that purchase  Compaq  products from other sources move  purchases of
other  products to those  sources.  In response to the Compaq  change as well as
other  changes in product  sales,  Pinacor  has taken and will  continue to take
actions  to reduce  operating  expenses  to  partially  offset the impact of the
revenue decline. See "Recent Developments - Response to Current Issues" above.

Potential Fluctuations in Quarterly Results

The Company's  operating results may vary  significantly from quarter to quarter
depending  on certain  factors,  including,  but not limited to,  demand for the
Company's information technology products and services,  availability of working
capital and product  financing,  the amount of supplier incentive funds received
by the  Company,  the  results of  acquired  businesses,  product  availability,
competitive  conditions,  new product  introductions,  changes in customer order
patterns,  changes  in  supplier  terms  and  conditions  and  general  economic
conditions.  In  particular,  the Company's  operating  results are sensitive to
changes in the mix of product and service revenues,  product margins,  inventory
adjustments,  and interest rates.  Although the Company  attempts to control its
expense  levels,  these  levels are based,  in part,  on  anticipated  revenues.
Therefore, the Company may not be able to control spending in a timely manner to
compensate  for  any  unexpected  revenue  shortfall.  As  a  result,  quarterly
period-to-period   comparisons  of  the  Company's  financial  results  are  not
necessarily  meaningful and should not be relied upon as an indication of future
performance.  In addition,  although the Company's financial performance has not
exhibited  significant  seasonality  in the past,  the Company and the  computer
industry in general tend to follow a sales pattern with peaks occurring near the
end of the calendar  year,  due  primarily to special  supplier  promotions  and
year-end business  purchases.  However,  sales for the quarter ended January 31,
2000 were negatively impacted due to Year 2000 concerns.


                                       13
<PAGE>

Inflation

The Company  believes that inflation has generally not had a material  impact on
its operations.


                                       14
<PAGE>

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

10.1  Agreement and General Release,  dated February 15, 2000, between MicroAge,
      Inc. and James R. Daniel.

10.2  Agreement and General Release,  dated February 15, 2000,  between Pinacor,
      Inc., and James G. Manton.

10.3  Second Amendment to the MicroAge,  Inc.  Retirement Savings Plan, dated as
      of March 15, 2000.

10.4  Second  Amendment to the MicroAge,  Inc.  Executive  Supplemental  Savings
      Plan, dated as of March 15, 2000.

10.5  Letter agreement,  dated March 12, 1999, regarding extension of Authorized
      Apple  Wholesaler  U.S.  Sales  Agreement,  from Apple  Computer,  Inc. to
      Pinacor, Inc.

10.6  Amendment to Authorized Apple  Wholesaler U.S. Sales Agreement,  dated May
      17, 1999, between Pinacor, Inc. and Apple Computer, Inc.

10.7  Letter agreement,  dated June 25, 1999,  regarding  Revised  Authorization
      Requirements  Applicable to Build-To-Order Business Systems Products under
      Compaq Computer Corporation United States Reseller Agreement dated June 1,
      1995, from Compaq Computer Corporation to MicroAge Computer Centers, Inc.

10.8  Compaq Computer  Corporation Channel Program  Authorization  Requirements,
      dated September 1, 1999, between Compaq Computer  Corporation and MicroAge
      Computer Centers, Inc.

10.9  Distributor  Agreement,  dated  September 14, 1999,  between  Compaq Latin
      America Corporation and Pinacor, Inc.

10.10 U.S. Agreement for Authorized  Distributor,  dated March 25, 1999, between
      Pinacor, Inc. and Hewlett-Packard Company.

10.11 Software Installation Agreement,  dated November 1, 1999, between Pinacor,
      Inc. and Hewlett-Packard Company.

10.12 IBM Business Partner Agreement,  Authorized Assembler Attachment, undated,
      between Pinacor, Inc. and International Business Machines Corporation.

10.13 IBM Business Partner Agreement,  Co-Location Attachment, dated January 12,
      1999,   between  Pinacor,   Inc.  and   International   Business  Machines
      Corporation.

10.14 Amendment to IBM Business Partner Agreement, Co-Location Attachment, dated
      May 25, 1999,  between Pinacor,  Inc. and International  Business Machines
      Corporation.

10.15 IBM Business Partner Agreement,  Distributor Profile,  dated September 10,
      1999,   between  Pinacor,   Inc.  and   International   Business  Machines
      Corporation.

10.16 IBM Digital  Manufacturing  Solutions (DMS), Project Change Authorization,
      dated May 24,  1999,  between  Pinacor,  Inc. and  International  Business
      Machines Corporation.

10.17 IBM    Business    Partner    Agreement     Printing    Systems    Company
      Reseller/Distributor  Profile,  dated September 27, 1999, between Pinacor,
      Inc. and International Business Machines Corporation.

27  Financial Data Schedule

(b)   The Company did not file any reports on Form 8-K during the quarter  ended
      January 30, 2000.

<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                          MICROAGE, INC.

                                          (Registrant)

Date:    March 20, 2000             By:   /s/ Jeffrey D. McKeever
                                          -----------------------
                                          Jeffrey D. McKeever
                                          Chairman of the Board and
                                          Chief Executive Officer

Date:    March 20, 2000             By:   /s/ Raymond L. Storck
                                          ---------------------
                                          Raymond L. Storck
                                          Vice President, Controller,
                                          Chief Financial Officer and Treasurer