<PAGE>
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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
 
                             WASHINGTON, D.C. 20549
 
                            ------------------------
 
                                   FORM 10-Q
 
  /X/    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934
 
              FOR THE QUARTERLY PERIOD ENDED MARCH 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 1-11566
 
                            ------------------------
 
                                  COMPUSA INC.
 
             (Exact name of registrant as specified in its charter)
 
                  DELAWARE                             75-2261497
          (State of incorporation)                  (I.R.S. Employer
       incorporation or organization)              Identification No.)
 
                14951 NORTH DALLAS PARKWAY, DALLAS, TEXAS 75240
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
 
                            ------------------------
 
         REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (972) 982-4000
 
    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 / /
 
    The registrant had 91,737,451 shares of common stock, $.01 per share par
value, outstanding as of May 6, 1999.
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                         PART I--FINANCIAL INFORMATION
 
ITEM 1.  FINANCIAL STATEMENTS
 
<TABLE>
<S>                                                                                                   <C>
Consolidated Balance Sheets at March 27, 1999 (unaudited) and June 27, 1998.........................    3
 
Consolidated Statements of Operations for the thirteen weeks and thirty-nine weeks ended March 27,
  1999 and March 28, 1998 (unaudited)...............................................................    4
 
Consolidated Statements of Cash Flows for the thirty-nine weeks ended March 27, 1999 and March 28,
  1998 (unaudited)..................................................................................    5
 
Notes to Consolidated Financial Statements (unaudited)..............................................    6
</TABLE>
 
    Separate financial statements relating to the Company's subsidiaries are
omitted since all of them are wholly owned and have each guaranteed the
Company's 9 1/2% Senior Subordinated Notes due 2000 on a full, unconditional,
and joint and several basis and the Company does not consider such separate
financial statements to be material to investors.
 
<TABLE>
<CAPTION>
<S>                                                                                                   <C>
 
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS......   13
 
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK..................................   26
 
                                        PART II--OTHER INFORMATION
 
ITEM 1.  LEGAL PROCEEDINGS..........................................................................   27
 
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K...........................................................   27
 
SIGNATURES..........................................................................................   29
 
EXHIBITS............................................................................................   30
</TABLE>
 
                                       2
<PAGE>
                                  COMPUSA INC.
                          CONSOLIDATED BALANCE SHEETS
                         (IN THOUSANDS, EXCEPT SHARES)
 
<TABLE>
<CAPTION>
                                                                       MARCH 27,        JUNE 27,
                                                                         1999             1998
                                                                     -------------     -----------
                                                                      (UNAUDITED)
<S>                                                                  <C>               <C>
                                              ASSETS
Current assets:
  Cash and cash equivalents......................................    $     241,911     $   151,779
  Accounts receivable, net of allowance for doubtful accounts of
    $4,209 and $3,524 at March 27, 1999 and June 27, 1998,
    respectively.................................................          251,925         214,084
  Merchandise inventories........................................          802,752         520,762
  Deferred income taxes--current.................................           17,570           9,762
  Prepaid expenses and other.....................................           25,347          26,480
                                                                     -------------     -----------
    Total current assets.........................................        1,339,505         922,867
Property and equipment, net......................................          232,907         210,528
Deferred income taxes............................................            5,946          18,076
Costs in excess of net assets of acquired businesses.............          104,872           3,069
Other assets.....................................................            5,651           5,970
                                                                     -------------     -----------
                                                                     $   1,688,881     $ 1,160,510
                                                                     -------------     -----------
                                                                     -------------     -----------
 
                               LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable...............................................    $     820,681     $   534,620
  Accrued liabilities............................................          181,018          98,714
  Current portion of capital lease obligations...................            1,035             666
                                                                     -------------     -----------
    Total current liabilities....................................        1,002,734         634,000
Capital lease obligations........................................              352           1,872
Senior Subordinated Notes........................................          110,000         110,000
Note payable to Tandy Corporation................................          136,000              --
Commitments and contingencies....................................               --              --
Stockholders' equity:
  Preferred stock, $.01 per share par value, 10,000 shares
    authorized, none issued......................................               --              --
  Common stock, $.01 per share par value; 325,000,000 shares
    authorized with 94,062,235 and 93,372,545 shares issued at
    March 27, 1999 and June 27, 1998, respectively...............              941             934
  Paid-in capital................................................          280,213         278,000
  Retained earnings..............................................          216,816         198,045
                                                                     -------------     -----------
                                                                           497,970         476,979
  Less: Treasury stock, at cost, with 2,339,678 and 2,507,227
    shares at March 27, 1999 and June 27, 1998, respectively.....          (58,175)        (62,341)
                                                                     -------------     -----------
  Total stockholders' equity.....................................          439,795         414,638
                                                                     -------------     -----------
                                                                     $   1,688,881     $ 1,160,510
                                                                     -------------     -----------
                                                                     -------------     -----------
</TABLE>
 
                            See accompanying notes.
 
                                       3
<PAGE>
                                  COMPUSA INC.
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                         THIRTY-NINE WEEKS
                                                THIRTEEN WEEKS ENDED           ENDED
                                               ----------------------  ----------------------
                                               MARCH 27,   MARCH 28,   MARCH 27,   MARCH 28,
                                                  1999        1998        1999        1998
                                               ----------  ----------  ----------  ----------
<S>                                            <C>         <C>         <C>         <C>
Net sales....................................  $1,691,350  $1,451,819  $4,859,864  $4,100,356
Cost of sales and occupancy costs............   1,474,843   1,246,634   4,207,240   3,504,826
                                               ----------  ----------  ----------  ----------
  Gross profit...............................     216,507     205,185     652,624     595,530
 
Operating expenses...........................     168,571     134,190     485,332     369,097
Pre-opening expenses.........................         392         513       3,853       5,993
General and administrative expenses..........      50,233      27,851     121,228      82,259
                                               ----------  ----------  ----------  ----------
  Operating (loss) income....................      (2,689)     42,631      42,211     138,181
 
Other expense (income):
  Interest expense...........................       7,187       3,045      18,559       9,141
  Other income, net..........................      (1,828)     (1,778)     (6,872)     (5,862)
                                               ----------  ----------  ----------  ----------
                                                    5,359       1,267      11,687       3,279
                                               ----------  ----------  ----------  ----------
(Loss) income before income taxes............      (8,048)     41,364      30,524     134,902
Income tax (benefit) expense.................      (3,108)     15,926      11,753      51,938
                                               ----------  ----------  ----------  ----------
Net (loss) income............................  $   (4,940) $   25,438  $   18,771  $   82,964
                                               ----------  ----------  ----------  ----------
                                               ----------  ----------  ----------  ----------
 
Basic (loss) earnings per share..............  $    (0.05) $     0.28  $     0.21  $     0.91
Diluted (loss) earnings per share............  $    (0.05) $     0.27  $     0.20  $     0.87
 
Weighted average common shares...............      91,553      91,518      91,401      91,527
Weighted average common shares assuming
  dilution...................................      91,553      94,692      92,811      95,238
</TABLE>
 
                            See accompanying notes.
 
                                       4
<PAGE>
                                  COMPUSA INC.
 
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
                                 (IN THOUSANDS)
 
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                                THIRTY-NINE WEEKS ENDED
                                                                                ------------------------
                                                                                 MARCH 27,    MARCH 28,
                                                                                   1999         1998
                                                                                -----------  -----------
<S>                                                                             <C>          <C>
Cash flows provided by operating activities:
  Net income..................................................................  $    18,771  $    82,964
    Adjustments to reconcile net income to net cash provided by operating
      activities:
      Depreciation and amortization...........................................       51,173       34,695
      Deferred income taxes...................................................        4,888       (1,199)
      Other non-cash charges..................................................        2,410           --
    Changes in assets and liabilities:
      Decrease (increase) in:
        Accounts receivable...................................................        5,535      (21,093)
        Merchandise inventories...............................................     (134,450)    (123,098)
        Prepaid expenses and other assets.....................................        4,846       (9,176)
      Increase in accounts payable and accrued liabilities....................      216,006      175,005
                                                                                -----------  -----------
        Total adjustments.....................................................      150,408       55,134
                                                                                -----------  -----------
        Net cash provided by operating activities.............................      169,179      138,098
 
Cash (used in) provided by investing activities:
  Capital expenditures........................................................      (54,054)     (91,455)
  Payment for purchase of Computer City, net of cash acquired.................      (35,878)          --
  Proceeds from sale of Canadian stores.......................................        9,609           --
  Other.......................................................................          443          145
                                                                                -----------  -----------
        Net cash used in investing activities.................................      (79,880)     (91,310)
 
Cash flows provided by (used in) financing activities:
  Proceeds from issuance of common stock......................................        1,545        6,949
  Purchase of treasury stock..................................................           --      (44,314)
  Sale of treasury stock to benefit plan......................................        1,079           --
  Payments under capital lease obligations....................................       (1,791)      (2,268)
                                                                                -----------  -----------
        Net cash provided by (used in) financing activities...................          833      (39,633)
 
Net increase in cash and cash equivalents.....................................       90,132        7,155
Cash and cash equivalents at beginning of period..............................      151,779      209,929
                                                                                -----------  -----------
Cash and cash equivalents at end of period....................................  $   241,911  $   217,084
                                                                                -----------  -----------
                                                                                -----------  -----------
</TABLE>
 
                            See accompanying notes.
 
                                       5
<PAGE>
                                  COMPUSA INC.
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
                                  (UNAUDITED)
 
1.  BASIS OF PRESENTATION
 
    The consolidated financial statements include the accounts of CompUSA Inc.
and its wholly-owned subsidiaries (collectively, the "Company"). All significant
intercompany accounts and transactions have been eliminated. In the opinion of
management, the accompanying unaudited consolidated financial statements contain
all adjustments, consisting only of normal recurring adjustments, necessary to
present fairly the financial position, results of operations, and cash flows of
the Company for the applicable interim periods. The results of operations for
these periods are not necessarily comparable to, or indicative of, results of
any other interim period or for the fiscal year as a whole.
 
    The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
interim financial statements. Therefore, these financial statements should be
read in conjunction with the Company's Annual Report on Form 10-K for the fiscal
year ended June 27, 1998.
 
    The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make certain
estimates and assumptions. These estimates and assumptions affect the reported
amounts of assets, liabilities, revenues, and expenses and the disclosure of
gain and loss contingencies at the date of the consolidated financial
statements. Actual results could differ from those estimates.
 
2.  ACQUISITION OF COMPUTER CITY
 
    On August 31, 1998, the Company completed its acquisition of Computer City,
Inc. ("Computer City") from Tandy Corporation ("Tandy"), for an aggregate
purchase price of approximately $175 million, subject to certain post-closing
adjustments, payable in a note and cash. The Company expects to finalize the
calculation of the purchase price due Tandy in connection with the acquisition
of Computer City in the fourth quarter of fiscal 1999.
 
    In connection with the acquisition of Computer City, the Company issued a
$136 million subordinated promissory note payable to Tandy (the "Seller Note").
The Seller Note bears interest at a rate of 9.48% per annum and provides for its
repayment in semi-annual installments over a period of ten years. The first
three years of payments are interest only, with the first principal payment due
in December 2001. The Seller Note ranks pari passu with the Company's 9 1/2%
Senior Subordinated Notes due 2000 ("Senior Subordinated Notes"). The unpaid
principal amount of the Seller Note may be prepaid, in whole or in part, at any
time at the option of the Company, without premium or penalty.
 
    Effective November 1, 1998, the Company sold the seven Canadian Computer
City supercenters acquired by the Company to Future Shop Ltd. for approximately
$9.6 million in cash and the assumption of certain liabilities before
post-closing adjustments. In the fourth quarter of fiscal 1999, the Company paid
approximately $2.4 million to Future Shop Ltd. to effect a reduction in the
purchase price due the Company after the finalization of such post-closing
adjustments.
 
    The purchase of Computer City has been accounted for under the purchase
method of accounting. Accordingly, the purchase price paid has been
preliminarily allocated to the acquired assets and liabilities based on
estimated fair values as of the acquisition date. The excess of the purchase
price paid over the
 
                                       6
<PAGE>
                                  COMPUSA INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
2.  ACQUISITION OF COMPUTER CITY (CONTINUED)
estimated fair values of the acquired assets and liabilities (goodwill) of
approximately $105 million is being amortized over 20 years on a straight-line
basis.
 
    A summary of the purchase price paid to acquire Computer City and the
preliminary allocation of the purchase price to the net assets acquired is as
follows:
 
<TABLE>
<CAPTION>
                                                                          AS OF MARCH 27, 1999
                                                                          --------------------
                                                                             (IN THOUSANDS)
<S>                                                                       <C>        <C>
Purchase price paid to acquire Computer City:
  Cash paid at closing..................................................             $  36,450
  Note issued to Tandy..................................................               136,000
  Transaction costs.....................................................                 2,921
                                                                                     ---------
Total consideration paid................................................               175,371
 
Net assets acquired at net book value...................................    220,851
  Adjustments to state net assets acquired at fair value:
    Write-down of merchandise inventories...............................    (55,517)
    Write-down of fixed assets..........................................    (49,946)
    Future rental obligations and related carrying costs for closed
      stores............................................................    (29,000)
    Other...............................................................    (16,017)
                                                                          ---------
Estimated fair value of net assets acquired.............................                70,371
                                                                                     ---------
Costs in excess of net assets acquired..................................             $ 105,000
                                                                                     ---------
                                                                                     ---------
</TABLE>
 
    The Company will assess the recoverability of costs in excess of net assets
acquired periodically based on existing facts and circumstances and projected
earnings before interest, depreciation, and amortization, on an undiscounted
basis. Should the Company's assessment indicate an impairment of this asset in
the future, an appropriate write-down will be recorded.
 
    A rollforward of the reserve for future rental obligations and related
carrying costs for closed stores is as follows:
 
<TABLE>
<CAPTION>
                                                                                                          (IN
                                                                                                      THOUSANDS)
                                                                                                     -------------
<S>                                                                                                  <C>
Present value of estimated future rental obligations and related carrying costs for closed
  stores...........................................................................................    $  29,000
Payments of rents and other carrying costs.........................................................      (10,408)
Cash received upon the assumption of certain leases by a third party...............................        4,066
Accretion of imputed interest at 9.5% per annum....................................................        1,379
                                                                                                     -------------
Balance as of March 27, 1999.......................................................................    $  24,037
                                                                                                     -------------
                                                                                                     -------------
</TABLE>
 
    The accompanying statements of operations for the thirteen and thirty-nine
weeks ended March 27, 1999 include the results of operations from the
acquisition date for the 37 Computer City stores in the United States that the
Company is operating as CompUSA Computer Superstores(SM) and two former Computer
City "small market" stores. The results of liquidating the 55 Computer City
stores in the United States closed by the Company, and the seven Computer City
supercenters in Canada sold by the Company,
 
                                       7
<PAGE>
                                  COMPUSA INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
2.  ACQUISITION OF COMPUTER CITY (CONTINUED)
are not included in the accompanying statements of operations, but rather
represent adjustments to the value of the related assets acquired and
liabilities assumed. The following pro forma combined net sales, net income
(loss), and diluted earnings (loss) per share data summarize the results of
operations of the Company for the third quarter of fiscal 1998 and first nine
months of both fiscal 1999 and 1998 as if Computer City had been acquired as of
the beginning of fiscal 1998. The pro forma results given below are not
necessarily indicative of what actually would have occurred if the acquisition
had been in effect during the periods presented, and are not intended to be a
projection of future results or trends.
 
<TABLE>
<CAPTION>
                                                     THIRTEEN       THIRTY-NINE WEEKS
                                                    WEEKS ENDED           ENDED
                                                    -----------   ----------------------
                                                     MARCH 28,    MARCH 27,   MARCH 28,
                                                       1998          1999        1998
                                                    -----------   ----------  ----------
                                                      (IN THOUSANDS, EXCEPT PER SHARE
                                                                   DATA)
<S>                                                 <C>           <C>         <C>
Net sales.........................................  $1,658,064    $4,983,131  $4,711,520
Net income (loss).................................      16,580        (2,080)     53,560
Diluted earnings (loss) per share.................        0.18         (0.02)       0.56
</TABLE>
 
3.  EQUITY
 
    The calculation of basic and diluted earnings (loss) per share is summarized
as follows:
 
<TABLE>
<CAPTION>
                                                                                 THIRTY-NINE WEEKS ENDED
                                                         THIRTEEN WEEKS ENDED
                                                       ------------------------  ------------------------
                                                        MARCH 27,    MARCH 28,    MARCH 27,    MARCH 28,
                                                          1999         1998         1999         1998
                                                       -----------  -----------  -----------  -----------
                                                             (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                                    <C>          <C>          <C>          <C>
BASIC (LOSS) EARNINGS PER SHARE:
Net (loss) income....................................   $  (4,940)   $  25,438    $  18,771    $  82,964
 
Weighted average common shares outstanding...........      91,553       91,518       91,401       91,527
                                                       -----------  -----------  -----------  -----------
 
Basic (loss) earnings per share......................   $   (0.05)   $    0.28    $    0.21    $    0.91
                                                       -----------  -----------  -----------  -----------
                                                       -----------  -----------  -----------  -----------
DILUTED (LOSS) EARNINGS PER SHARE:
Net (loss) income....................................   $  (4,940)   $  25,438    $  18,771    $  82,964
 
Weighted average common shares outstanding...........      91,553       91,518       91,401       91,527
Incremental shares assuming dilution.................          --        3,174        1,410        3,711
                                                       -----------  -----------  -----------  -----------
 
Weighted average common shares assuming dilution.....      91,553       94,692       92,811       95,238
                                                       -----------  -----------  -----------  -----------
 
Diluted (loss) earnings per share....................   $   (0.05)   $    0.27    $    0.20    $    0.87
                                                       -----------  -----------  -----------  -----------
                                                       -----------  -----------  -----------  -----------
</TABLE>
 
    For the thirteen weeks ended March 27, 1999, the Company's outstanding stock
options have been excluded from the calculation of the diluted loss per share
since they were anti-dilutive.
 
                                       8
<PAGE>
                                  COMPUSA INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
3.  EQUITY (CONTINUED)
    In March 1999, the Company made a cash contribution to the Company's defined
contribution profit-sharing plan to effect the Company's required contribution
to the plan for 1998, which the plan used to purchase from the Company 167,549
shares of its common stock which the Company held in treasury.
 
4.  COMMITMENTS AND CONTINGENCIES
 
    On April 23, 1998, a lawsuit, Hoeck v. CompUSA Inc. et al., was filed by a
stockholder of the Company in the United States District Court for the Northern
District of Texas against the Company and certain of its officers, seeking class
action status on behalf of the purchasers of the Company's Common Stock and
related publicly traded options during the class period. On June 24, 1998, a
second stockholder suit was filed against the Company making virtually the same
allegations. On August 24, 1998, a consolidated amended complaint was filed in
the Hoeck case, effectively consolidating the two cases. Among other things, the
plaintiffs allege that in order to halt a decline in the market price of
CompUSA's common stock and to artificially inflate the stock price, CompUSA
insiders falsely reported to the market in early January 1998 that CompUSA was
achieving strong sales of certain types of products. The plaintiffs also allege
that misstatements and omissions by Company personnel related to projected and
historical operating results, sales and other matters involving corporate
operations resulted in an inflation of the stock price. The plaintiffs seek
unspecified compensatory damages, rescissory damages, interest, and attorneys'
fees and costs, as well as certain equitable relief. On September 25, 1998, the
Company filed a Motion to Dismiss together with a brief in support of the
motion. The Court has not ruled on the motion, and all discovery is stayed until
resolution of the Company's Motion to Dismiss. Based on currently available
information, it is not possible to give an estimate of the possible loss or
range of loss that might be incurred by the Company if the plaintiffs in the
Hoeck lawsuit were to prevail in the litigation. The Company believes the
plaintiffs' claims are without merit and intends to vigorously defend against
the charges.
 
    On January 14, 1999, a nonclass lawsuit, Tom Johnson v. Circuit City Stores,
Inc., et al., was filed by plaintiff Tom Johnson on behalf of himself and the
California public against Circuit City Stores, Inc. and seven other computer
products retailers, including the Company. Without identifying any specific acts
by any specific retailers, Johnson's complaint alleges that such retailers have
(1) misrepresented the Year 2000 ("Y2K") compliance of products sold by them,
(2) sold unnecessary Y2K fixes, and/or (3) failed to disclose the need for Y2K
fixes or upgrades. Johnson's complaint requests (1) the freezing of the
retailers' assets, (2) the restitution of all funds acquired by the retailers
since January 15, 1995, by means of the alleged conduct, (3) an injunction
requiring the retailers to disclose the nature of the Y2K problem, a means to
determine Y2K compliance and what fixes are available to all of their customers
who have bought products since January 15, 1995, and (4) attorneys' fees.
Together with the other retailers, the Company has brought a motion to dismiss
the complaint and such motion is currently pending. The Company believes the
claims are without merit and intends to vigorously defend against such charges.
 
    In addition to the matters described above, the Company is a defendant from
time to time in lawsuits incidental to its business. Based on currently
available information, the Company believes that resolution of all known
contingencies, including the matters described above, would not have a material
adverse impact on the Company's financial statements. However, there can be no
assurances that future costs would not be material to results of operations of
the Company for a particular future period. In addition,
 
                                       9
<PAGE>
                                  COMPUSA INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
4.  COMMITMENTS AND CONTINGENCIES (CONTINUED)
the Company's estimates of future costs are subject to change as circumstances
change and additional information becomes available during the course of
litigation.
 
5.  SUBSIDIARY GUARANTEES
 
    The Senior Subordinated Notes are guaranteed on a full, unconditional, and
joint and several basis by all of the Company's direct and indirect
subsidiaries, each of which is wholly owned. The combined summarized information
of these subsidiaries is as follows:
 
<TABLE>
<CAPTION>
                                                                          AS OF AND FOR THE
                                                                          THIRTY-NINE WEEKS
                                                                                ENDED
                                                                         --------------------
                                                                         MARCH 27,  MARCH 28,
                                                                           1999       1998
                                                                         ---------  ---------
                                                                            (IN THOUSANDS)
<S>                                                                      <C>        <C>
Intercompany receivables...............................................  $ 260,200  $ 195,216
Other current assets...................................................    612,934    454,756
                                                                         ---------  ---------
Total current assets...................................................    873,134    649,972
 
Noncurrent assets......................................................    317,442    190,785
 
Intercompany payables..................................................     28,678     17,466
Other current liabilities..............................................    140,314    275,957
                                                                         ---------  ---------
Total current liabilities..............................................    168,992    293,423
 
Long-term debt and liabilities.........................................        319      1,972
 
Net sales..............................................................  3,358,911  2,788,990
Intercompany revenues..................................................    203,454    159,361
Costs and expenses.....................................................  3,351,393  2,701,041
Intercompany expenses..................................................    139,704    104,925
Net income.............................................................     43,830     87,567
</TABLE>
 
    In the preparation of the Company's consolidated financial statements, all
intercompany accounts were eliminated. There are no restrictions that limit the
ability of the Company's subsidiaries to declare and pay dividends to the
Company.
 
    Effective March 28, 1999, the Company completed the formation of its
wholly-owned subsidiary, CompUSA Net.com Inc. ("CompUSA Net.com") by
contributing to it the net assets of CompUSA Direct. CompUSA Net.com offers
desktop and notebook computers, software, printers, scanners, accessories, and
other electronic and digital products via the Internet. Beginning in the fourth
quarter of fiscal 1999, the mail order and other sales operations previously
conducted by CompUSA Direct will be phased out or transferred to the Company.
CompUSA Net.com is not a guarantor of the Senior Subordinated Notes.
 
                                       10
<PAGE>
                                  COMPUSA INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
6.  SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
 
<TABLE>
<CAPTION>
                                                                               THIRTY-NINE
                                                                               WEEKS ENDED
                                                                          ----------------------
                                                                          MARCH 27,   MARCH 28,
                                                                            1999        1998
                                                                          ---------  -----------
                                                                              (IN THOUSANDS)
<S>                                                                       <C>        <C>
Cash paid (received) during the periods for:
  Interest..............................................................  $   9,887   $   5,634
  Income taxes..........................................................     (7,886)     47,784
 
Investing activities not affecting cash are as follows:
  Additions to property and equipment under capital leases..............  $     594   $      95
 
Financing activities not affecting cash are as follows:
  Note payable to Tandy issued in connection with the Computer City
    acquisition.........................................................  $ 136,000   $      --
</TABLE>
 
7.  NEW ACCOUNTING PRONOUNCEMENTS
 
    The American Institute of Certified Public Accountant's (the "AICPA")
Accounting Standards Executive Committee has issued Statement of Position
("SOP") 98-5, "Reporting on the Costs of Start-Up Activities." This SOP is
effective for financial statements for fiscal years beginning after December 15,
1998. The SOP requires that entities expense start-up costs and organization
costs as they are incurred. The provisions of SOP 98-5 were adopted by the
Company in the preparation of the financial statements included in the Quarterly
Report on Form 10-Q for the thirteen weeks ended September 26, 1998. The
adoption of the provisions of SOP 98-5 had no material impact on the Company's
financial statements.
 
    The AICPA has issued SOP 98-1, "Accounting for Costs of Computer Software
Developed or Obtained for Internal Use," which is effective for fiscal years
beginning after December 15, 1998. The Company's current policy falls within the
guidelines of SOP 98-1.
 
    In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 130, "Reporting Comprehensive Income," which establishes standards for
reporting and displaying comprehensive income and its components in a full set
of general-purpose financial statements. SFAS No. 130 requires enterprises to
report comprehensive income to measure more effectively all changes in equity of
an enterprise that result from certain recognized transactions and other
economic events other than income earned in the ordinary course of business.
SFAS No. 130 is effective for financial statements for fiscal years beginning
after December 15, 1997. The provisions of SFAS No. 130 were adopted by the
Company in the preparation of the financial statements included in the Quarterly
Report on Form 10-Q for the thirteen weeks ended September 26, 1998. The
adoption of the provisions of SFAS No. 130 had no impact on the Company's
financial statements.
 
    In June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information," which establishes standards requiring
public business enterprises to report information about operating segments in
annual financial statements and requires that those enterprises report selected
information about operating segments in interim financial reports. SFAS No. 131
also establishes standards for related disclosures about products and services,
geographic areas, and major customers. SFAS No. 131 is effective for financial
statements for fiscal years beginning after December 15, 1997, and therefore the
Company will adopt the annual disclosure requirements in the preparation of its
Annual
 
                                       11
<PAGE>
                                  COMPUSA INC.
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
                                  (UNAUDITED)
 
7.  NEW ACCOUNTING PRONOUNCEMENTS (CONTINUED)
Report on Form 10-K for the fiscal year ending June 26, 1999, while the
quarterly disclosure requirements will be adopted in fiscal year 2000.
Management has not determined the impact of SFAS No. 131 on the Company's
financial statement disclosures.
 
8.  CREDIT AGREEMENT
 
    Effective March 27, 1999, the Company executed an amendment to its credit
agreement with a consortium of banks that expires in March 2001 to provide a
$230 million credit facility under which borrowings are secured by the Company's
accounts receivable and all equity interests in the Company's subsidiaries (the
"Credit Agreement"). Funds borrowed under the Credit Agreement may be used for
any corporate purpose, including purchasing or redeeming the Senior Subordinated
Notes in part or in full subsequent to December 31, 1999. The Credit Agreement
requires that the Company maintain certain financial ratios and a minimum net
worth. The Credit Agreement imposes certain limitations on acquisitions, capital
expenditures, indebtedness, liens, and mergers and consolidations. The Credit
Agreement also prohibits the Company from paying dividends and purchasing shares
of the Company's common stock until the Company has exceeded certain financial
covenants.
 
    The Company's ability to incur borrowings under the Credit Agreement is
reduced by outstanding letters of credit and, in certain circumstances, is
further reduced based upon the amount of the Company's eligible accounts
receivable and the financial covenants contained in the Credit Agreement. Under
the terms of the Credit Agreement, as of March 27, 1999, the Company had
approximately $65 million available for future borrowings under the Credit
Agreement.
 
    Borrowings under the Credit Agreement bear interest, at the Company's
option, at either a prime rate (7.8% per annum as of March 27, 1999) or a rate
based on the London Interbank Offering Rate (LIBOR) of 4.9% as of March 27,
1999, plus a specified margin, currently 2.25%. The Credit Agreement also
provides for an increase in the specified margin by .75% should both the Senior
Subordinated Notes be paid in full and borrowings under the Credit Agreement
exceed 40% of the total amount of the Credit Agreement. The Company also pays
certain commitment and agent fees. The Company has the annual option to extend
the Credit Agreement for an additional year with the banks' approval.
 
    The indebtedness under the Credit Agreement is guaranteed on a full,
unconditional, and joint and several basis by all the subsidiaries of the
Company except CompUSA Net.com. The Credit Agreement allows the Company to
designate one or more of its subsidiaries to be free from most of the
restrictions under the Credit Agreement so long as no default will exist and
such subsidiaries do not contribute more than 10% of the Company's consolidated
cash flow or hold more than 10% of the Company's consolidated assets.
 
                                       12
<PAGE>
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS
 
CAUTIONARY STATEMENT REGARDING RISKS AND UNCERTAINTIES THAT MAY AFFECT FUTURE
  RESULTS
 
    This Quarterly Report on Form 10-Q contains forward-looking statements about
the business, financial condition, and prospects of the Company and Year 2000
issues. The actual results of the Company could differ materially from those
indicated by the forward-looking statements because of various risks and
uncertainties, including without limitation changes in product demand, the
availability of products, changes in competition, the ability of the Company to
open new stores in accordance with its plans, economic conditions, real estate
market fluctuations, interest rate fluctuations, dependence on manufacturers'
product development, various inventory risks due to changes in market
conditions, changes in tax and other governmental rules and regulations
applicable to the Company, and other risks indicated herein and in the Company's
other filings with the Securities and Exchange Commission. The Company's entry
into the build-to-order market with its CompUSA PC(TM) brand of personal
computers in the first quarter of fiscal 1998, the opening of its own
build-to-order manufacturing facility in the second quarter of fiscal 1999, and
the addition of notebook computers and servers to the build-to-order product
line in the third and fourth quarters of fiscal 1999, respectively, involve
significant additional risks, including without limitation failure to achieve
customer acceptance of the new products, substantial dependence on third parties
for quality and reliability of component parts, and the Company's ability to
fulfill customer orders timely. Additionally, the Company's acquisition of
Computer City in the first quarter of fiscal 1999 involves certain risks and
uncertainties, including without limitation the ability of the Company to
operate the acquired stores profitably, to dispose of inventories and other
assets, as well as future lease commitments, related to Computer City stores
closed, and to retain Computer City's retail and corporate customers. The
Company's focus on its Internet business through CompUSA Net.com involves
significant additional risks, including without limitation failure to achieve
customer acceptance and potential significant capital investments that may be
required to be made by the Company.
 
    All of the foregoing risks and uncertainties are beyond the ability of the
Company to control, and in many cases, the Company cannot predict the risks and
uncertainties that could cause its actual results to differ materially from
those indicated by the forward-looking statements. When used in this Quarterly
Report on Form 10-Q, the words "believes," "estimates," "plans," "expects,"
"anticipates," and similar expressions as they relate to the Company or its
management are intended to identify forward-looking statements.
 
ACQUISITION OF COMPUTER CITY
 
    On August 31, 1998, the Company completed its acquisition of Computer City
from Tandy Corporation ("Tandy") for an aggregate purchase price of
approximately $175 million, subject to certain post-closing adjustments. See
"--Liquidity and Capital Resources." The Company expects to finalize the
calculation of the purchase price due Tandy in connection with the acquisition
of Computer City in the fourth quarter of fiscal 1999. The acquisition was
accounted for under the purchase accounting method.
 
    The Company is operating 37 Computer City stores in the United States as
CompUSA Computer Superstores(SM) and two former Computer City "small market"
stores. Such stores were converted to the CompUSA information systems in
September and October 1998. The Company has initiated certain activities to
reconfigure these stores to the CompUSA format and expects such activities to be
completed over a period of time in fiscal 1999 and fiscal 2000. The Company
identified 55 Computer City stores in the United States for closure. Inventory
liquidation sales were conducted at the majority of such stores through
mid-October, at which time the stores were closed and the remaining merchandise
inventories were transferred to other CompUSA Computer Superstores, including
former Computer City stores, for final liquidation. Effective November 1, 1998,
the Company sold the seven Canadian Computer City supercenters acquired by the
Company to Future Shop Ltd. for approximately $9.6 million in cash and the
assumption of certain liabilities, subject to post-closing adjustments. In the
fourth quarter of fiscal 1999,
 
                                       13
<PAGE>
the Company paid approximately $2.4 million to Future Shop Ltd. to effect a
reduction in the purchase price due the Company after the finalization of such
post-closing adjustments.
 
    The 55 Computer City stores that the Company closed were generally in closer
proximity to, and therefore the Company believes would have been more directly
competitive with, existing CompUSA Computer Superstores than the 37 Computer
City stores in the United States that have remained open as CompUSA Computer
Superstores. Of the 37 stores acquired from Computer City that have remained
open as CompUSA Computer Superstores, 29 are located in metropolitan areas in
which there are existing CompUSA Computer Superstores. The Company believes its
decision to continue to operate these 29 stores is consistent with its strategy
of opening additional Computer Superstores in existing markets to increase
market penetration and to provide customers with more convenience and better
service. However, the continued operation of these 29 stores may cause the rate
of comparable store sales growth for the CompUSA Computer Superstores already in
operation in such metropolitan areas to be lower than it would have been if
these 29 Computer City stores had been closed due to the transfer of sales from
existing CompUSA Computer Superstores to the former Computer City stores.
 
COMPUSA NET.COM
 
    Effective March 28, 1999, the Company completed the formation of its wholly-
owned subsidiary, CompUSA Net.com Inc. ("CompUSA Net.com"), by contributing to
it the net assets of CompUSA Direct. CompUSA Net.com offers desktop and notebook
computers, software, printers, scanners, accessories, and other electronic and
digital products via the Internet. Beginning in the fourth quarter of fiscal
1999, the mail order and other sales operations previously conducted by CompUSA
Direct will be phased out or transferred to the Company.
 
RECENT DEVELOPMENTS
 
    As a result of its recent operating performance and the competitive
environment in which it operates, the Company has initiated a program to review
its core businesses to ensure that each is achieving desired levels of
efficiency, effectiveness, and profitability. Upon finalization of this review,
the Company could decide to exit certain lines of business or to close certain
of the Company's Computer Superstores or other operating facilities in the event
the Company were to conclude that such actions are in the long-term strategic
interest of the Company.
 
GENERAL
 
    All references herein to "fiscal 1999" relate to the fifty-two weeks ending
June 26, 1999, and references to "fiscal 1998" relate to the fifty-two weeks
ended June 27, 1998. In addition, all references herein to "third quarter of
fiscal 1999" and "first nine months of fiscal 1999" relate to the thirteen weeks
and thirty-nine weeks, respectively, ended March 27, 1999, and all references to
"third quarter of fiscal 1998" and "first nine months of fiscal 1998" relate to
the thirteen weeks and thirty-nine weeks, respectively, ended March 28, 1998.
 
                                       14
<PAGE>
    The following table sets forth certain items expressed as a percentage of
net sales for the periods indicated:
 
<TABLE>
<CAPTION>
                                                                                       THIRTY-NINE
                                                         THIRTEEN WEEKS ENDED          WEEKS ENDED
                                                       ------------------------  ------------------------
                                                        MARCH 27,    MARCH 28,    MARCH 27,    MARCH 28,
                                                          1999         1998         1999         1998
                                                       -----------  -----------  -----------  -----------
<S>                                                    <C>          <C>          <C>          <C>
Net sales............................................       100.0%       100.0%       100.0%       100.0%
Cost of sales and occupancy costs....................        87.2         85.9         86.6         85.5
                                                            -----        -----        -----        -----
Gross profit.........................................        12.8         14.1         13.4         14.5
Operating expenses...................................        10.0          9.2         10.0          9.0
Pre-opening expenses.................................          --          0.1           --          0.1
General and administrative expenses..................         3.0          1.9          2.5          2.0
                                                            -----        -----        -----        -----
Operating (loss) income..............................        (0.2)         2.9          0.9          3.4
Interest expense and other income, net...............         0.3          0.1          0.3          0.1
                                                            -----        -----        -----        -----
(Loss) income before income taxes....................        (0.5)         2.8          0.6          3.3
Income tax (benefit) expense.........................        (0.2)         1.0          0.2          1.3
                                                            -----        -----        -----        -----
Net (loss) income....................................        (0.3)%        1.8%         0.4%         2.0%
                                                            -----        -----        -----        -----
                                                            -----        -----        -----        -----
</TABLE>
 
    The following table sets forth certain sales data for the Company:
 
<TABLE>
<CAPTION>
                                                                         THIRTY-NINE WEEKS
                                                THIRTEEN WEEKS ENDED           ENDED
                                               ----------------------  ----------------------
                                               MARCH 27,   MARCH 28,   MARCH 27,   MARCH 28,
                                                  1999        1998        1999        1998
                                               ----------  ----------  ----------  ----------
<S>                                            <C>         <C>         <C>         <C>
Product sales................................  $1,556,834  $1,341,256  $4,460,663  $3,793,676
 
Service sales:
  Technical services sales...................      35,882      28,326     103,240      70,806
  Training sales.............................      30,384      24,423      83,586      67,533
                                               ----------  ----------  ----------  ----------
                                                   66,266      52,749     186,826     138,339
 
Sales of CompUSA Direct......................      68,250      57,814     212,375     168,341
                                               ----------  ----------  ----------  ----------
 
Total net sales..............................  $1,691,350  $1,451,819  $4,859,864  $4,100,356
                                               ----------  ----------  ----------  ----------
                                               ----------  ----------  ----------  ----------
</TABLE>
 
                                       15
<PAGE>
    The following table sets forth certain operating data for the Company:
 
<TABLE>
<CAPTION>
                                                                                       THIRTY-NINE
                                                         THIRTEEN WEEKS ENDED          WEEKS ENDED
                                                       ------------------------  ------------------------
                                                        MARCH 27,    MARCH 28,    MARCH 27,    MARCH 28,
                                                          1999         1998         1999         1998
                                                       -----------  -----------  -----------  -----------
<S>                                                    <C>          <C>          <C>          <C>
Stores open at end of period.........................         209          150          209          150
Computer City stores acquired during the period(1)...          --           --           37           --
Stores opened during the period......................           1            2           12           21
Stores closed during the period(2)...................           2           --            2           --
Stores relocated during the period...................          --           --            4            2
Average net sales per gross square foot(3):
  CompUSA stores.....................................   $     304    $     341    $     914    $   1,021
  Former Computer City stores(4).....................   $     236          N/A    $     500          N/A
  Total stores.......................................   $     294    $     341    $     884    $   1,021
Average net sales per Computer Superstore:
  CompUSA stores.....................................   $   8,325    $   9,329    $  25,102    $  27,847
  Former Computer City stores(4).....................   $   4,904          N/A    $  12,625          N/A
  Total stores.......................................   $   7,719    $   9,329    $  23,419    $  27,847
Comparable store sales (decrease) increase(5)........        (7.2)%        1.2%        (4.7)%        5.2%
</TABLE>
 
------------------------
 
(1) As of August 31, 1998, the Company acquired 37 Computer City stores that the
    Company is operating as CompUSA Computer Superstores.
 
(2) Two CompUSA Computer Superstores were closed in the third quarter of fiscal
    1999 in markets where a former Computer City store in close proximity to a
    CompUSA Computer Superstore remained open.
 
(3) Calculated using net sales divided by gross square footage of Computer
    Superstores open at the end of the period, weighted by the number of months
    open during the period. For purposes of calculating average net sales per
    gross square foot, net sales are comprised of net sales generated from the
    Company's Computer Superstores as well as the Company's national accounts
    group, but exclude sales of CompUSA Direct.
 
(4) Average net sales per gross square foot and average net sales per store for
    the former Computer City stores have been calculated for the period from the
    acquisition date of August 31, 1998 to March 27, 1999.
 
(5) Comparable store sales are net sales for the Computer Superstores open the
    same number of months in both the indicated and previous period, including
    stores that were relocated or expanded during either period. For purposes of
    calculating the change in comparable store sales, net sales are comprised of
    net sales generated from the Company's Computer Superstores, as well as the
    Company's national accounts group, but exclude sales of CompUSA Direct. The
    sales of the 37 former Computer City stores are not included in the
    calculation of the change in comparable store sales for the thirteen and
    thirty-nine weeks ended March 27, 1999.
 
RESULTS OF OPERATIONS
 
    As a result of the expansion of the Company's store base, period-to-period
comparisons of financial results may not be meaningful and the results of
operations for historical periods may not be indicative of the results to be
expected in future periods. In addition, the Company expects that its quarterly
results of operations will fluctuate depending on the timing of the opening of,
and the amount of net sales contributed by, new stores and the timing of costs
associated with the selection, leasing, construction, and opening of new stores,
as well as seasonal factors, product introductions, and changes in product mix.
See "--Quarterly Data and Seasonality."
 
                                       16
<PAGE>
    The results of operations of the Company for the third quarter and first
nine months of fiscal 1999 include the results of operations from the
acquisition date of the 37 Computer City stores that the Company is operating as
CompUSA Computer Superstores and two former Computer City "small market" stores.
The results of operations for the third quarter and first nine months of fiscal
1999 exclude the operating results of the 55 Computer City stores in the United
States closed by the Company and the seven Canadian Computer City supercenters
sold by the Company.
 
THIRD QUARTER ENDED MARCH 27, 1999, COMPARED WITH THE THIRD QUARTER ENDED MARCH
  28, 1998
 
    NET SALES--Net sales for the third quarter of fiscal 1999 increased 16.5% to
$1.69 billion from $1.45 billion for the third quarter of fiscal 1998. The
increase in net sales was due to sales of approximately $154.1 million
attributable to the new stores opened subsequent to the third quarter of fiscal
1998 and sales of approximately $180.2 million generated by the former Computer
City stores, partially offset by a decline in comparable store sales. In
addition, sales at CompUSA Direct increased approximately 18% in the third
quarter of fiscal 1999 compared with the third quarter of fiscal 1998.
 
    Despite an increase in overall sales and the number of personal computer
systems sold in the third quarter of fiscal 1999, average net sales per store
for the third quarter of fiscal 1999 decreased approximately 17% from the third
quarter of fiscal 1998. The Company believes average net sales per store were
negatively impacted by, among other things, declines in average selling prices
for certain of the Company's products, including desktop and notebook computers
and monitors and lower sales per store by the 37 former Computer City stores.
 
    Comparable store sales by the CompUSA Computer Superstores decreased 7.2%
from the third quarter of fiscal 1998. The sales of the 37 former Computer City
stores are not included in the calculation of the change in comparable store
sales for the third quarter of fiscal 1999. The Company believes comparable
store sales were negatively impacted by, among other things, declines in average
selling prices. The Company also believes the change in comparable store sales
was negatively impacted by a decline in sales of the CompUSA Computer
Superstores during the third quarter of fiscal 1999 as a result of the transfer
of sales from existing CompUSA Computer Superstores to former Computer City
stores. Of the 37 former Computer City stores that the Company continues to
operate as CompUSA Computer Superstores, 29 are located in metropolitan areas in
which there are existing CompUSA Computer Superstores. The Company believes the
increased number of CompUSA Computer Superstores in the markets previously
served by both CompUSA Computer Superstores and Computer City stores has
resulted in reductions in the comparable store sales growth in the Company's
existing CompUSA Computer Superstores in those markets.
 
    While the Company believes the opening of additional Computer Superstores in
existing markets, as well as the acquisition of 29 Computer City stores in
existing markets, has resulted in some reductions in the rate of comparable
store sales growth, CompUSA has historically opened additional stores in
existing markets largely to increase market penetration and to provide customers
with more convenience and better service, to increase its awareness with local
consumers, to enhance its competitive position in such markets, and to create
efficiencies in advertising and management. Management plans to continue its
strategy of opening additional Computer Superstores in existing markets since it
believes such strategy is in the Company's long-term best interest.
 
    GROSS PROFIT--Gross profit was $216.5 million, or 12.8% of net sales, in the
third quarter of fiscal 1999, compared with $205.2 million, or 14.1% of net
sales, in the third quarter of fiscal 1998. The decline in gross profit as a
percentage of net sales in the third quarter of fiscal 1999 compared with the
third quarter of fiscal 1998 was primarily due to increases in the following
costs as percentages of net sales: (1) product costs, (2) controllable costs,
such as freight and shrink, and (3) occupancy costs.
 
    In the third quarter of fiscal 1999, product costs increased as a percentage
of net sales by approximately 0.72% compared with the third quarter of fiscal
1998. The increase in product costs as a percentage
 
                                       17
<PAGE>
of net sales was primarily the result of aggressive pricing actions in the third
quarter in reaction to lower than anticipated demand in general and lower
margins realized on direct sales to corporate customers.
 
    In the third quarter of fiscal 1999, freight and shrink expenses increased
approximately 0.40% as a percentage of net sales compared with the third quarter
of fiscal 1998. Freight expense, which is generally a fixed cost based on the
number of units sold, increased as a percentage of net sales primarily due to
the decline in average selling prices. The increase in shrink expense as a
percentage of net sales is primarily attributable to higher expenses as a
percentage of net sales incurred in the operation of the former Computer City
stores.
 
    Occupancy costs increased approximately 0.48% as a percentage of net sales
in the third quarter of fiscal 1999 compared with the third quarter of fiscal
1998. Occupancy costs, which are generally fixed in nature, increased as a
percentage of net sales in the third quarter of fiscal 1999 primarily as a
result of lower average net sales per store compared with the third quarter of
fiscal 1998, particularly at the former Computer City stores.
 
    OPERATING EXPENSES--Operating expenses were $168.6 million, or 10.0% of net
sales, in the third quarter of fiscal 1999, compared with $134.2 million, or
9.2% of net sales, in the third quarter of fiscal 1998. The increase in
operating expenses as a percentage of net sales for the third quarter of fiscal
1999 compared with the third quarter of fiscal 1998 was primarily due to
increases in personnel, facility, and certain selling expenses as percentages of
net sales, partially offset by a decrease in advertising expense as a percentage
of net sales.
 
    Excluding personnel costs incurred in connection with the conversion of the
former Computer City stores, personnel expenses in the third quarter of fiscal
1999 increased as a percentage of net sales by approximately 0.62%. Personnel
costs increased as a percentage of net sales primarily as a result of lower
average net sales per store. In addition, personnel expenses represented a
higher percentage of net sales of the former Computer City stores compared with
the CompUSA Computer Superstores due to the lower net sales of the former
Computer City stores.
 
    Facility expenses increased by approximately 0.25% as a percentage of net
sales in the third quarter of fiscal 1999 compared with the third quarter of
fiscal 1998. Facility expenses, which are generally fixed in nature, increased
as a percentage of net sales primarily as a result of lower average net sales
per store.
 
    The increase in operating expenses in the third quarter of fiscal 1999
compared with the third quarter of fiscal 1998 was also due to an increase in
credit card discount fees and bad debt expenses. Such expenses increased by
approximately 0.22% as a percentage of net sales in the third quarter of fiscal
1999 compared with the third quarter of fiscal 1998.
 
    The Company incurred costs of approximately $488,000 in the third quarter of
fiscal 1999 related to the training of personnel at the former Computer City
stores and other costs necessary to convert the former Computer City stores to
CompUSA Computer Superstores.
 
    The increases described above were partially offset by lower net advertising
expense as a percentage of net sales. Net advertising expense decreased by
approximately 0.39% as a percentage of net sales in the third quarter of fiscal
1999 due to increased vendor participation and advertising economies-of-scale
related to the addition of stores in multi-store markets, primarily as a result
of the acquisition of the Computer City stores.
 
    PRE-OPENING EXPENSES--Pre-opening expenses consist primarily of personnel
expenses incurred prior to a store's opening and promotional costs associated
with the opening. The Company's policy is to expense all pre-opening expenses as
incurred. In the third quarter of fiscal 1999, the Company incurred $392,000 in
pre-opening expenses, compared with $513,000 in pre-opening expenses incurred in
the third quarter of fiscal 1998.
 
    GENERAL AND ADMINISTRATIVE EXPENSES--General and administrative expenses
were $50.2 million, or 3.0% of net sales, in the third quarter of fiscal 1999,
compared with $27.9 million, or 1.9% of net sales, in
 
                                       18
<PAGE>
the third quarter of fiscal 1998. The increase in general and administrative
expenses as a percentage of net sales was primarily due to the following: (1) an
increase in personnel expenses as a percentage of net sales, (2) costs incurred
in the third quarter of fiscal 1999 related to the Company's information
technology initiatives and the formation of CompUSA Net.com, and (3) transition
costs and amortization expense related to the Computer City acquisition.
 
    Excluding personnel costs incurred in connection with the Company's
information technology initiatives and the conversion of the former Computer
City stores, personnel expenses in the third quarter of fiscal 1999 increased as
a percentage of net sales by approximately 0.47%. This increase in personnel
expenses as a percentage of net sales is primarily attributable to lower average
net sales per store and lower sales per store by the 37 former Computer City
stores.
 
    In the third quarter of fiscal 1999, the Company incurred expenses of
approximately $3.9 million related to the Company's information technology
initiatives and the formation of CompUSA Net.com.
 
    The Company also incurred costs of approximately $1.3 million in the third
quarter of fiscal 1999 to support the training of personnel at the former
Computer City stores and other costs necessary to convert the former Computer
City stores to CompUSA Computer Superstores. In addition, the Company recorded
approximately $1.8 million of amortization expense in the third quarter of
fiscal 1999 related to the goodwill associated with the acquisition of Computer
City.
 
    INTEREST EXPENSE AND OTHER INCOME, NET--Interest expense and other income,
net, was $5.4 million, or 0.3% of net sales, in the third quarter of fiscal
1999, compared with $1.3 million, or 0.1% of net sales, in the third quarter of
fiscal 1998. The increase in interest expense and other income, net, was
primarily due to interest expense on the $136 million note payable to Tandy
related to the acquisition of Computer City. See "--Liquidity and Capital
Resources."
 
    INCOME TAXES--The Company's effective tax rate was approximately 38.5% for
both the third quarter of fiscal 1999 and the third quarter of fiscal 1998.
 
    NET LOSS--As a result of the above, the net loss for the third quarter of
fiscal 1999 was $4.9 million, or $.05 per diluted share, compared with net
income of $25.4 million, or $.27 per diluted share, for the third quarter of
fiscal 1998.
 
NINE MONTHS ENDED MARCH 27, 1999, COMPARED WITH THE NINE MONTHS ENDED MARCH 28,
  1998
 
    NET SALES--Net sales for the first nine months of fiscal 1999 increased
18.5% to $4.86 billion from $4.10 billion for the first nine months of fiscal
1998. The increase in net sales was due to sales of approximately $521.4 million
attributable to the new stores opened subsequent to the third quarter of fiscal
1998 and sales of approximately $383.8 million generated by the former Computer
City stores subsequent to their acquisition partially offset by a decline in
comparable store sales. In addition, sales at CompUSA Direct increased
approximately 26% during the first nine months of fiscal 1999 compared with the
first nine months of fiscal 1998.
 
    Despite the increases in overall sales and the number of personal computer
systems sold in the first nine months of fiscal 1999, average net sales per
store for the first nine months of fiscal 1999 decreased approximately 16% from
the first nine months of fiscal 1998. The Company believes average net sales per
store were negatively impacted by, among other things, declines in average
selling prices, an increase in sales of lower-end computer systems as a
percentage of total computer systems sold, and lower sales per store by the 37
former Computer City stores.
 
    Comparable store sales by the CompUSA Computer Superstores decreased 4.7%
from the first nine months of fiscal 1998. The sales of the 37 former Computer
City stores are not included in the calculation of the change in comparable
store sales for the first nine months of fiscal 1999. The Company believes
comparable store sales were negatively impacted by, among other things, declines
in average selling prices for certain of the Company's products, including
desktop and notebook computers and monitors, and increased sales of lower-end
computer systems as a percentage of total computer systems sold. The
 
                                       19
<PAGE>
Company also believes the change in comparable store sales was negatively
impacted by a decline in sales of the CompUSA Computer Superstores during the
first nine months of fiscal 1999 as a result of (i) the transfer of sales from
existing CompUSA Computer Superstores to the 29 former Computer City stores
located in metropolitan areas in which there are existing CompUSA Computer
Superstores, (ii) inventory liquidation sales conducted at the Computer City
stores closed by the Company in September and October 1998, and (iii)
promotional sales activities conducted in the former Computer City stores in the
second quarter of fiscal 1999.
 
    GROSS PROFIT--Gross profit was $652.6 million, or 13.4% of net sales, in the
first nine months of fiscal 1999, compared with $595.5 million, or 14.5% of net
sales, in the first nine months of fiscal 1998. The decline in gross profit as a
percentage of net sales in the first nine months of fiscal 1999 compared with
the first nine months of fiscal 1998 was primarily due to increases in the
following costs as percentages of net sales: (1) product costs, (2) controllable
costs, such as freight and shrink, and (3) occupancy costs.
 
    In the first nine months of fiscal 1999, product costs increased as a
percentage of net sales by approximately 0.41% compared with the first nine
months of fiscal 1998. The increase in product costs as a percentage of net
sales was due to lower average selling prices in general as well as promotional
sales activities. The Company conducted promotional sales activities in the
former Computer City stores as well as seasonal promotions in the second quarter
of fiscal 1999. In addition, the Company took aggressive pricing actions in the
third quarter of fiscal 1999 in reaction to lower than anticipated demand.
 
    Gross profit also decreased in the first nine months of fiscal 1999 due to
an increase in freight and shrink expenses by approximately 0.26% as a
percentage of net sales compared with the first nine months of fiscal 1998.
Freight expense, which is generally a fixed cost based on the number of units
sold, increased as a percentage of net sales due to the decline in average
selling prices. In addition, freight expense increased as a percentage of net
sales due to the increased use of expedited freight in the second quarter of
fiscal 1999 in order to ensure the timely receipt of merchandise inventories in
the Company's Computer Superstores. The increase in shrink expense is primarily
attributable to higher expenses as a percentage of net sales incurred in the
operation of the former Computer City stores.
 
    Occupancy costs increased by approximately 0.44% as a percentage of net
sales in the first nine months of fiscal 1999 compared with the first nine
months of fiscal 1998. Occupancy costs, which are generally fixed in nature,
increased as a percentage of net sales in the first nine months of fiscal 1999
primarily as a result of lower average net sales per store compared with the
first nine months of fiscal 1998, particularly at the former Computer City
stores.
 
    OPERATING EXPENSES--Operating expenses were $485.3 million, or 10.0% of net
sales, in the first nine months of fiscal 1999, compared with $369.1 million, or
9.0% of net sales, in the first nine months of fiscal 1998. The increase in
operating expenses as a percentage of net sales for the first nine months of
fiscal 1999 compared with the first nine months of fiscal 1998 was due to the
following: (1) increases in personnel, facility, and certain selling expenses as
percentages of net sales, (2) costs incurred to support the conversion of the
former Computer City stores to CompUSA Computer Superstores, and (3) a $2.4
million charge recorded in the first quarter of fiscal 1999 for the anticipated
closure of three CompUSA Computer Superstores. These increases were partially
offset by a decrease in advertising expense as a percentage of net sales.
 
    Excluding personnel costs incurred in connection with the conversion of the
former Computer City stores, personnel expenses in the first nine months of
fiscal 1999 increased as a percentage of net sales by approximately 0.63%.
Personnel costs increased as a percentage of net sales primarily as a result of
lower average net sales per store. In addition, personnel expenses represented a
higher percentage of net sales of the former Computer City stores compared with
the CompUSA Computer Superstores due to the lower net sales of the former
Computer City stores.
 
    Facility expenses increased by approximately 0.23% as a percentage of net
sales in the first nine months of fiscal 1999 compared with the first nine
months of fiscal 1998. Facility expenses, which are
 
                                       20
<PAGE>
generally fixed in nature, increased as a percentage of net sales in the first
nine months of fiscal 1999, primarily as a result of lower average net sales per
store.
 
    The increase in operating expenses for the first nine months of fiscal 1999
compared with the first nine months of fiscal 1998 was also due to an increase
in credit card discount fees and bad debt expenses. Such costs increased by
approximately 0.15% as a percentage of net sales in the first nine months of
fiscal 1999 compared with the first nine months of fiscal 1998.
 
    The Company incurred costs of approximately $3.2 million in the first nine
months of fiscal 1999 related to the training of personnel at the former
Computer City stores and other costs necessary to convert the former Computer
City stores to CompUSA Computer Superstores.
 
    In the first quarter of fiscal 1999, the Company recorded a $2.4 million
charge for the anticipated closure of three CompUSA Computer Superstores in
markets where a former Computer City store in close proximity to a CompUSA
Computer Superstore remained open. As of the end of the third quarter of fiscal
1999, the Company has closed two such CompUSA Computer Superstores.
 
    The above increases were partially offset by lower net advertising expense
as a percentage of net sales. Net advertising expense decreased by approximately
0.21% as a percentage of net sales in the first nine months of fiscal 1999 due
to increased vendor participation and advertising economies-of-scale related to
the addition of stores in multi-store markets, primarily as a result of the
acquisition of the Computer City stores. This decrease in net advertising
expense was partially offset by advertising expenses related to promotional
sales activities conducted in the former Computer City stores in the second
quarter of fiscal 1999.
 
    PRE-OPENING EXPENSES--Pre-opening expenses consist primarily of personnel
expenses incurred prior to a store's opening and promotional costs associated
with the opening. The Company's policy is to expense all pre-opening expenses as
incurred. In the first nine months of fiscal 1999, the Company incurred $3.9
million in pre-opening expenses in connection with the opening of 12 Computer
Superstores and the relocation of four Computer Superstores, compared with $6.0
million in pre-opening expenses incurred in the first nine months of fiscal 1998
in connection with the opening of 21 Computer Superstores and the relocation of
two Computer Superstores.
 
    GENERAL AND ADMINISTRATIVE EXPENSES--General and administrative expenses
were $121.2 million, or 2.5% of net sales, in the first nine months of fiscal
1999, compared with $82.3 million, or 2.0% of net sales, in the first nine
months of fiscal 1998. The increase in general and administrative expenses as a
percentage of net sales was primarily due to the following: (1) increased
personnel and facility expenses as percentages of net sales, (2) costs incurred
in the third quarter of fiscal 1999 related to the Company's information
technology initiatives and the formation of CompUSA Net.com, and (3) costs
incurred in the first nine months of fiscal 1999 related to the conversion of
the former Computer City stores to CompUSA Computer Superstores.
 
    Excluding personnel costs incurred in connection with the Company's
information technology initiatives and the conversion of the former Computer
City stores, personnel expenses in the first nine months of fiscal 1999
increased as a percentage of net sales by approximately 0.16%. This increase in
personnel expenses as a percentage of net sales is primarily attributable to
lower average net sales per store and lower sales per store by the 37 former
Computer City stores. This increase was partially offset by lower incentive
compensation expense.
 
    Facility expenses increased by approximately 0.09% as a percentage of net
sales in the first nine months of fiscal 1999 compared with the first nine
months of fiscal 1998. Facility expenses, which are generally fixed in nature,
increased as a percentage of net sales in the first nine months of fiscal 1999
primarily as a result of lower average net sales per store. In addition,
facility expenses increased in the first nine months of fiscal 1999 as a result
of the expansion of the Company's corporate facilities.
 
    In the third quarter of fiscal 1999, the Company incurred expenses of
approximately $3.9 million related to the Company's information technology
initiatives and the formation of CompUSA Net.com.
 
                                       21
<PAGE>
    The Company incurred costs of approximately $3.3 million in the first nine
months of fiscal 1999 to support the training of personnel at the former
Computer City stores and other costs necessary to convert the former Computer
City stores to CompUSA Computer Superstores. In addition, the Company recorded
approximately $3.1 million of amortization expense in the first nine months of
fiscal 1999 related to the goodwill associated with the acquisition of Computer
City.
 
    INTEREST EXPENSE AND OTHER INCOME, NET--Interest expense and other income,
net, was $11.7 million, or 0.3% of net sales, in the first nine months of fiscal
1999, compared with $3.3 million, or 0.1% of net sales, in the first nine months
of fiscal 1998. The increase in interest expense and other income, net, was
primarily due to interest expense on the $136 million note payable to Tandy
related to the acquisition of Computer City. See "--Liquidity and Capital
Resources."
 
    INCOME TAXES--The Company's effective tax rate was 38.5% for both the first
nine months of fiscal 1999 and the first nine months of fiscal 1998.
 
    NET INCOME--As a result of the above, net income for the first nine months
of fiscal 1999 was $18.8 million, or $.20 per diluted share, compared with net
income of $83.0 million, or $.87 per diluted share, for the first nine months of
fiscal 1998.
 
QUARTERLY DATA AND SEASONALITY
 
    The Company expects that its quarterly results of operations will fluctuate
depending on the timing of the opening of, and the amount of net sales
contributed by, new stores and the timing of costs associated with the
selection, leasing, construction, and opening of new stores, as well as seasonal
factors, product introductions, and changes in product mix.
 
    Based upon its past operating history, the Company believes that its
business is seasonal. Excluding the effects of new store openings, net sales and
earnings are generally lower during the first and fourth fiscal quarters than in
the second and third fiscal quarters.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    At March 27, 1999, total assets were $1.69 billion, $1.34 billion of which
were current assets, including $242 million of cash and cash equivalents. Net
cash provided by operating activities for the first nine months of fiscal 1999
was $169 million, which was primarily attributable to net income for the first
nine months of fiscal 1999 and an increase in accounts payable, partially offset
by an increase in inventory.
 
    Approximately three-fourths of the Company's net sales during the first nine
months of both fiscal 1999 and fiscal 1998 were sales for which the Company
received payment at the time of sale either in cash, by check, or by third-party
credit card. The remaining net sales were primarily sales for which the Company
provided credit terms to corporate, government, and education customers.
 
    Merchandise inventories increased to $803 million at March 27, 1999, from
$521 million at June 27, 1998. The increase in merchandise inventories is
primarily attributable to inventories at the 12 Computer Superstores opened in
the first nine months of fiscal 1999 and the 37 former Computer City stores and
higher inventories held at the Company's configuration center. At March 27,
1999, inventory per store was approximately $3.6 million, compared with
approximately $4.0 million at March 28, 1998.
 
                                       22
<PAGE>
    Capital expenditures during the first nine months of fiscal 1999 were $54.1
million, compared with $91.5 million of capital expenditures during the first
nine months of fiscal 1998. The following table sets forth the capital
expenditures for the first nine months of fiscal 1999 and fiscal 1998:
 
<TABLE>
<CAPTION>
                                                                                   FOR THE
                                                                           THIRTY-NINE WEEKS ENDED
                                                                           ------------------------
                                                                            MARCH 27,    MARCH 28,
                                                                              1999         1998
                                                                           -----------  -----------
                                                                                (IN THOUSANDS)
<S>                                                                        <C>          <C>
New stores...............................................................   $   7,013    $  21,735
Existing stores..........................................................      12,538       19,061
Computer City store conversions..........................................      10,248           --
Information technology initiatives.......................................      12,552       24,696
Corporate and other......................................................      11,703       25,963
                                                                           -----------  -----------
Total capital expenditures...............................................   $  54,054    $  91,455
                                                                           -----------  -----------
                                                                           -----------  -----------
</TABLE>
 
    The Company plans to open 14 Computer Superstores in fiscal 1999, 12 of
which had opened as of March 27, 1999, and approximately 10 Computer Superstores
in fiscal 2000. Excluding the effects of new store openings, the Company's
greatest short-term capital requirements occur during the second fiscal quarter
to support a higher level of sales in that quarter. Short-term capital
requirements are satisfied primarily by available cash and cash equivalents and
vendor and bank financing.
 
    Effective March 27, 1999, the Company executed an amendment to its credit
agreement with a consortium of banks that expires in March 2001 to provide a
$230 million credit facility under which borrowings are secured by the Company's
accounts receivable and all equity interests in the Company's subsidiaries (the
"Credit Agreement"). The Credit Agreement requires that the Company maintain
certain financial ratios and a minimum net worth. The Company's ability to incur
borrowings under the Credit Agreement is reduced by outstanding letters of
credit and, in certain circumstances, is further reduced based upon the amount
of the Company's eligible accounts receivable and the financial covenants
contained in the Credit Agreement. Under the terms of the Credit Agreement, as
of March 27, 1999, the Company had approximately $65 million available for
future borrowings under the Credit Agreement.
 
    The Company also finances certain fixture and equipment acquisitions through
equipment lessors. Lease financing is available from numerous sources and the
Company evaluates equipment leasing as a supplemental source of financing on a
continuing basis.
 
    In connection with the acquisition of Computer City, the Company issued a
$136 million subordinated promissory note payable to Tandy (the "Seller Note").
The Seller Note bears interest at a rate of 9.48% per annum and provides for its
repayment in semi-annual installments over a period of ten years. The first
three years of payments are interest only, with the first principal payment due
in December 2001. The Seller Note ranks pari passu with the Senior Subordinated
Notes. The unpaid principal amount of the Seller Note may be prepaid, in whole
or in part, at any time at the option of the Company, without premium or
penalty.
 
    The Company is currently completing the business plan and evaluating the
capital requirements of CompUSA Net.com. The Company currently plans to explore
strategic partnerships and/or access the capital markets over the next six to
nine months to fund the growth of CompUSA Net.com. There can be no assurance
that such strategic partnerships can be effected and/or such funding can be
accomplished through the capital markets, on terms acceptable to the Company.
 
    The Company believes that its available cash and cash equivalents, funds
generated by operations, currently available vendor and floor plan financing,
lease financing, and funds available under the Credit Agreement should be
sufficient through the end of fiscal 1999 to finance its continuing operations
and expansion plans and to make all required payments of interest on the Senior
Subordinated Notes and the
 
                                       23
<PAGE>
Seller Note. The level of future expansion of both the Company and CompUSA
Net.com will be contingent upon the availability of additional capital.
 
INFLATION
 
    While inflation has not had, and the Company does not expect it to have, a
material impact upon operating results, there can be no assurances that the
Company's business will not be affected by inflation in the future.
 
NEW PRONOUNCEMENTS
 
    In June 1997, the Financial Accounting Standards Board (the "FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting
Comprehensive Income," and SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information," which are effective for fiscal years
beginning after December 15, 1997. The adoption of the disclosure requirements
of SFAS No. 130 in the preparation of the Quarterly Report on Form 10-Q for the
thirteen weeks ended September 26, 1998 had no impact on the Company's financial
statements. The Company will adopt the annual disclosure requirements of SFAS
No. 131 in the preparation of its Annual Report on Form 10-K for the fiscal year
ending June 26, 1999, while the quarterly disclosure requirements will be
adopted in fiscal year 2000. The American Institute of Certified Public
Accountants (the "AICPA") issued Statement of Position ("SOP") 98-1, "Accounting
for Costs of Computer Software Developed or Obtained for Internal Use," which is
effective for fiscal years beginning after December 15, 1998. The Company's
current policy falls within the guidelines of SOP 98-1. Also, the AICPA issued
SOP 98-5, "Reporting on the Costs of Start-Up Activities," which is effective
for fiscal years beginning after December 15, 1998. The Company adopted the
provisions of SOP 98-5 in the preparation of the Quarterly Report on Form 10-Q
for the thirteen weeks ended September 26, 1998. The adoption of SOP 98-5 had no
material impact on the Company's financial statements.
 
YEAR 2000 ISSUE
 
    The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Computer equipment
and software and devices with embedded technology that are time-sensitive may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could result in a system failure or miscalculations causing disruptions of
operations, including, among other things, a temporary inability to process
transactions, send invoices, or engage in similar normal business activities.
 
    The Company has undertaken various initiatives intended to ensure that its
computer equipment and software will function properly with respect to dates in
the year 2000 and thereafter. For this purpose, the term "computer equipment and
software" includes systems that are commonly thought of as information
technology ("IT") systems, including accounting, data processing, and
telephone/PBX systems, cash registers, hand-held terminals, scanning equipment,
and other miscellaneous systems, as well as systems that are not commonly
thought of as IT systems, such as alarm systems, sprinkler systems, fax
machines, or other miscellaneous systems. Both IT and non-IT systems may contain
imbedded technology, which complicates the Company's Year 2000 identification,
assessment, remediation, and testing efforts. Based upon its identification and
assessment efforts to date, the Company believes that certain of the computer
equipment and software it currently uses will require replacement or
modification. In addition, in the ordinary course of replacing computer
equipment and software, the Company attempts to obtain replacements that it
believes are Year 2000 compliant. Utilizing both internal and external resources
to identify and assess needed Year 2000 remediation, the Company currently
anticipates that its Year 2000 identification, assessment, remediation, and
testing efforts, which began in October 1996, will be completed by October 31,
1999, and that such efforts will be completed prior to any currently anticipated
impact on its computer equipment and software. The Company estimates that as of
March 27, 1999, it had completed approximately 65% of the initiatives that it
believes will be necessary to fully address potential Year 2000
 
                                       24
<PAGE>
issues relating to its computer equipment and software. The projects comprising
the remaining 35% of the initiatives are in process and expected to be completed
by October 31, 1999. As non-IT system issues are identified and assessed,
remediation and testing of the non-IT system issues will be ongoing through
December 31, 1999.
 
<TABLE>
<CAPTION>
                                                                            TIME       PERCENT
YEAR 2000 INITIATIVE                                                        FRAME     COMPLETE
------------------------------------------------------------------------  ---------  -----------
<S>                                                                       <C>        <C>
Initial IT systems identification and assessment........................  10/96-3/97        100%
Remediation and testing regarding central system issues.................  5/97-4/98         100%
Remediation and testing regarding departmental system issues............  3/98-6/99          60%
Remediation and testing regarding store and distribution system
  issues................................................................  8/98-9/99          65%
Upgrades to telephone/PBX and other systems.............................  3/98-3/99         100%
Electronic data interchange trading partner conversions.................  3/98-6/99          85%
Identification, assessment, remediation, and testing regarding desktop
  and individual system issues..........................................  2/98-10/99         15%
Identification and assessment regarding non-IT system issues............  4/98-6/99          90%
Remediation and testing regarding non-IT system issues..................  2/99-12/99         50%
</TABLE>
 
    The Company has also mailed letters to its significant vendors and service
providers and has verbally communicated with many strategic customers to
determine the extent to which interfaces with such entities are vulnerable to
Year 2000 issues and whether the products and services purchased from or by such
entities are Year 2000 compliant. As of March 27, 1999, the Company had received
responses from approximately 56% of such third parties, and 81% of the companies
that have responded have provided written assurances that they expect to address
all their significant Year 2000 issues on a timely basis.
 
    The Company believes that the cost of its Year 2000 identification,
assessment, remediation, and testing efforts, as well as currently anticipated
costs to be incurred by the Company with respect to Year 2000 issues of third
parties, will not exceed $5.0 million, which expenditures will be funded from
operating cash flows. Such amount represents approximately 3% of the Company's
total actual and anticipated IT expenditures for fiscal 1997 through fiscal
1999. As of March 27, 1999, the Company had incurred costs of approximately $3.0
million related to its Year 2000 identification, assessment, remediation, and
testing efforts. All of the $3.0 million relates to analysis, repair, or
replacement of existing software, upgrades to existing software, or evaluation
of information received from significant vendors, service providers, or
customers. Other non-Year 2000 IT efforts have not been materially delayed or
impacted by Year 2000 initiatives. The Company presently believes that the Year
2000 issue will not pose significant operational problems for the Company.
However, if all Year 2000 issues are not properly identified, or assessment,
remediation, and testing are not effected timely with respect to Year 2000
problems that are identified, there can be no assurance that the Year 2000 issue
will not materially adversely impact the Company's results of operations or
adversely affect the Company's relationships with customers, vendors, or others.
Additionally, there can be no assurance that the Year 2000 issues of other
entities will not have a material adverse impact on the Company's systems or
results of operations.
 
    The Company has begun, but not yet completed, a comprehensive analysis of
the operational problems and costs (including loss of revenues) that would be
reasonably likely to result from the failure by the Company and certain third
parties to complete efforts to achieve Year 2000 compliance on a timely basis. A
contingency plan has not been developed for dealing with the most reasonably
likely worst case scenario, and such scenario has not yet been clearly
identified. The Company currently plans to complete such analysis and
contingency planning by December 31, 1999.
 
    The costs of the Company's Year 2000 identification, assessment,
remediation, and testing efforts and the dates on which the Company believes it
will complete such efforts are based upon management's best estimates, which
were derived using numerous assumptions regarding future events, including the
continued availability of certain resources, third-party remediation plans, and
other factors. There can be no assurance that these estimates will prove to be
accurate, and actual results could differ materially from
 
                                       25
<PAGE>
those currently anticipated. Specific factors that could cause such material
differences include, but are not limited to, the availability and cost of
personnel trained in Year 2000 issues, the ability to identify, assess,
remediate, and test all relevant computer codes and imbedded technology, and
similar uncertainties. In addition, some government and large corporate
customers have required the Company to represent and warrant to them that all of
the products the Company sells to them are Year 2000 compliant. The variability
of definitions of "compliance with Year 2000" and the myriad of different
products and services, and combinations thereof, sold by the Company may lead to
claims whose impact on the Company is not currently estimable. No assurance can
be given that the aggregate cost of defending and resolving such claims, if any,
will not materially adversely affect the Company's results of operations.
Although some of the Company's agreements with manufacturers and others from
whom it purchases products for resale contain provisions requiring such parties
to indemnify the Company under some circumstances, there can be no assurance
that such indemnification arrangements will cover all of the Company's
liabilities and costs related to claims by third parties related to the Year
2000 issue.
 
ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
 
    The Company invests cash balances in excess of operating requirements in
short-term securities, generally with maturities of 90 days or less. The
Company's Credit Agreement provides for borrowings that bear interest at
variable rates based on either a prime rate or the London Interbank Offering
Rate. The Company had no borrowings outstanding pursuant to the Credit Agreement
as of March 27, 1999. The Senior Subordinated Notes require the Company to make
semi-annual interest payments at a fixed interest rate of 9 1/2% per annum. In
addition, the Seller Note requires the Company to make semi-annual installment
payments with a fixed interest rate of 9.48% per annum. The Company believes,
because of the fixed nature of the interest charges of both the Senior
Subordinated Notes and the Seller Note, that the effect, if any, of reasonably
possible near-term changes in interest rates on the Company's financial
position, results of operations, and cash flows should not be material.
 
                                       26
<PAGE>
                                    PART II
 
ITEM 1.  LEGAL PROCEEDINGS
 
    Note 4 of the Notes to Consolidated Financial Statements in Part I, Item 1
is incorporated herein by reference as if fully restated herein. Note 4 contains
forward-looking statements that are subject to the risks and uncertainties
discussed in Item 2--"Management's Discussion and Analysis of Financial
Condition and Results of Operations--Cautionary Statement Regarding Risks and
Uncertainties That May Affect Future Results."
 
ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K
 
    (a) Exhibits:
 
<TABLE>
<CAPTION>
<C>          <S>
       3.1   Restated and Amended Certificate of Incorporation. (1)
 
       3.2   Restated and Amended Bylaws. (2)
 
      10.1   Third Amendment to Second Amended and Restated Credit Agreement, dated as of March 27, 1999, among
               the Company, certain lenders, and among NationsBank, N.A., as administrative lender. (3)
 
      10.2   Security Agreement, dated as of March 27, 1999, executed by the Company, Computer City, Inc.,
               CompUSA Holdings I Inc., CompUSA Holdings II Inc., CompTeam Inc., CompUSA Management Company,
               CompUSA Holdings Company and CompUSA Stores L.P., in favor of NationsBank, N.A. for the benefit
               of NationsBank, N.A. and certain lenders. (3)
 
      10.3   Promissory Note dated May 5, 1999, in the principal amount of $49,066,666.68, issued in favor of
               NationsBank, N.A. (3)
 
      10.4   Promissory Note dated May 5, 1999, in the principal amount of $11,500,000.00, issued in favor of
               Bank One, Texas, N.A. (3)
 
      10.5   Promissory Note dated May 5, 1999, in the principal amount of $22,233,333.33, issued in favor of
               Credit Lyonnais New York Branch. (3)
 
      10.6   Promissory Note dated May 5, 1999, in the principal amount of $23,000,000.00, issued in favor of
               Wells Fargo Bank (Texas), N.A. (3)
 
      10.7   Promissory Note dated May 5, 1999, in the principal amount of $11,500,000.00, issued in favor of
               The Bank of New York. (3)
 
      10.8   Promissory Note dated May 5, 1999, in the principal amount of $11,500,000.00, issued in favor of
               The Bank of Nova Scotia. (3)
 
      10.9   Promissory Note dated May 5, 1999, in the principal amount of $22,233,333.33, issued in favor of
               Fleet National Bank. (3)
 
      10.10  Promissory Note dated May 5, 1999, in the principal amount of $11,500,000.00, issued in favor of
               Fifth Third Bank. (3)
 
      10.11  Promissory Note dated May 5, 1999, in the principal amount of $22,233,333.33, issued in favor of
               Hibernia National Bank. (3)
 
      10.12  Promissory Note dated May 5, 1999, in the principal amount of $22,233,333.33, issued in favor of
               Credit Suisse First Boston. (3)
 
      10.13  Promissory Note dated May 5, 1999, in the principal amount of $11,500,000.00, issued in favor of
               Chase Bank of Texas, National Association. (3)
</TABLE>
 
                                       27
<PAGE>
<TABLE>
<C>          <S>
      10.14  Promissory Note dated May 5, 1999, in the principal amount of $11,500,000.00, issued in favor of
               First Union National Bank. (3)
 
      10.15  Amendment No. 1 to the CompSavings Plan for Employees of CompUSA Inc. and Trust, dated as of
               September 1, 1998. (3)
 
      11     Computation of Income per Common and Common Equivalent Share. (3)
 
      27.1   Financial Data Schedule. (4)
</TABLE>
 
    (b) Reports on Form 8-K.
 
           None.
 
------------------------
 
(1) Previously filed as an exhibit to the Company's Registration Statement No.
    1-11566 on Form 8-A/A filed December 6, 1996, as amended and incorporated
    herein by reference.
 
(2) Previously filed as an exhibit to the Company's Quarterly Report on Form
    10-Q for the fiscal quarter ended March 26, 1994, and incorporated herein by
    reference.
 
(3) Filed herewith.
 
(4) Included with EDGAR version only.
 
                                       28
<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.
 
<TABLE>
<S>                             <C>  <C>
                                COMPUSA INC.
 
Date: May 11, 1999              By:             /s/ JAMES E. SKINNER
                                     -----------------------------------------
                                                  James E. Skinner
                                     EXECUTIVE VICE PRESIDENT, CHIEF FINANCIAL
                                     OFFICER AND TREASURER (PRINCIPAL FINANCIAL
                                              AND ACCOUNTING OFFICER)
</TABLE>
 
                                       29