<PAGE>

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



                  UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                               WASHINGTON, D.C. 20549
                                          
                        ------------------------------------
                                          
                                          
                                     FORM 10-Q
                                          
                  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
                                          
   FOR THE QUARTER ENDED JUNE 30, 1998  COMMISSION FILE NUMBER  0-28488   



                         MULTIPLE ZONES INTERNATIONAL, INC.
               (Exact name of registrant as specified in its charter)



               WASHINGTON                               91-1431894
        (State of incorporation)                     (I.R.S. Employer 
                                                 Identification Number)


            707 SOUTH GRADY WAY
             RENTON, WASHINGTON                        98055-3233
(Address of principal executive offices)               (Zip Code)


                                  (425) 430-3000
                            (Registrant's telephone 
                           number, including area code)



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 number of shares of the registrant's Common Stock outstanding as of July 
31, 1998 was 13,084,723.

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

                                       1

<PAGE>


                         MULTIPLE ZONES INTERNATIONAL, INC.
                                          
                                       INDEX
                                          
                                          
                                          
                           PART I.  FINANCIAL INFORMATION


Item 1.   Consolidated Financial Statements:

          Consolidated Balance Sheets
          June 30, 1998 and December 31, 1997 . . . . . . . . . . . .       3

          Consolidated Statements of Operations and
          Comprehensive Income Three and six months
          ended June 30, 1998 and 1997. . . . . . . . . . . . . . . .       4

          Statements of Shareholders' Equity
          Six months ended June 30, 1998. . . . . . . . . . . . . . .       5

          Consolidated Statements of Cash Flows
          Six months ended June 30, 1998 and 1997 . . . . . . . . . .       6

          Notes to Consolidated Financial Statements. . . . . . . . .       7

Item 2.   Management's Discussion and Analysis of
          Financial Condition and Results of Operations . . . . . . .       8

                             PART II.  OTHER INFORMATION


Item 5.   Other Information . . . . . . . . . . . . . . . . . . . . .      15

Item 6.   Exhibits and Reports on Form 8-K. . . . . . . . . . . . . .      15

          Signatures. . . . . . . . . . . . . . . . . . . . . . . . .      15


                                       2

<PAGE>


                           PART I - FINANCIAL INFORMATION
                                          
                         MULTIPLE ZONES INTERNATIONAL, INC.
                            CONSOLIDATED BALANCE SHEETS
                                   (In thousands)
                                    (Unaudited)


<TABLE>
<CAPTION>

                                                            June 30,       December 31, 
                                                              1998            1997
                                                          -------------    -------------
<S>                                                         <C>             <C>
ASSETS
Current assets:
   Cash and cash equivalents                                $   14,498      $   1,645
   Receivables, net                                             32,426         42,944
   Inventories, net                                             27,228         40,169
   Prepaid expenses                                              3,394          4,012
   Income tax receivable                                         5,267          1,127
   Deferred income taxes                                         1,728          1,889
                                                         -------------  -------------
          Total current assets                                  84,541         91,786

Property and equipment, net                                      8,495         12,417
Other assets                                                       699            607
                                                         -------------  -------------
          Total assets                                      $   93,735      $ 104,810
                                                         -------------  -------------
                                                         -------------  -------------
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
   Bank lines of credit                                     $   2,385       $   2,084
   Accounts payable                                             43,663         44,067
   Accrued liabilities and other                                 7,769          9,059
   Current portion of capital lease obligations                    892            961
   Income taxes payable                                            208            540
                                                         -------------  -------------
          Total current liabilities                             54,917         56,711

Capital lease obligations, net of current portion                  785            892
Other                                                            1,844          1,608
                                                         -------------  -------------
          Total liabilities                                     57,546         59,211
                                                         -------------  -------------
Minority interest                                                  323            628
                                                         -------------  -------------
Commitments and contingencies

Shareholders' equity:
   Common stock                                                 37,871         37,751
   Retained earnings (deficit)                                  (1,745)         7,256
   Foreign currency translation adjustment                        (260)           (36)
                                                         -------------  -------------
          Total shareholders' equity                            35,866         44,971
                                                         -------------  -------------
          Total liabilities & shareholders' equity          $   93,735      $ 104,810
                                                         -------------  -------------
                                                         -------------  -------------
</TABLE>

                    See notes to consolidated financial statements

                                       3

<PAGE>


                   MULTIPLE ZONES INTERNATIONAL, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                                    (Unaudited)
                                          
                                          
<TABLE>
<CAPTION>

                                             For the six months              For the three months
                                                ended June 30,                 ended June 30,
                                             1998          1997              1998           1997
                                        ------------   ------------     ------------   ------------
<S>                                       <C>            <C>              <C>            <C>

Net sales                                 $230,681       $230,798         $112,872       $108,043
Cost of sales                              206,631        203,264          102,740         97,057
                                      ------------   ------------     ------------   ------------
   Gross profit                             24,050         27,534           10,132         10,986

Selling, general and administrative
      expenses                              34,272         31,214           18,364         18,285
                                      ------------   ------------     ------------   ------------
   Loss from operations                    (10,222)        (3,680)          (8,232)        (7,299)
                                      ------------   ------------     ------------   ------------
Other expense:
  Interest expense, net                        390            590              209            210
  Other expense                              3,103            215            3,397            214
  Minority interest                            (60)           (99)            (141)          (107)
                                      ------------   ------------     ------------   ------------
                                             3,433            706            3,465            317
                                      ------------   ------------      -----------   ------------

Loss before income taxes                   (13,655)        (4,386)         (11,697)        (7,616)

Benefit from income taxes                   (4,654)          (815)          (3,930)        (1,980)
                                      ------------   ------------     ------------   ------------

   Net loss                               $(9,001)       $(3,571)         $(7,767)       $(5,636)
                                      ------------   ------------     ------------   ------------
                                      ------------   ------------     ------------   ------------



   Other comprehensive income
      (expense), net of tax

   Foreign currency translation
      adjustments                              19           (112)            (160)           (26)
   Reclassification adjustment for
      gains included in net income           (243)

   Basic and diluted loss per share       $ (0.69)       $ (0.28)        $  (0.59)       $ (0.44)
                                      ------------   ------------     ------------   ------------
                                      ------------   ------------     ------------   ------------

  Shares used in computation of basic
      and diluted loss per share           13,065         12,928           13,074         12,930
                                      ------------   ------------     ------------   ------------
                                      ------------   ------------     ------------   ------------
</TABLE>

                      See notes to consolidated financial statements


                                       4

<PAGE>



                MULTIPLE ZONES INTERNATIONAL, INC. AND SUBSIDIARIES
                         STATEMENTS OF SHAREHOLDERS' EQUITY
                         (In thousands, except share data)
                                    (Unaudited)

<TABLE>
<CAPTION>
                                                                                       Foreign
                                                                                       Currency
                                                Common Stock           Retained      Translation
                                          Shares          Amount       Earnings       Adjustment       Total
                                          ------          ------       --------      -----------       -----
<S>                                    <C>                <C>           <C>            <C>            <C>
Balance, January 1, 1998                13,041,464        $37,751       $ 7,256        $   (36)       $44,971
Issuance of common stock                    33,391            120                                         120
Net loss                                                                 (9,001)                       (9,001)
Translation adjustment                                                                    (224)          (224)
                                        ----------    -----------    -----------    -----------    -----------
Balance, June 30, 1998                  13,074,855        $37,871       $ (1,745)       $  (260)       $35,866
                                        ----------    -----------    -----------    -----------    -----------
                                        ----------    -----------    -----------    -----------    -----------
</TABLE>

                      See notes to consolidated financial statements



                                       5

<PAGE>



                MULTIPLE ZONES INTERNATIONAL, INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (In thousands)
                                    (Unaudited)


<TABLE>
<CAPTION>
                                                                  For the six months
                                                                   ended June 30,
                                                             -----------------------------
                                                                 1998           1997
                                                             -----------------------------
<S>                                                           <C>           <C>
Cash flows from operating activities:
  Net loss                                                    $ (9,001)     $  (3,571)
  Adjustments to reconcile net income to
    net cash provided by operating activities:
  Allowance for inventory and receivables                        1,773          4,925
  Depreciation and amortization                                  1,715          1,396
  Deferred income taxes                                             84          1,329
  Loss on disposal of asset                                      3,685            157
  Minority interest                                               (304)          (100)
  Changes in assets and liabilities:
    Accounts receivable                                          9,677         11,534
    Inventory                                                   11,835         39,950
    Prepaid expenses and other assets                              569          5,438
    Accounts payable                                            (2,741)       (50,384)
    Accrued liabilities                                           (862)           309
    Income taxes                                                (4,434)        (2,391)
                                                             ---------       --------
    Net cash provided by operating activities                   11,996          8,592
                                                             ---------       --------

Cash flows from investing activities:
  Purchases of property and equipment                           (1,445)        (2,936)
                                                             ---------       --------
    Net cash used in investing activities                       (1,445)        (2,936)
                                                             ---------       --------
Cash flows from financing activities:
  Borrowings under line of credit agreement                      8,451         66,051
  Payments under line of credit agreement                       (8,077)       (65,625)
  Net change in book overdrafts                                  2,448         (6,024)
  Proceeds from sale of common stock                               120           (554)
  Payments on capital leases                                      (214)           393
  Other                                                           (163)           282
                                                             ---------       --------
    Net cash provided by (used) in financing activities          2,565         (5,477)
                                                             ---------       --------
Effect of exchange rate on cash and cash equivalents              (262)          (127)
                                                             ---------       --------
Net increase in cash and cash equivalents                       12,854             52

Cash and cash equivalents at beginning of period                 1,644            976
                                                             ---------       --------
Cash and cash equivalents at end of period                   $  14,498     $    1,028
                                                             ---------       --------
                                                             ---------       --------
</TABLE>

                      See notes to consolidated financial statements


                                       6

<PAGE>


                  MULTIPLE ZONES INTERNATIONAL, INC. AND SUBSIDIARIES
                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


1.   BASIS OF PRESENTATION

The consolidated financial statements and related notes thereto for the three
and six months ended June 30, 1998 and 1997 are unaudited and reflect all normal
recurring adjustments which are, in the opinion of management, necessary for a
fair presentation of the financial position and operating results for the
interim period.  The results of operations for such interim periods are not
necessarily indicative of the results for the entire fiscal year ending December
31, 1998.  These financial statements should be read in conjunction with the
audited financial statements and notes thereto contained in the Company's Annual
Report on Form 10-K for the year- ended December 31, 1997.

2.   EARNINGS PER SHARE

Earnings per share is computed using the provision of Statement of Financial
Accounting Standards No. 128 "Earnings Per Share" (the "Statement").  The
Statement specifies the computation, presentation, and disclosure requirements
for earnings per share ("EPS").  Basic EPS excludes all dilution.  It is based
upon the weighted average number of shares outstanding during the period. 
Diluted EPS reflects the potential dilution that would occur if securities or
other contracts to issue common stock were exercised or converted into common
stock.

3.   RECENT ACCOUNTING PRONOUNCEMENTS

In June 1997, the FASB issued SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information" ("FAS 131").  FAS 131 establishes standards
for disclosures about operating segments in annual financial statements and
selected information in interim financial reports.  It also establishes
standards for related disclosures about products and services, geographic areas
and major customers.  FAS 131 supersedes FAS No. 14, "Financial Reporting for
Segments of a Business Enterprise."  FAS 131 is effective for the year ending
December 31, 1998 and requires restatement of earlier periods presented.  The
impact of adopting FAS 131 has not been determined.

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("FAS 133").  FAS 133 establishes a new
model for accounting for derivatives and hedging activities.  The implementation
of FAS 133 is required for financial statements issued for periods beginning
after June 15, 1999; earlier application is permitted.  Management is currently
evaluating the requirements of FAS 133; however it is not expected to have a
material impact on the presentation of the Company's financial statements.

4.   STOCK OPTIONS

On June 1, 1998, the Board of Directors adopted a resolution for all employees
below the level of Vice-President, re-pricing all options granted and
unexercised prior to June 1, 1998 to that day's fair market value, or $3.13 per
share.  While the vesting periods were not affected, employees must wait one
year to exercise vested shares at the new price.
                                       7

<PAGE>


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

                            FORWARD-LOOKING INFORMATION

The matters described below contain forward-looking statements which involve 
known and unknown risks, uncertainties and other factors that may cause 
actual results, performance or achievements of the Company or industry trends 
to differ materially from those expressed or implied by such forward-looking 
statements.

The following discussion and analysis should be read in conjunction with the 
Risk Factors and other information contained in the Company's Annual Report 
on Form 10-K for the year ended December 31, 1997.

General

Multiple Zones International, Inc. together with its majority owned 
subsidiaries (collectively the "Company") is a leading international direct 
marketer of brand name microprocessor-based hardware, software, accessories 
and peripheral products for users of both the PC/Wintel ("PC") and Macintosh 
("Mac") operating systems. The Company markets products through its two 
flagship catalogs, The Mac Zone (R) and The PC Zone (R).  The Company began 
operations in 1988 by advertising in national trade publications.  Catalog 
circulation commenced with The Mac Zone in 1990, followed by The PC Zone in 
1992.  International subsidiary operations and licensing activities commenced 
in 1992, and outbound telemarketing operations, principally to business 
accounts, were added in 1993. In 1997 the Company expanded onto the Internet 
through the opening of its online superstore, zones.com.  The Company 
distributed 23.65 million catalogs domestically in the six months ended June 
30, 1998, with additional circulation by its subsidiaries and licensees 
through operations in 15 other countries worldwide. 

Results of Operations

The following tables present the Company's unaudited consolidated results of
operations, in dollars and as a percentage of net sales, and selected domestic
operating data for the periods indicated.  This information has been prepared by
the Company on a basis consistent with the Company's unaudited Consolidated
Financial Statements and, in the opinion of management, includes all
adjustments, consisting of normal recurring accruals and special charges
necessary for a fair presentation of the results of such periods.


                                       8

<PAGE>

<TABLE>
<CAPTION>
                                                        Six months ended              Three months ended
                                                            June 30,                      June 30,
                                                     -----------------------        -----------------------
                                                       1998           1997            1998         1997
                                                     ---------     ---------        ---------    ----------
                                                            (In thousands, except operating data)
<S>                                                <C>            <C>            <C>            <C>
Net sales                                          $ 230,681      $ 230,798      $ 112,872      $ 108,043
Cost of sales                                        206,631        203,264        102,740         97,057
                                                   ---------      ---------      ---------      ---------
Gross profit                                          24,050         27,534         10,132         10,986
SG&A expenses                                         34,272         31,214         18,364         18,285
                                                   ---------      ---------      ---------      ---------
Loss from operations                                 (10,222)        (3,680)        (8,232)        (7,299)
Other expense                                          3,433            706          3,465            317
                                                   ---------      ---------      ---------      ---------
Loss before taxes                                    (13,655)        (4,386)       (11,697)        (7,616)
Benefit from taxes                                    (4,654)          (815)        (3,930)        (1,980)
                                                   ---------      ---------      ---------      ---------
Net loss                                           $  (9,001)      $ (3,571)      $ (7,767)      $ (5,636)
                                                   ---------      ---------      ---------      ---------
                                                   ---------      ---------      ---------      ---------


                                                        Six months ended              Three months ended
                                                            June 30,                      June 30,
                                                     -----------------------        -----------------------
                                                       1998           1997            1998         1997
                                                     ---------     ---------        ---------    ----------

Net sales                                              100.0%         100.0%         100.0%         100.0%
Cost of sales                                           89.6           88.1           91.0           89.8
                                                   ---------      ---------      ---------      ---------
Gross profit                                            10.4           11.9            9.0           10.2
SG&A expenses                                           14.9           13.5           16.3           16.9
                                                   ---------      ---------      ---------      ---------
Loss from operations                                    (4.5)          (1.6)          (7.3)          (6.7)
Other expense                                            1.5            0.3            3.1            0.3
                                                   ---------      ---------      ---------      ---------
Loss before taxes                                       (6.0)          (1.9)         (10.4)          (7.0)
Benefit from taxes                                      (2.0)          (0.4)          (3.5)          (1.8)
                                                   ---------      ---------      ---------      ---------
Net loss                                                (4.0%)         (1.5%)         (6.9%)         (5.2%)
                                                   ---------      ---------      ---------      ---------
                                                   ---------      ---------      ---------      ---------

Selected domestic operating data:
Catalog circulation                               23,650,000     25,600,000     12,200,000     12,450,000
Number of shipments                                  594,000        631,000        278,000        271,000
Average order size                                 $     352      $     342      $     366      $     361
</TABLE>


                                       9

<PAGE>



Comparison of the Three-month Periods ending June 30, 1998 and 1997.

Net Sales. Net sales were $112.9 million for the three months ended June 30, 
1998, representing a 4.5% increase over the prior year quarter.  The increase 
resulted primarily from increased PC product sales, partially offset by a 
decrease in Mac product sales.  PC platform sales increased to 49% of net 
sales from 48% of net sales over the prior quarter and from 41.9% in the 
comparable period. 

Net domestic PC product sales increased 13.9% to $46.5 million in the three 
months ended June 30, 1998 from $40.8 million in the comparable period.  The 
increase is due primarily to increased sales to business and education 
accounts, as well as an increase in PC catalog circulation, which grew to 6.0 
million in the three months ended June 30, 1998 from 4.8 million in the 
comparable period. Sales to business and education accounts increased 22.7% 
to $39.9 million in the three months ended June 30, 1998 from $32.5 million 
in the comparable period. PC product sales represent 54.6% and 52.7% of sales 
to business and education accounts in each of the respective periods. 

Net domestic Mac product sales were relatively stable, decreasing 2.5% to 
$48.5 million in the three months ended June 30, 1998 from $49.7 million in 
the comparable period.  In addition, Mac catalog circulation decreased to 6.0 
million in the three months ended June 30, 1998 from 7.0 million in the 
comparable period.  While sales per catalog increased, unit sales and average 
selling price declined slightly. Unit sales declines were due in part to the 
discontinuance of Mac clones in early 1998.

International subsidiary net sales in the three months ended June 30, 1998 were
$17.9 million, an increase of 2.2% over the comparable period. Excluding results
of subsidiaries no longer operating, net sales increased 2.7% over the
comparable period.  The increase in international subsidiary net sales resulted
primarily from sales growth in the Company's operations in Germany, France, and
the United Kingdom.

Gross Profit.  Gross profit decreased to $10.1 million in the three months ended
June 30, 1998 from $11.0 million in the comparable period.  Included in each
period are charges totaling $2.9 million and $2.5 million, respectively,
primarily related to allowances for obsolete and non-returnable inventory. 
Prior to the charges, gross profit as a percentage of sales was 11.5% and
12.5%, respectively.  Gross profit dollars declined in general due primarily to
lower sales volume.  Gross profit as a percentage of net sales declined due to
continued industry price competition and lower average unit selling prices
during the period.

Selling, General, and Administrative Expenses.  SG&A increased to $18.4 million
in the three months ended June 30, 1998, from $18.3 million in the comparable
period, and decreased as a percentage of sales to 16.3% from 16.9%,
respectively.  Included in the current quarter are charges totaling $2.3
million, primarily related to staffing reductions and the closure or sale of
certain international operations.  Included in the prior year quarter are
charges totaling $5.3 million, primarily related to uncollectable co-op
receivables, write-off of international goodwill and severance expenses.  Prior
to the charges, SG&A expenses increased to 14.2% in the three months ended June
30, 1998, from 12.0% in the comparable quarter.  The increase in SG&A expense is
primarily related to higher net advertising costs, salaries, depreciation and
professional fees. 

Other Expense.  Other expense was $3.5 million in the three months ended June
30, 1998 compared to $.3 million in the prior quarter.  During the second
quarter the Company recorded charges to income of $3.5 million related to the
disposal of certain unproductive computer hardware and software costs in the
current year quarter.

                                       10

<PAGE>

Income Tax Benefit.  The income tax benefit for the three months ended June 30,
1998 was $3.9 million.  The income tax benefit for the three months ended June
30, 1997 was $2 million.  The increase in income tax benefit is due to the
increased loss recognized by the company in the three months ended June 30, 1998
compared to loss in the prior year comparable period.   

Net Loss.  As a result of the above factors, a net loss of $7.8 million, or 6.9%
of net sales was incurred for the three months ended June 30, 1998.  Net loss
for the three months ended June 30, 1997 was $5.6 million, 5.2% of net sales.

Comparison of the Six-month Periods ending June 30, 1998 and 1997.

Net Sales.  Net sales were $230.7 million in the six months ended June 30, 
1998 in line with $230.8 million in the comparable period.  The decrease in 
domestic Mac product sales was offset by an increase in domestic PC product 
sales.  PC platform sales increased from 43.4% of net sales to 48.5% over the 
prior year period.

Net domestic PC product sales increased to $94.2 million in the six months 
ended June 30, 1998 from $85.8 million in the comparable period.  The 
increase is due to an increase in catalog circulation to 11.3 million in the 
six months ended June 30, 1998, from 9.5 million in the comparable period.  
Sales to business and education accounts increased 4.2% to $80.2 million in 
the six months ended June 30, 1998 from $65.4 million in the comparable 
period.  PC product sales represented 55.8% and 51.7% of sales to business 
and education accounts in each of the respective periods.

Net domestic Mac product sales decreased 10.7% to $100.1 million in the six 
months ended June 30, 1998 from $112.1 million in the comparable period. In 
addition, Mac catalog circulation decreased to 12.0 million in the six months 
ended June 30, 1998 from 15.0 million in the comparable period.  While sales 
per catalog increased, unit sales and average selling price declined. Unit 
sales declines were due in part to the discontinuance of Mac clones in early 
1998.
 
International subsidiary net sales in the six months ended June 30, 1998 were 
$36.3 million, an increase of 10.4% over the comparable period.  Excluding 
the results of subsidiaries no longer operating, net sales increased 11% over 
the comparable period.  The increase in international subsidiary net sales 
resulted primarily from sales growth in the Company's operations in Germany, 
France, and the United Kingdom.

Gross Profit.  Gross profit decreased to $24.1 million in the six months 
ended June 30, 1998 from $27.5 million in the comparable period, and 
decreased between periods to 10.4% from 11.9% of net sales.  Included in each 
period are charges totaling $2.9 million and $2.5 million, respectively, 
primarily related to allowances for obsolete and non-returnable inventory.  
Prior to the charges, gross profit as a percentage of sales were 11.5% and 
12.5%, respectively.

Selling, General and Administrative Expenses.  SG&A expenses increased to 
$34.3 million in the six months ended June 30, 1998 from $31.2 million in the 
comparable period, and increased between periods as a percentage of net sales 
to 14.9% from 13.5%.  Included in the current period are charges totaling 
$2.3 million, primarily related to staffing reductions and the closure or 
sale of certain international operations.  Included in the prior year period 
are charges totaling $5.3 million, primarily related to uncollectable co-op 
receivables, write off of international goodwill and severance expense.  
Prior to the charges, SG&A increased to 14.2% in the 6 months ended June 30, 
1998 from 12.0% in the comparable period.  The increase in SG&A expense is 
primarily related to higher net advertising costs, salaries, depreciation and 
professional fees.

                                       11

<PAGE>

Other Expense.  Other expense increased to $3.4 million in the six months 
ended June 30, 1998 from $.7 million in the comparable period, primarily as a 
result of recognition of loss on the disposal of certain unproductive 
computer hardware and software costs in the current period.
 

Income Tax Benefit.  The income tax benefit for the six months ended June 30, 
1998 was $4.7 million.  The income tax benefit for the six months ended June 
30, 1997 was $.8 million.  The increase in income tax benefit is due to the 
increased loss recognized by the company in the six months ended June 30, 
1998 compared to loss in the prior year comparable period.

Net Loss.  As a result of the above factors, a net loss of $9.0 million or 
4.0% of net sales was incurred for the six months ended June 30, 1998.  Net 
loss for the six months-ended June 30,1997 was $3.6 million or 1.5% of net 
sales.

Trends

PC product sales represented 49.0% of domestic net sales for the second 
quarter of 1998 as compared to 45.1% in the three months ended June 30, 1998 
and 48.0% in the three months ended March 31, 1998.  Additionally, domestic 
net PC product sales increased 13.9% to $46.5 million for the second quarter 
of 1998 from $40.8 million in the second quarter of 1997 and decreased 3% 
from $47.7 million in the first quarter 1998.  Circulation of The PC Zone was 
6.0 million in the second quarter of 1998 compared to 4.75 million in the 
second quarter of 1997 and 5.25 million distributed in the first quarter of 
1998.

Domestic net sales to business and education accounts were $39.9 million in 
the second quarter of 1998 compared to $32.5 million and $40.3 million in the 
second quarter of 1997 and first quarter of 1998, respectively.  During the 
three months ended June 30, 1998, June 30, 1997 and March 31, 1998, PC sales 
represented 54.6%, 52.7%, and 57.0% of the sales to business and education 
accounts. 

PC product sales and sales to business accounts tend to carry a lower average 
gross margin percentage and have contributed to a decrease in overall gross 
margin percentage.  The Company's gross margin as a percentage of net sales 
has decreased to 9% in the second quarter of 1998, compared to 10.2% in the 
second quarter of 1997 and 11.8% in the first quarter of 1998.  Prior to 
special charges, gross profit as a percentage of sales was 11.5%.

Net domestic Mac product sales decreased 2.5% to $48.5 million in the second 
quarter of 1998 from $50 million in the second quarter of 1997.  Circulation 
of The Mac Zone decreased to 6.0 million in the second quarter of 1998 
compared to 7.0 million in the second quarter of 1997.  Decline in the demand 
for Mac products has stabilized in the first two quarters of 1998.

The Company opened its Internet site in the first quarter of 1997.  Web-based 
sales increased to $7.8 million in the three-month period ended June 30, 1998 
compared to $1.4 million in the quarter ended June 30, 1997 and $7.5 million 
in the quarter ended March 31, 1998.

The market for microcomputer products is characterized by rapid changes and 
frequent introductions of new products and product enhancements.  These 
changes result in rapid price fluctuations.  Typically, prices of 
microcomputer products initially

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increase with improvements in features, such as processing speed and storage 
capacity.  Prices subsequently decrease as manufacturers pass on savings from 
lower-cost components and reduce their inventory of older models.  The 
Company expects pricing pressure to continue.  In order to remain 
competitive, the Company may be required to reduce its prices.  Such a 
reduction in prices could have a material adverse effect on the Company's 
future results of operations.

Seasonal Factors

Seasonal factors cause sales of microcomputer software and hardware products 
through the direct marketing channel to be somewhat stronger in the fourth 
calendar quarter than in the other periods.  Sales during the fourth quarter 
tend to be stronger as manufacturers make year-end introductions of new 
products and increased marketing activities related to the holiday season, 
and as corporate purchasing activities increase at the end of budgetary 
cycles. 

Inflation

The Company does not believe that inflation has had a material impact on its 
results of operations.  However, there can be no assurance that inflation 
will not have such an effect in future periods.

Liquidity and Capital Resources

As of June 30, 1998, the Company had total assets of $93.7 million, of which 
$84.5 million were current assets.  At June 30, 1998 and December 31, 1997 
the Company had cash and cash equivalents of $14.5 million and $1.6 million, 
respectively, and working capital of $29.6 million and $35.1 million, 
respectively.  Net cash provided by operating activities was $12.0 million 
and $8.6 million for the six months ended June 30, 1998 and 1997, 
respectively.  

Cash inflows in the six months ended June 30, 1998 were primarily due to a 
reduction in accounts receivable and inventories.  In the period ended June 
30, 1998 accounts receivable decreased $9.7 million and inventories decreased 
$11.8 million.  Cash inflows in the six months ended June 30, 1997 were 
primarily due to a reduction in accounts receivable and inventories.  In the 
six months ended June 30, 1997, accounts receivable decreased $11.5 million 
and inventories decreased $39.9 million.

Cash outlays for capital expenditures were $1.4 million and $2.9 million in 
the six  months ended June 30, 1998 and 1997, respectively.  During the 
quarter ended June 30, 1998 the Company wrote off $3.5 million of 
unproductive computer hardware and software costs.  The Company has committed 
to investing a like amount to upgrade its computer systems capacity and to 
migrate to the newest version of its enterprise software system over the next 
three quarters.

During the six months ended June 30, 1998 and 1997 the effect of the foreign 
exchange rate on cash was an outflow of $.3 million and $.1 million, 
respectively.

The Company has two domestic revolving lines of credit from commercial banks. 
The Company has a $15.0 million and a $20.0 million line of credit 
collateralized by accounts receivable and inventories, respectively.  At June 
30, 1998, the Company received a waiver related to noncompliance with one of 
the restrictive covenants under its $15.0 million line of credit 
collateralized by accounts receivable.  At June 30, 1998, there were no 
borrowings outstanding under either of the facilities. Additionally, at June 
30, 1998, the Company had $2.5 million of unused letters of credit.


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The net amount of vendor credit outstanding at June 30, 1998 was $43.7 
million of which $17.2 million was drawn from a $35.0 million inventory 
financing facility between the Company and a commercial lender, which 
provides financing for, and is collateralized by, inventory purchased from 
certain participating vendors.  

The Company believes that its existing available cash and cash equivalents, 
operating cash flow and existing credit facilities will be sufficient to 
satisfy its operating cash needs for at least the next 12 months.  However, 
if working capital or other capital requirements are greater than currently 
anticipated, the Company could be required to seek additional funds through 
sales of equity, debt or convertible securities or increased credit 
facilities.  There can be no assurance that additional financing will be 
available or that, if available, the financing will be on terms favorable to 
the Company and its shareholders.

Other Matters

The Company is currently conducting its assessment of the potential impact of 
the year 2000 on the processing of date-sensitive information by the 
Company's computerized information systems and those of its customers and 
vendors.  The year 2000 problem is the result of computer programs being 
written using two digits (rather than four) to define the applicable year.  
Any programs of the Company, its customers or its vendors that have 
time-sensitive software may recognize a date using "00" as the year 1900 
rather that the year 2000, which could result in miscalculations or system 
failures.

The Company's assessment has not yet been completed.  Accordingly, the extent 
of potential impact, if any, of the year 2000 on these computerized 
information systems, whether or not processing errors caused thereby may be 
remedied, the cost of such remedies, and the time necessary to implement them 
are uncertain. If the Company, its customers or vendors are unable to resolve 
such processing issues in a timely manner, it could result in a material 
financial risk.  The Company believes it is devoting the resources necessary 
to assess and resolve all significant year 2000 issues in a timely manner.

Statement under the Private Securities Litigation Reform Act of 1995

With the exception of the historical information contained herein, the 
matters described herein contain forward-looking statements that involve risk 
and uncertainties including but not limited to variability of quarterly 
results, reliance on vendor support and relationships, and dependence on 
sales of Macintosh products.  These and other risk factors are described 
generally in the Risk Factors section of the Company's 10-K dated December 
31, 1997 filed with the Securities and Exchange Commission.

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                             Part II.  Other Information


Item 6.   Exhibits and Reports on Form 8-K

(a)  Exhibits

27.1      Financial Data Schedule

(b)  Reports on Form 8-K

     On May 20, 1998, the Company filed a report on form 8-K containing the
     press release that announced the appointment of Firoz Lalji as the
     Company's President and Chief Executive Officer.  No other Reports on Form
     8-K were filed during the Quarter ended June 30, 1998.


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:


                              MULTIPLE ZONES INTERNATIONAL, INC.


Dated:  August 14, 1998       By: /s/ Firoz H. Lalji
                              ---------------------------------------
                              Firoz H. Lalji, Chief Executive Officer



Dated:  August 14, 1998       By: /s/ Peter J. Biere
                              ---------------------------------------
                              Peter J. Biere, Chief Financial Officer







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                                   EXHIBIT INDEX

Exhibits 

27.1      Financial Data Schedule













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