<PAGE>
 
                                   FORM 10Q

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549


          [X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
               OF THE SECURITIES EXCHANGE ACT OF 1934.

                 For the quarterly period ended June 30, 1997

                                      OR

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

               for the transition period from _______ to ______

                    Commission file number 0-25790
 
                           CREATIVE COMPUTERS, INC.
               (Exact name of registrant as specified in its charter)

      Delaware                                         95-4518700
(State or other jurisdiction                        (I.R.S. Employer
of incorporation or organization)                  Identification No.)


                           2645 Maricopa Street
                          Torrance, California  90503
                   (address of principal executive offices)
                                (310) 787-4500
             (Registrant's telephone number, including area code)



Indicated by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                            Yes  X      No 
                               -----       -----
                                        
 
Indicate the number of shares outstanding of each of the issuer's classes of
stock, as of the latest practicable date.

   There were 9,782,432 outstanding shares of COMMON STOCK at July 31, 1997.
 
<PAGE>
 
                           CREATIVE COMPUTERS, INC.
 
                              INDEX TO FORM 10-Q
<TABLE> 
<CAPTION> 
 

PART I - FINANCIAL INFORMATION                                     PAGE
<S>                                                                <C>
Item 1 - Financial Statements (unaudited)

Consolidated Balance Sheet........................................  2
 
Consolidated Statement of Operations..............................  3
 
Consolidated Statement of Cash Flows..............................  4
 
Condensed Notes to the Consolidated Financial Statements..........  5
 
Item 2 - Management's Discussion and Analysis of Financial
         Condition and Results of Operations......................  6
 
 
PART II - OTHER INFORMATION.......................................  9
 
SIGNATURE.........................................................  9
 
</TABLE>

                                       1

                                       
<PAGE>
 
                           CREATIVE COMPUTERS, INC.

                          CONSOLIDATED BALANCE SHEET
                       (in thousands except share data)
<TABLE>
<CAPTION>
 
                                                         June 30, 1997    December 31, 1996
                                                          (unaudited)
                                                         --------------   -----------------
<S>                                                      <C>              <C>
ASSETS
Current assets:
Cash and cash equivalents                                     $ 17,192             $ 17,329
Securities available for sale                                      534                  521
Accounts receivable, net of allowance for
   doubtful accounts                                            22,307               19,948
Inventories                                                     42,717               55,092
Prepaid expenses and other current assets                        4,022                3,410
Income tax refund receivable                                       ---                1,753
Deferred income taxes                                            4,003                4,284
                                                              --------             --------
     Total current assets                                       90,775              102,337
Property, plant and equipment, net                              10,914               10,909
Other assets                                                       239                  185
                                                              --------             --------
                                                              $101,928             $113,431
                                                              ========             ========
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable                                              $ 36,017             $ 50,770
Accrued expenses and other current liabilities                   9,910                8,684
Income tax payable                                                 635                  ---
Capital leases - current portion                                   221                  243
Notes payable - current portion                                     31                   40
                                                              --------             --------
     Total current liabilities                                  46,814               59,737
Capital leases                                                     193                  293
Notes payable                                                       21                   32
Deferred income taxes                                              564                  564
                                                              --------             --------
     Total liabilities                                          47,592               60,626
 
Stockholders' equity:
Common stock, $.001 par value; 15,000,000 shares
    authorized; 9,791,950 and 9,791,825 shares issued               10                   10
Preferred stock, $.001 par value; 5,000,000 shares
    authorized; none issued and outstanding
Additional paid in capital                                      53,932               53,932
Treasury stock, at cost: 15,000 shares                             (91)                 (91)
Retained earnings (accumulated deficit)                            485               (1,046)
                                                              --------             --------
     Total stockholders' equity                                 54,336               52,805
                                                              --------             --------
                                                              $101,928             $113,431
                                                              ========             ========
 
</TABLE>
         See condensed notes to the consolidated financial statements.
                                        
                                      2 
                              

                                       
<PAGE>
 
                            CREATIVE COMPUTERS, INC.

                      CONSOLIDATED STATEMENT OF OPERATIONS
                (unaudited, in thousands except per share data)
                                        

<TABLE>
<CAPTION>
 
  
                                               For the three months ended                For the six months ended
                                                        June 30,                                 June  30,
                                               --------------------------                ------------------------
                                                     1997       1996                        1997          1996
                                                   --------   --------                   --------      ---------
<S>                                                <C>        <C>                        <C>           <C> 
Net sales                                          $116,018   $ 94,527                    $236,158      $203,698
 
Cost of goods sold                                  101,182     88,085                     205,874       184,034
                                                   --------   --------                     -------       -------
  Gross profit                                       14,836      6,442                      30,284        19,664
 
Selling, general and administrative expenses         13,852     15,556                      28,138        33,016
                                                   --------   --------                     -------       -------
 
Income (loss) from operations                           984     (9,114)                      2,146       (13,352)
 
Interest income, net                                    242        137                         321           235
                                                   --------   --------                     -------       -------  
Income (loss) before income taxes                     1,226     (8,977)                      2,467       (13,117)
 
Income tax provision (benefit)                          466     (3,600)                        937        (5,240)
                                                   --------   --------                    --------       -------
 
Net income (loss)                                  $    760    $(5,377)                   $  1,530      $ (7,877)
                                                   ========    =======                    ========      ========   
Earnings (loss) per share                          $   0.08    $ (0.55)                   $   0.16      $  (0.81)
                                                   ========    =======                    ========      ======== 
Weighted average number of
 shares outstanding                                   9,788      9,771                       9,801         9,763
                                                   ========    =======                    ========      ========
 
</TABLE>


         See condensed notes to the consolidated financial statements.

                                       3

                                       
<PAGE>
 
                            CREATIVE COMPUTERS, INC.

                      CONSOLIDATED STATEMENT OF CASH FLOWS
                           (unaudited, in thousands)
<TABLE>
<CAPTION>
 
                                                                  FOR THE SIX  MONTHS ENDED
                                                                          JUNE 30,
                                                                    ---------------------
                                                                      1997         1996*
                                                                    --------     --------
<S>                                                                 <C>          <C>
Cash flows from operating activities:
Net income (loss)                                                   $  1,530     $ (7,877)
Adjustments to reconcile net income (loss) to
  net cash provided by (used in) operating activities:
  Depreciation and amortization                                        1,042          946
  Provision for deferred income taxes                                    281       (6,034)
  Loss on sale of equipment                                               10         ----
Changes in operating assets and liabilities:
  Accounts receivable                                                 (2,359)       3,739
  Inventories                                                         12,375       16,262
  Prepaid expenses and other current assets                             (612)         805
  Other assets                                                           (54)         104
  Accounts payable                                                   (14,753)     (17,295)
  Accrued expenses and other current liabilities                       1,226         (182)
  Income taxes                                                         2,388         ----
                                                                    --------     --------
 
Total adjustments                                                       (456)      (1,655)
                                                                    --------     --------
  Net cash provided by (used in) operating activities                  1,074       (9,532)
 
Cash flows from investing activities:
  Purchases of securities available for sale                          (1,008)     (14,043)
  Redemptions of securities available for sale                           995       22,478
  Proceeds from sale of equipment                                         13            0
  Acquisition of property, plant and equipment                        (1,070)      (1,065)
                                                                    --------     --------
 
  Net cash provided by (used in) investing activities                 (1,070)       7,370
 
Cash flows from financing activities:
  (Payments) borrowings under notes payable, net                         (20)           6
  Proceeds from profits realized by Director in sale of stock           ----        2,160
  Principal payments of obligations under capital leases                (122)        (125)
  Proceeds from stock issued under stock option plans                      1          132
                                                                    --------     --------
  Net cash provided by (used in) financing activities                   (141)       2,173

Net (decrease) increase in cash and cash equivalents                    (137)          11
Cash and cash equivalents:
  Beginning of the period                                             17,329       13,082
                                                                    --------     --------
  End of the period                                                 $ 17,192     $ 13,093
                                                                    ========     ========
</TABLE>

      See condensed notes to the consolidated financial statements.
 
                    *Restated to reflect changes in presentation.

                                       4

                                       
<PAGE>
 
                         CREATIVE COMPUTERS, INC.

          CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
 
1.  FINANCIAL STATEMENTS

     The consolidated interim financial statements include the accounts of
     Creative Computers, Inc. (a Delaware corporation) and its wholly owned
     subsidiaries (the Company) and have been prepared, without audit, pursuant
     to the rules and regulations of the Securities and Exchange Commission
     (SEC).  Certain information and footnote disclosures normally included in
     financial statements prepared in accordance with generally accepted
     accounting principles have been condensed or omitted pursuant to such
     regulations. Although the Company believes that the disclosures herein are
     adequate to make the information not misleading, these financial statements
     should be read in conjunction with the audited financial statements and the
     notes thereto included in the Company's Annual Report on Form 10-K at
     December 31, 1996.

     In the opinion of management, the accompanying financial statements contain
     all adjustments necessary to present fairly the financial position of the
     Company at June 30, 1997 and the results of operations and cash flows for
     the three and six months ended June 30, 1997 and 1996.  The results of
     operations for the interim periods are not necessarily indicative of the
     results of operations for the full year.

2.  NET INCOME (LOSS) PER SHARE

     Net income (loss) per share is based upon the weighted average number of
     common shares and common share equivalents outstanding during each period.
     Common share equivalents include dilutive stock options and warrants, if
     any, using the treasury stock method.

     In February 1997, the Financial Accounting Standards Board issued Statement
     of Financial Accounting Standards No. 128, "Earnings per Share" (FAS 128)
     which will become effective in the fourth quarter of 1997.  FAS 128
     replaces the presentation of earnings per share reflected on the statement
     of income with a dual presentation of Basic Earnings per Share ("Basic
     EPS") and Diluted Earnings per Share ("Diluted EPS").  FAS 128 does not
     permit early application, however, when implemented in the fourth quarter
     of 1997, it requires restatement of previously reported Earnings per Share
     for each income statement presented.  The Company does not expect the
     adoption of FAS 128 to have a material impact on its presentation of the
     second  quarter and year to date 1996 and 1997 Earnings per Share.

3.  UNUSUAL PERIOD END CHARGES
 
     During the quarter ended June 30, 1996, the Company analyzed inventory and
     accounts receivable by category and age in conjunction with an analysis of
     market conditions including the uncertainties surrounding Apple in the
     first half of the year. As a result, the Company recorded write-downs of
     $3,700,000 of inventory including adjustments for slow-moving and excessive
     inventory,  $1,600,000 for accounts receivable, and $1,700,000 for products
     returned to vendors for which the Company did not receive.

     During the quarter ended March 31, 1996, the Company experienced
     approximately $1,900,000 in losses due to theft and inventory shrinkage.  A
     small portion of this total has been recovered from insurance. Customer
     fraudulent credit card charges and chargebacks also increased resulting in
     a charge of $1,300,000 during the quarter ended March 31, 1996.  In
     addition, the Company was victimized by external credit card fraud,
     including two schemes investigated by the Secret Service and others
     investigated by local law enforcement.

                                       5

                                       
<PAGE>
 
ITEM 2 -  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

OVERVIEW

The Company began operations in May 1987 as a mail-order company and then opened
its first retail computer showroom in August 1987 and a second showroom in 1988.
These showrooms and mail-order operations primarily offered Commodore Amiga
personal computers and related products. The Company became an authorized Apple
dealer in 1991, opened two additional retail computer showrooms in the second
quarter of 1993 and relocated its original store in the fourth quarter of 1993.

In the fourth quarter of 1993, the Company shifted its principal distribution
and marketing focus from retail showrooms to direct mail distribution and
marketing.  In March 1994, the Company received authorization from Apple to
offer the full retail line of Apple products via direct mail.  The Company
distributed the first edition of its MacMall catalog in April 1994, the first
edition of its PC Mall catalog in May 1995, and the first edition of its DataCom
Mall catalog in January 1996.

During the fourth quarter of 1995, the Company moved its distribution center
from Torrance, CA to a new facility in Memphis, TN.  This distribution center
consists of 220,000 square feet, with an additional 105,000 square feet added on
May 1, 1997.

Net sales of the Company are primarily derived from the sale of personal
computer hardware, software, peripherals and accessories to individual
consumers, home offices, small businesses and large corporations through direct
response catalogs, dedicated inbound and outbound telemarketing sales
executives, retail showrooms and advertising on the Internet.  The Company is
dependent on sales of Apple computers and software and peripheral products used
with Apple computers.  Products manufactured by Apple represented approximately
24.6% of the Company's net sales for the quarter ended June 30, 1997 as compared
to 34.8% for the comparable quarter of 1996.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THE THREE MONTHS ENDED JUNE 30,
1996

Net sales for the quarter ended  June 30, 1997 were $116.0 million, a 23%
increase over net sales of $94.5 million for the comparable quarter in 1996.
PC/Wintel sales increased 142% from $17.0 million in last year's comparable
quarter to $41.1 million for the three months ended June 30, 1997.
Apple/Macintosh related product sales declined 3% to $74.9 million for the three
months ended June 30, 1997 as compared with $77.5 million for the comparable
period in the prior year.  PC/Wintel sales comprised over 35% of total net sales
for the second quarter in 1997 versus 18% for the same quarter last year.  Mail
order/catalog net sales reflected an increase of 24%, from $81.5 million in the
second quarter of last year to $101.3 million for the quarter ended June 30,
1997.  Total net sales increased primarily due to increased catalog circulation,
strong demand for PC/Wintel products and an increase in the number of sales
executives dedicated to new business development.

Gross profit increased by $8.4 million, or 130%, to $14.8 million for the
quarter ended June 30, 1997 from $6.4 million in the second quarter of 1996.
Gross profit as a percentage of net sales increased to 12.8% for the second
quarter of 1997 from 6.8% in the second quarter last year.  Last year's gross
margin was abnormally low due to inventory write-downs and vendor receivable
write-offs.   The Company shipped approximately 219,000 mail-order/catalog
orders during the three months ended June 30, 1997 as compared to 189,000 for
the same period last year.  The Company's average order size for mail-
order/catalog operations was $463 for the three months ended June 30, 1997 as
compared to $431 for the same period in 1996.

                                       6

                                       
<PAGE>
 
Selling, general and administrative (SG&A) expenses decreased by $1.7 million,
or 11.0%, to $13.8 million for the three months ended June 30, 1997 from $15.5
million for the comparable period in the prior year. This is primarily due to
write-offs last year of $2.6 million associated with the allowance for doubtful
accounts and due to net advertising costs being down significantly this year. As
a percentage of net sales, SG&A expenses decreased to 11.9% for the quarter from
16.5% for the corresponding quarter in 1996. In comparison to the first quarter
of 1997, SG&A costs declined slightly in the second quarter, and remained the
same as a percent of net sales.

Net interest income for the three months ended June 30, 1997 increased by
$105,000 or 76.6% to $242,000 compared to $137,000 for the comparable quarter in
1996.  The increase was due to higher average cash balances during the three
months ended June 30, 1997.

Net income increased by $6,137,000 to $760,000 for the three months ended June
30, 1997 from a loss of $5,377,000 for the same period last year.


SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1996

Net sales increased by $32.5 million or 16%, to $236.2 million in the six months
ended June 30,1997 from $203.7 million in the six months ended June 30, 1996.
Net sales for the period increased primarily due to growth in PC sales, which
generated sales of $77.2 million for the six months ended June 30, 1997,
compared with $38 million for the six months ended June 30, 1996.
Apple/Macintosh and related sales were $159.0 million for the six months ended
June 30, 1997 as compared with $165.7 million for the comparable period in the
prior year. Mail order/catalog net sales reflected an increase of 15% from
$181.4 million for the six months ended June 30, 1996 to $209.0 million for the
six months ended June 30, 1997. Approximately 30.9 million catalogs were mailed
during the six months ended June 30, 1997, as compared with 20.2 million
catalogs for the comparable period in the prior year.

Gross profit increased by $10.6 million to $30.3 million for the six months
ended June 30, 1997 from $19.7 million in the same period of 1996. Gross profit
as a percentage of net sales increased to 12.8% for the six months of 1997
compared to 9.6% for the six months of 1996. Last year's gross margin was
abnormally low due to large write-downs for slow-moving and excessive inventory;
products returned to vendors for which the Company did not anticipate payment;
and for theft and shrinkage of inventory.

Selling, general and administrative (SG&A) expenses decreased by $4.9 million to
$28.1 million for the six months ended June 30, 1997 from $33.0 million for the
comparable period in the prior year. This is primarily due to write-offs last
year associated with the allowance for doubtful accounts, credit card fraud and
due to net advertising costs being down significantly this year.

Net interest income for the six months ended June 30, 1997 increased by $86,000
or 36.6% to $321,000 compared to $235,000 for the comparable quarter in 1996 due
to higher average cash balances.

Net income increased by $9,407,000 to $1,530,000 for the six months ended June
30, 1997 from a loss of $7,877,000 for the same period last year.

LIQUIDITY AND CAPITAL RESOURCES

The Company's primary capital need has been funding the working capital
requirements created by its rapid growth in sales.  Historically, the Company's
primary sources of financing have been borrowings from its stockholders, private
investors and financial institutions.  In April and August 1995, the Company
completed an initial offering and a follow-on offering of its common stock which
resulted in net proceeds to the Company of approximately $46.6 million.  As of
June 30, 1997, the Company had cash, cash equivalents and short-term investments
of  $17.7 million.

                                       7

                                       
<PAGE>
 
Inventories decreased to $42.7 million at June 30, 1997 from $55.1 million at
December 31, 1996 as a result of continued efforts to improve inventory turns.
Accounts receivable increased to $22.3 million at June 30, 1997 from $19.9
million at December 31, 1996 primarily from an increase in vendor sponsored
advertising and an increase in sales.

During the six months ended June 30, 1997, the Company's capital expenditures
were $1.1 million, unchanged from the comparable period last year.  The
Company's primary capital need will continue to be the funding of its working
capital requirements for anticipated sales growth.

The Company has an existing credit facility of $50.0 million with a financial
institution.  At June 30, 1997, the Company had $7.5 million outstanding under
this credit facility.  The credit facility functions in lieu of a vendor trade
payable for inventory purchases and is included in accounts payable.  The
revolving credit line is cancelable upon 30 days advance notice and does not
bear interest if paid within 60 days of the date inventory is purchased.  The
credit facility is secured by substantially all of the Company's assets and
contains certain covenants which require the Company to maintain a minimum level
of tangible net worth.

In July 1996, the Company announced its plan to repurchase up to 1,000,000
shares of its Common Stock.  The shares will be repurchased from time to time at
prevailing market prices, through open market or negotiated transactions,
depending upon market conditions.  No limit was placed on the duration of the
repurchase program. There is no guarantee as to the exact number of shares that
the Company will repurchase.  Subject to applicable securities laws, repurchases
may be made at such times and in such amounts as the Company's management deems
appropriate.  The program can also be discontinued at any time management feels
additional purchases are not warranted.  The Company will finance the repurchase
plan with existing working capital.  As of June 30, 1997, the Company has
repurchased 15,000 shares.

As part of its growth strategy, the Company may, in the future, acquire other
companies in the same or complementary lines of business.  Any such acquisition
and the ensuing integration of the operations of the acquired company would
place additional demands on the Company's management and operating and financial
resources.  The Company from time to time engages in evaluation of and
discussions with third parties regarding potential acquisitions and from time to
time has submitted, and may in the future submit, proposals with respect to such
potential acquisitions.

HEADQUARTERS' CONSOLIDATION

As noted in the 1996 10-K, due to the Company's growth, its current headquarters
and telemarketing facilities in Torrance, California are not adequate to house
future operations.  The Company has entered into a lease agreement covering a
160,000 square foot facility in a nearby location at which the Company's
headquarters and telemarketing operations will be consolidated.  The Company
plans to phase in its occupancy of the entire facility over a two to three year
period, initially occupying approximately one third of the building.  Because of
the short remaining term of  the Company's leases on its current headquarters
and telemarketing facilities, coupled with the phase in of its use of the new
facility over two to three years, associated lease expense is expected to
increase only slightly during 1998. The move is currently planned to take place
early in the fourth quarter of 1997.  The Company believes that moving its
headquarters and telemarketing operations into a single facility should provide
meaningful operating efficiencies. However, as in any move of this type,
temporary interruptions or delays in the Company's operations could occur. 

INFLATION

Inflation has not had a material impact upon operating results, and the Company
does not expect it to have such an impact in the near future.  There can be no
assurances, however, that the Company's business will not be so affected by
inflation.

                                       8

                                       
<PAGE>
 
BUSINESS FACTORS

Except for historical information, all of the statements, expectations and
assumptions contained in this report are forward-looking statements. The
realization of any or all of these expectations is subject to a number of risks
and uncertainties, and it is possible that the assumptions made by management
may not materialize. In addition to the factors set forth above, other important
factors that could cause actual results to differ materially from expectations
include competition from other catalog and retail store resellers and price
pressures related thereto; uncertainties surrounding the supply of and demand
for products manufactured by and compatible with Apple Computer and clones
thereof; reliance on Apple Computer, IBM, Hewlett Packard, Compaq and other
vendors; and risks due to shifts in market demand and/or price erosion of owned
inventory. This list of risk factors is not intended to be exhaustive. Reference
should also be made to the risk factors set forth from time to time in the
Company's SEC reports, including but not limited to those set forth in the
section entitled "Certain Factors Affecting Future Results" in its Annual Report
on Form 10-K for 1996.
 
 

                    PART II - OTHER INFORMATION
 

ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K
          --------------------------------

          (a) Exhibits
          10.1 Lease agreement between AlliedSignal Inc. and Creative Computers,
          Inc. dated June 3, 1997 for the premises located at 2525 West 190th
          Street, Torrance, California.

          (b)  Reports on Form 8-K

          None.


                         SIGNATURE



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



                                    CREATIVE COMPUTERS, INC.
 



Date:  July 31, 1997                By     /s/  Richard Finkbeiner
                                                Richard Finkbeiner
                                                Chief Financial Officer

                                    (Duly Authorized Officer of the Registrant
                                    and Principal Financial Officer)

                                       9