<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                       SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D. C. 20549

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

                                   FORM 10-Q

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

(Mark One)

<TABLE>
<C>        <S>
   /X/     Quarterly report pursuant to Section 13 or 15(d) of the
           Securities Exchange Act of 1934 for the Quarterly Period
           Ended September 25, 1999

                                  OR

   / /     Transition report pursuant to Section 13 or 15(d) of the
           Securities Exchange Act of 1934
</TABLE>

                        Commission file number: 0-16114

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

                                  INACOM CORP.

             (Exact name of registrant as specified in its charter)

<TABLE>
<S>                                                   <C>
           Delaware                                         47-0681813
 (State or other jurisdiction                            (I.R.S. Employer
              of
incorporation or organization)                        Identification Number)
</TABLE>

                            10810 FARNAM, SUITE 200
                             OMAHA, NEBRASKA 68154
                    (Address of principal executive offices)

                        TELEPHONE NUMBER (402) 758-3900

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 twelve months, and (2) has been subject to such filing
requirements for the past ninety days:

                              Yes (X)      No (  )

As of November 1, 1999, there were 45,631,054 common shares of the registrant
outstanding.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>
                         INACOM CORP. AND SUBSIDIARIES
                   CONDENSED AND CONSOLIDATED BALANCE SHEETS
                                  (UNAUDITED)
                   (AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                                              SEPTEMBER 25,    DECEMBER 26,
                                                                   1999            1998
                                                              --------------   -------------
<S>                                                           <C>              <C>
                           ASSETS
Current assets:
  Cash and cash equivalents.................................    $   58,698      $   69,939
  Accounts receivable, net..................................       795,320         705,305
  Inventories...............................................       437,979         485,283
  Other current assets......................................        42,741          59,345
                                                                ----------      ----------
    Total current assets....................................     1,334,738       1,319,872
                                                                ----------      ----------
Net property and equipment..................................       160,960         197,130
Cost in excess of net assets of businesses acquired, net of
  accumulated amortization..................................       316,998         314,462
Other assets................................................       124,820          49,520
                                                                ----------      ----------
                                                                $1,937,516      $1,880,984
                                                                ==========      ==========

            LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable..........................................    $  711,977      $  554,217
  Notes payable and current portion of long-term debt.......        50,283         179,829
  Other current liabilities.................................       205,119         183,621
                                                                ----------      ----------
    Total current liabilities...............................       967,379         917,667
                                                                ----------      ----------

Long-term debt, less current portion........................       335,000         201,941
Other long-term liabilities.................................           414           1,178

Company-obligated mandatorily redeemable convertible
  preferred securities of trust holding solely convertible
  subordinated debt securities of the Company...............       195,239         194,974

Stockholders' equity:
  Capital stock:
  Class A preferred stock of $1 par value.
    Authorized 1,000,000 shares; none issued................            --              --
  Common stock of $.10 par value. Authorized 100,000,000
    shares; issued 45,574,716 shares in 1999 and 44,795,289
    in 1998.................................................         4,557           4,480
  Additional paid-in capital................................       416,796         407,159
  Accumulated other comprehensive income....................        (2,651)         (2,480)
  Retained earnings.........................................        22,447         157,302
                                                                ----------      ----------
                                                                   441,149         566,461
  Unearned restricted stock.................................        (1,665)         (1,237)
                                                                ----------      ----------
    Total stockholders' equity..............................       439,484         565,224
                                                                ----------      ----------
                                                                $1,937,516      $1,880,984
                                                                ==========      ==========
</TABLE>

                                       2
<PAGE>
                         INACOM CORP. AND SUBSIDIARIES
              CONDENSED AND CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (UNAUDITED)
                 (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                 THIRTEEN WEEKS ENDED             THIRTY-NINE WEEKS ENDED
                                            -------------------------------   -------------------------------
                                            SEPTEMBER 25,    SEPTEMBER 26,    SEPTEMBER 25,    SEPTEMBER 26,
                                                 1999             1998             1999             1998
                                            --------------   --------------   --------------   --------------
<S>                                         <C>              <C>              <C>              <C>
Revenues:
  Products................................    $1,342,280       $1,433,414       $3,758,061       $4,528,207
  Services................................       203,330          224,702          609,430          643,184
                                              ----------       ----------       ----------       ----------
                                               1,545,610        1,658,116        4,367,491        5,171,391
                                              ----------       ----------       ----------       ----------
Direct costs:
  Products................................     1,230,783        1,335,029        3,512,088        4,213,650
  Services................................       122,458          135,488          423,276          389,888
                                              ----------       ----------       ----------       ----------
                                               1,353,241        1,470,517        3,935,364        4,603,538
                                              ----------       ----------       ----------       ----------
Gross margin..............................       192,369          187,599          432,127          567,853
Selling, general and administrative
  expenses................................       165,565          185,972          491,650          475,728
Restructuring charges.....................            --               --          103,900               --
                                              ----------       ----------       ----------       ----------
Operating income (loss)...................        26,804            1,627         (163,423)          92,125
Financing expense, net....................        11,614           16,781           35,225           52,784
                                              ----------       ----------       ----------       ----------
Earnings (loss) before income taxes and
  distributions on convertible preferred
  securities of trust.....................        15,190          (15,154)        (198,648)          39,341
Income tax expense (benefit)..............         5,848           (4,496)         (70,480)          16,947
                                              ----------       ----------       ----------       ----------
Earnings (loss) before distributions on
  convertible preferred securities of
  trust...................................         9,342          (10,658)        (128,168)          22,394
Distributions on convertible preferred
  securities of trust, net of taxes.......         2,229            2,229            6,687            6,687
                                              ----------       ----------       ----------       ----------
Net earnings (loss).......................    $    7,113       $  (12,887)      $ (134,855)      $   15,707
                                              ==========       ==========       ==========       ==========
Earnings (loss) per share:
  Basic...................................    $     0.16       $    (0.29)      $    (2.98)      $     0.36
  Diluted.................................    $     0.15       $    (0.29)      $    (2.98)      $     0.36
                                              ==========       ==========       ==========       ==========
Common shares and equivalents outstanding:
  Basic...................................        45,500           44,600           45,300           43,600
  Diluted.................................        45,900           44,600           45,300           44,200
                                              ==========       ==========       ==========       ==========
</TABLE>

                                       3
<PAGE>
                         INACOM CORP. AND SUBSIDIARIES
              CONDENSED AND CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (UNAUDITED)
                             (AMOUNTS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                  THIRTY-NINE WEEKS ENDED
                                                              -------------------------------
                                                              SEPTEMBER 25,    SEPTEMBER 26,
                                                                   1999             1998
                                                              --------------   --------------
<S>                                                           <C>              <C>
Cash flows from operating activities:
  Net earnings (loss).......................................     $(134,855)       $ 15,707
  Adjustments to reconcile net earnings (loss) to net cash
    provided (used) by operating activities:
      Depreciation and amortization.........................        61,725          57,431
      Restructuring and unusual charges.....................       217,000           7,880
      Deferred taxes related to restructuring and unusual
        charges.............................................       (77,395)             --
      Changes in assets and liabilities, net of business
        combinations and restructuring and unusual charges
          Accounts receivable...............................        (8,080)        (69,908)
          Inventories.......................................        (6,030)        356,296
          Prepaid expenses and other assets.................        13,788          (1,527)
          Accounts payable..................................       157,760        (215,020)
          Accrued and other liabilities.....................       (15,668)        (11,336)
                                                                 ---------        --------
Net cash provided by operating activities...................       208,245         139,523
                                                                 ---------        --------

Cash flows from investing activities:
  Payments on restructuring and unusual charges.............       (68,776)             --
  Additions to property and equipment.......................       (47,667)        (49,864)
  Business combinations.....................................        (8,633)        (57,211)
  Other.....................................................        (7,001)        (13,485)
                                                                 ---------        --------
Net cash used in investing activities.......................      (132,077)       (120,560)
                                                                 ---------        --------

Cash flows from financing activities:
  Proceeds from term loan...................................       200,000              --
  Repurchase of convertible subordinated debentures.........      (141,500)             --
  Reduction in receivables sold.............................       (86,000)        (45,000)
  Payments on current portion of long-term debt.............       (28,479)         (2,933)
  (Payments on) proceeds from revolving credit and working
    capital facilities......................................       (26,508)          3,791
  Debt issuance costs.......................................        (8,794)             --
  Proceeds from employee stock plans........................         4,185           5,670
                                                                 ---------        --------
Net cash used by financing activities.......................       (87,096)        (38,472)
                                                                 ---------        --------

Change in cumulative translation adjustment.................          (313)             --
                                                                 ---------        --------

Net decrease in cash and cash equivalents...................       (11,241)        (19,509)
Adjustment to conform company year ends.....................            --           3,587
Cash and cash equivalents, beginning of year................        69,939          62,068
                                                                 ---------        --------
Cash and cash equivalents, end of the period................     $  58,698        $ 46,146
                                                                 =========        ========
</TABLE>

                                       4
<PAGE>
                         INACOM CORP. AND SUBSIDIARIES

            NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

                                  (UNAUDITED)

1.  CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

    The condensed and consolidated financial statements are unaudited and
reflect all adjustments (consisting only of 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 periods. The condensed
and consolidated financial statements should be read in conjunction with the
supplemental consolidated financial statements and notes thereto contained in
the Company's report on Form 8-K dated February 17, 1999, as amended. The
results of operations for the thirty-nine weeks ended September 25, 1999 are not
necessarily indicative of the results for the entire fiscal year ending
December 25, 1999.

    On February 17, 1999, the Company issued approximately 28.2 million shares
of common stock for all of the outstanding common stock of Vanstar Corporation,
a provider of products and services to Fortune 1000 companies and other large
enterprises. The merger was accounted for as a pooling-of-interests and,
accordingly, the Company's historical financial statements have been restated to
include the accounts and results of Vanstar as if the companies had operated
together from the beginning of the earliest period presented.

2.  ACCOUNTS RECEIVABLE

    In May 1999, the Company terminated one of its two asset securitization
programs, which allowed for funding of up to $250.0 million. At the same time,
the Company amended its other asset securitization program, which previously
allowed for funding of up to $175.0 million. The amended asset securitization
program provided for funding of up to $300.0 million. This amount was increased
to $350.0 million in July 1999. In connection with the amended asset
securitization program, the Company sells, on a revolving basis, certain pooled
trade accounts receivable to a separate, non-consolidated wholly-owned special
purpose corporation, which in turn sells a percentage ownership interest in the
pooled trade accounts receivable to a commercial paper conduit sponsored by an
unrelated financial institution. The transactions have been recorded as a sale
in accordance with Statement of Financial Accounting Standards (SFAS) No. 125,
"Accounting for Transfers and Servicing of Financial Assets and Extinguishments
of Liabilities." The amount of the pooled trade accounts receivable, which
totaled $570.0 million as of September 25, 1999, is reflected as a reduction to
accounts receivable. The Company retains an interest in certain amounts of the
assets sold. As of September 25, 1999, the amount of that retained interest
totaled $250.0 million and is included in accounts receivable. The Company is
retained as servicer of the pooled trade accounts receivable. Although
management believes that the servicing revenues earned will be adequate
compensation for performing the services, estimating the fair value of the
servicing asset was not considered practicable. Consequently, a servicing asset
has not been recognized. The gross proceeds resulting from the sale of the
percentage ownership interests in the pooled trade accounts receivable totaled
$320.0 million as of September 25, 1999. Changes in the amount of pooled trade
accounts receivable sold are included in cash flows from financing activities in
the consolidated statements of cash flows. On September 25, 1999, the implicit
interest rate on the trade accounts receivable sale transaction was 5.9%.

3.  DEBT

    In April 1999, the Company entered into a $450.0 million revolving credit
and amortizing term loan facility with Deutsche Bank, as agent. This new
facility is a combined senior secured $200.0 million amortizing term loan and
$250.0 million revolving credit facility. The previous $250.0 million senior

                                       5
<PAGE>
                         INACOM CORP. AND SUBSIDIARIES

      NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (UNAUDITED)

3.  DEBT (CONTINUED)

secured revolving credit facility entered into in July 1998 with Deutsche Bank,
as agent, and with other syndicated banks was terminated. Also, on March 31,
1999, the Company's $350.0 million inventory and working capital financing
agreement with IBM Credit Corp. ("IBMCC") expired. The terminated
$250.0 million senior secured revolving credit facility with Deutsche Bank and
the working-capital portion of the IBMCC financing agreement were replaced by
the $450.0 million revolving credit and amortizing term loan facility with
Deutsche Bank, as agent. The non-interest-bearing floor planning portion of the
financing agreement with IBMCC was transferred to an existing floor planning
facility with IBMCC.

    On May 3, 1999, the Company repurchased the entire $141.5 million principal
amount of convertible subordinated debentures, which consisted of
$86.25 million of 4.5% convertible subordinated debentures issued in
November 1997 and $55.25 million of 6.0% convertible subordinated debentures
issued in June 1996. The 1997 debentures and the 1996 debentures were subject to
redemption at the option of the holder if there was a Change in Control (as
defined in the indenture) at a price equal to 100% of the principal amount plus
accrued interest at the date of redemption. The merger between InaCom and
Vanstar was deemed a Change in Control. As a result, the Company repurchased the
$141.5 million principal amount of the 1997 and 1996 debentures.

4.  SEGMENT REPORTING

    The Company adopted SFAS No. 131, "Disclosures About Segments of an
Enterprise and Related Information", in 1998, which changed the way the Company
reports information about its operating segments. The Company has various
management teams and infrastructures, which offer different products and
services. The Company has identified two reportable segments: products and
services. The product segment includes the sales of desktops, laptops, servers,
monitors, printers, operating systems software, phone systems, voice mail, voice
processing, data network equipment and multiple small office-home office
offerings. The services segment includes sales of integrated life cycle
services, which encompasses technology planning, procurement, integration,
support, and management.

    Summarized financial information concerning the Company's reportable
segments is shown in the following table.

<TABLE>
<CAPTION>
                                                 THIRTEEN WEEKS ENDED             THIRTY-NINE WEEKS ENDED
                                            -------------------------------   -------------------------------
                                            SEPTEMBER 25,    SEPTEMBER 26,    SEPTEMBER 25,    SEPTEMBER 26,
                                                 1999             1998             1999             1998
                                            --------------   --------------   --------------   --------------
<S>                                         <C>              <C>              <C>              <C>
Revenues:
  Products................................    $1,342,280       $1,433,414       $3,758,061       $4,528,207
  Services................................       203,330          224,702          609,430          643,184
                                              ----------       ----------       ----------       ----------
    Total.................................    $1,545,610       $1,658,116       $4,367,491       $5,171,391
                                              ==========       ==========       ==========       ==========
Segment earnings (loss) before taxes and
 distributions on convertible preferred
 securities of the trust:
  Products................................    $    9,970       $  (24,839)      $ (140,141)      $   14,677
  Services................................         5,220            9,685          (58,507)          24,664
                                              ----------       ----------       ----------       ----------
    Total.................................    $   15,190       $  (15,154)      $ (198,648)      $   39,341
                                              ==========       ==========       ==========       ==========
</TABLE>

                                       6
<PAGE>
                         INACOM CORP. AND SUBSIDIARIES

      NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (UNAUDITED)

4.  SEGMENT REPORTING (CONTINUED)

    For the thirty-nine weeks ended September 25, 1999, segment earnings (loss)
before taxes includes the impact of $217.0 million in restructuring and unusual
charges, of which $158.0 million is in the products segment and $59.0 million is
in the services segment. For the thirteen weeks and thirty-nine weeks ended
September 26, 1998, segment earnings (loss) before taxes includes the impact of
$27.2 million in unusual charges, of which $21.5 million is in the products
segment and $5.7 million is in the services segment.

5.  EARNINGS PER SHARE

    Basic earnings per share are computed using the weighted-average number of
shares of common stock outstanding during the period. Diluted earnings per share
are computed using the weighted-average number of shares of common stock
outstanding and dilutive potential common stock outstanding during the period.
The earnings per share calculations are as follows:

<TABLE>
<CAPTION>
                                                 THIRTEEN WEEKS ENDED             THIRTY-NINE WEEKS ENDED
                                            -------------------------------   -------------------------------
                                            SEPTEMBER 25,    SEPTEMBER 26,    SEPTEMBER 25,    SEPTEMBER 26,
                                                 1999             1998             1999             1998
                                            --------------   --------------   --------------   --------------
<S>                                         <C>              <C>              <C>              <C>
BASIC EARNINGS PER SHARE
  Net earnings (loss).....................      $ 7,113         $ (12,887)      $ (134,855)        $15,707
                                                -------         ---------       ----------         -------
  Weighted-average number of common shares
    outstanding...........................       45,500            44,600           45,300          43,600
                                                -------         ---------       ----------         -------
  Earnings (loss) per share...............      $  0.16         $   (0.29)      $    (2.98)        $  0.36
                                                =======         =========       ==========         =======
DILUTED EARNINGS PER SHARE
  Net earnings (loss) used in diluted
    earnings per share calculation........      $ 7,113         $ (12,887)      $ (134,855)        $15,707
                                                -------         ---------       ----------         -------
  Weighted-average number of common shares
    outstanding...........................       45,500            44,600           45,300          43,600
  Common equivalent shares from stock
    options and convertible subordinated
    debentures............................          400                --               --             600
                                                -------         ---------       ----------         -------
  Shares used in diluted earnings per
    share calculation.....................       45,900            44,600           45,300          44,200
                                                -------         ---------       ----------         -------
  Diluted earnings (loss) per share.......      $  0.15         $   (0.29)      $    (2.98)        $  0.36
                                                =======         =========       ==========         =======
</TABLE>

    For the thirteen weeks ended September 26, 1998 and the thirty-nine weeks
ended September 25, 1999, basic and diluted earnings per share are the same. For
these periods, calculating diluted earnings per share including the dilutive
potential common shares would have resulted in diluted earnings per share being
anti-dilutive.

6.  MARKET DEVELOPMENT FUNDS

    Primary vendors of the Company provide various incentives, in cash or credit
against obligations, for promoting and marketing their product offerings. Funds
or credits are primarily based on the sales of the

                                       7
<PAGE>
                         INACOM CORP. AND SUBSIDIARIES

      NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (UNAUDITED)

6.  MARKET DEVELOPMENT FUNDS (CONTINUED)

vendors' products and are earned through performance of specific marketing
programs or upon completion of objectives outlined by the vendors. Funds or
credits earned are applied to direct costs or selling, general and
administrative expenses depending on the objectives of the program. Funds or
credits from the Company's primary vendors ranged from 1% to 5% of sales on an
annual basis in 1998 and 1% to 2% in the first nine months of 1999.

7.  BUSINESS COMBINATIONS

    On February 17, 1999, the Company issued approximately 28.2 million shares
of common stock for all of the outstanding common stock of Vanstar Corporation,
a provider of products and services to Fortune 1000 companies and other large
enterprises. The merger was accounted for as a pooling-of-interests and,
accordingly, the Company's historical financial statements have been restated to
include the accounts and results of Vanstar as if the companies had operated
together from the beginning of the earliest period presented.

    Also, during the first nine months of 1999, the Company consummated an
additional business combination and made contingent payments based on certain
performance criteria in relation to business combinations consummated in prior
years. The total consideration given for this business combination and for
contingent payments on prior years' combinations was $15.1 million, which
included $8.6 million in cash and 333,394 shares of common stock.

8.  RESTRUCTURING AND UNUSUAL CHARGES

    In conjunction with the merger of InaCom and Vanstar along with the
Company's efforts to address current market conditions, the Company recognized
previously announced restructuring and other unusual charges during the first
quarter of 1999. These charges include items presented as restructuring costs as
defined by Emerging Issues Task Force 94-3 and other unusual charges. The
restructuring charges are in conjunction with the Company's previously announced
plans to integrate and consolidate operations of InaCom and Vanstar following
the February 17, 1999 merger. The restructuring and unusual pre-tax charges
totaled $217.0 million, of which $75.9 million will not require cash payments
and include charges for duplicate fixed assets and duplicate inventory
(including service parts). The remaining $141.1 million will require cash
payments to be made for termination fees upon the closure of duplicate leased
facilities, to employees for severance, for contract terminations and vendor
purchase commitments, and for other direct costs related to the merger with
Vanstar.

    RESTRUCTURING CHARGES

    Restructuring charges of $103.9 million include the cost of involuntary
employee separation benefits, leased facility closures and consolidations,
losses on abandonment or disposal of leasehold improvements and equipment,
termination of certain contracts and agreements, and professional fees
associated with the merger. Employee separation benefits of $33.6 million
include amounts to be paid for severance, medical, and other benefits for 1,340
permanent full-time employees that will be severed in accordance with
management's integration and consolidation plan. As of September 25, 1999, 1,116
employees had been severed and $26.9 million in separation benefits had been
paid and subsequently charged against the separation benefits reserve. The
Company estimates all separation activities to be completed by the end of 1999.

                                       8
<PAGE>
                         INACOM CORP. AND SUBSIDIARIES

      NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (UNAUDITED)

8.  RESTRUCTURING AND UNUSUAL CHARGES (CONTINUED)

    Duplicate leased facility closure and consolidation costs of $47.5 million
include amounts to be paid for lease termination fees, losses on abandonment or
disposal of leasehold improvements, equipment, and capitalized software, net of
estimated disposal values in accordance with management's integration and
consolidation plan. As of September 25, 1999, 86 leases have been terminated and
$10.4 million in lease termination fees have been paid and subsequently charged
against the facility closure and consolidation reserve along with $6.6 million
in losses on the abandonment and disposal of leasehold improvements, equipment,
and capitalized software. The Company estimates all facility closures and
consolidations will be completed by the end of 1999.

    Termination costs for certain contracts and agreements of $8.2 million
include the fees to be paid upon the termination and cancellation of contracts
and agreements pursuant to management's integration and consolidation plan.
Other direct costs related to the merger of $14.6 million include fees paid to
financial advisors, legal counsel, and independent auditors. As of September 25,
1999, $22.8 million had been paid pursuant to the termination of contracts and
agreements and to financial advisors, legal counsel, and independent auditors.

    Reserves accrued for the restructuring charges are reflected as an increase
in current liabilities on the Company's balance sheet dated September 25, 1999.
As of September 25, 1999 the restructuring charges reserve had a balance of
$37.2 million, which includes provision amounts of $103.9 million less charges
to the reserve of $66.7 million.

    UNUSUAL CHARGES

    Unusual charges of $113.1 million not presented as restructuring charges are
reflected in direct costs ($86.1 million) and selling, general, and
administrative expenses ($27.0 million). In direct costs, the unusual charges
are reflected in the products segment ($46.5 million) and the services segment
($39.6 million). In selling, general, and administrative expenses, the unusual
charges are reflected in the products segment ($23.0 million) and the services
segment ($4.0 million). The unusual charges include non-cash charges primarily
related to the losses incurred on liquidating certain duplicative inventories
(including service parts) and $4.0 million to record estimated losses on the
collection of certain trade accounts in conjunction with the recent developments
regarding such accounts. The unusual charges also include cash charges related
to certain vendor purchase commitments and other integration costs associated
with merger activities.

    Losses on the liquidation of certain duplicative inventories and vendor
purchase commitments of $86.1 million include losses on the disposal of
duplicative inventories and service parts of $43.6 million. Additional charges
of $42.5 million include the estimated losses to be realized on the disposal of
other duplicative inventories as additional inventory and service part
facilities are consolidated, in accordance with management's integration and
consolidation plan, along with certain vendor purchase commitments assumed in
the Vanstar merger for which there is no future economic benefit for the
combined company. Cash requirements related to the purchase commitments of
$14.0 million in 1999 and $20.0 million in 2000 will be paid from the Company's
revolving credit facility. As of September 25, 1999, $58.9 million in losses on
the liquidation of certain duplicative inventories and vendor purchase
commitments, including losses on the disposal of duplicative inventories and
service parts, have been charged against the inventory reserve. The remaining
inventory reserve balance of $27.2 million which was established for these
estimated losses, is reflected as a contra-asset to inventory on the Company's
balance sheet dated September 25, 1999. The

                                       9
<PAGE>
                         INACOM CORP. AND SUBSIDIARIES

      NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

                                  (UNAUDITED)

8.  RESTRUCTURING AND UNUSUAL CHARGES (CONTINUED)

Company estimates that all liquidation and disposal activities for duplicative
inventory and service parts will be completed by the end of 1999 after all
inventory and service part facilities are consolidated.

    Integration costs associated with the merger of $23.0 million, which were
paid by March 27, 1999, include the costs incurred by the Company to effect the
Vanstar merger and to integrate the continuing operations of the combined
companies. The costs consist of the expense of furnishing information to
stockholders, fees of certain integration consultants, and expenses related to
the service of certain employees. These costs include both first quarter 1999
costs and previously deferred costs recognized upon consummation of the merger
with Vanstar.

    During the third and fourth quarter of 1998, the Company recognized unusual
charges totaling $33.3 million, of which $30.3 million was reflected in selling,
general and administrative expenses and $3.0 million was reflected in direct
costs. Of these $33.3 million in unusual charges, $27.2 million was recognized
in selling, general, and administrative expenses in the third quarter of 1998,
of which $21.5 million was reflected in the products segment and $5.7 million
was reflected in the services segment. The $33.3 million in unusual charges
consist primarily of the write-off of certain equipment and capitalized
software, costs to liquidate excess spare parts and certain inventory
adjustments. Capitalized software and lease costs of $9.0 million include the
write-off of systems associated with the centralized dispatch and scheduling
functions and obsolete hardware and software due to the upgrade of call
technology implemented by the Company. The Company also liquidated excess spare
parts due to the centralization of its spare parts management and the
outsourcing of a substantial portion of its spare parts procurement and repair
to a single vendor resulting in a net charge of $16.5 million. Inventory
adjustments of $5.4 million include costs associated with the early return of
certain inventory items to a major vendor in an effort to reduce interest
expense and additional inventory reserves to record inventory at lower of cost
or market due to the reduced price protection available from major vendors as
part of the supply chain reengineering. Other items of $2.4 million consist
primarily of the incentive pay to retain certain employees during the
restructuring activities and costs associated with the termination of certain
marketing commitments.

                                       10
<PAGE>
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    THIS REPORT ON FORM 10-Q CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS AND
INFORMATION RELATING TO INACOM THAT ARE BASED ON THE BELIEFS OF INACOM
MANAGEMENT AS WELL AS ASSUMPTIONS MADE BY AND INFORMATION CURRENTLY AVAILABLE TO
INACOM MANAGEMENT. SUCH STATEMENTS REFLECT THE CURRENT VIEW OF INACOM WITH
RESPECT TO FUTURE EVENTS AND ARE SUBJECT TO CERTAIN RISKS, UNCERTAINTIES AND
ASSUMPTIONS, INCLUDING THE CERTAIN BUSINESS FACTORS DESCRIBED IN INACOM'S ANNUAL
REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 26, 1998. SHOULD ONE OR MORE OF
SUCH RISKS OR UNCERTAINTIES MATERIALIZE, OR SHOULD UNDERLYING ASSUMPTIONS PROVE
INCORRECT, ACTUAL RESULTS MAY VARY MATERIALLY FROM THOSE DESCRIBED HEREIN AS
BELIEVED, ESTIMATED OR EXPECTED.

RESULTS OF OPERATIONS

    The following tables set forth, for the indicated periods, revenues, gross
margins, and net earnings (loss) before distributions on convertible preferred
securities of trust and the mix of revenues, gross margins, and net earnings
(loss) before distributions on convertible preferred securities of trust for
each of the Company's operating segments.

                          SUMMARY OF OPERATING RESULTS
                             (DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                  THIRTEEN WEEKS ENDED
                                            -----------------------------------------------------------------
                                            SEPTEMBER 25,    SEPTEMBER 26,    SEPTEMBER 25,    SEPTEMBER 26,
                                                 1999           1998(1)            1999           1998(1)
                                            --------------   --------------   --------------   --------------
<S>                                         <C>              <C>              <C>              <C>
Revenues:
  Products................................    $1,342,280       $1,433,414           86.8%            86.4%
  Services................................       203,330          224,702           13.2             13.6
                                              ----------       ----------         ------           ------
    Total.................................    $1,545,610       $1,658,116          100.0%           100.0%
                                              ==========       ==========         ======           ======
Gross margin:
  Products................................    $  111,497       $   98,385           58.0%            52.4%
  Services................................        80,872           89,214           42.0             47.6
                                              ----------       ----------         ------           ------
    Total.................................    $  192,369       $  187,599          100.0%           100.0%
                                              ==========       ==========         ======           ======
Earnings (loss) before distributions on
 convertible preferred securities of
 trust:
  Products................................    $    6,132       $  (16,040)          65.6%             N/A
  Services................................         3,210            5,382           34.4              N/A
                                              ----------       ----------         ------           ------
    Total.................................    $    9,342       $  (10,658)         100.0%             N/A
                                              ==========       ==========         ======           ======
</TABLE>

                                       11
<PAGE>

<TABLE>
<CAPTION>
                                                                 THIRTY-NINE WEEKS ENDED
                                            -----------------------------------------------------------------
                                            SEPTEMBER 25,    SEPTEMBER 26,    SEPTEMBER 25,    SEPTEMBER 26,
                                               1999(2)          1998(1)          1999(2)          1998(1)
                                            --------------   --------------   --------------   --------------
<S>                                         <C>              <C>              <C>              <C>
Revenues:
  Products................................    $3,758,061       $4,528,207           86.0%            87.6%
  Services................................       609,430          643,184           14.0             12.4
                                              ----------       ----------         ------           ------
    Total.................................    $4,367,491       $5,171,391          100.0%           100.0%
                                              ==========       ==========         ======           ======
Gross margin:
  Products................................    $  245,973       $  314,557           56.9%            55.4%
  Services................................       186,154          253,296           43.1             44.6
                                              ----------       ----------         ------           ------
    Total.................................    $  432,127       $  567,853          100.0%           100.0%
                                              ==========       ==========         ======           ======
Earnings (loss) before distributions on
 convertible preferred securities of
 trust:
  Products................................    $  (90,468)      $    7,938           70.6%            35.4%
  Services................................       (37,700)          14,456           29.4             64.6
                                              ----------       ----------         ------           ------
    Total.................................    $ (128,168)      $   22,394          100.0%           100.0%
                                              ==========       ==========         ======           ======
</TABLE>

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

(1) Earnings (loss) before distributions on convertible preferred securities of
    trust includes the impact of $27.2 million after tax in unusual charges, of
    which $21.5 million is in products and $5.7 million is in services.

(2) Gross margin includes the impact of $86.1 million in unusual charges, of
    which $46.5 million is in products and $39.6 million is in services.
    Earnings (loss) before distributions on convertible preferred securities of
    trust includes the impact of $139.6 million after tax in restructuring and
    unusual charges, of which $101.7 million is in products and $37.9 million is
    in services.

    The following table sets forth for the indicated periods the gross margin
percentage of the two operating segments and the consolidated gross margin
percentage of the Company.

<TABLE>
<CAPTION>
                                                 THIRTEEN WEEKS ENDED             THIRTY-NINE WEEKS ENDED
                                            -------------------------------   -------------------------------
                                            SEPTEMBER 25,    SEPTEMBER 26,    SEPTEMBER 25,    SEPTEMBER 26,
                                                 1999             1998           1999(1)            1998
                                            --------------   --------------   --------------   --------------
<S>                                         <C>              <C>              <C>              <C>
Gross margin:
  Products................................        8.3%             6.9%             6.5%             6.9%
  Services................................       39.8             39.7             30.5             39.4
    Consolidated gross margin.............       12.4%            11.3%             9.9%            11.0%
</TABLE>

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

(1) Gross margin includes the impact of $86.1 million in unusual charges, of
    which $46.5 million is in products and $39.6 million is in services.

REVENUES

    Revenues for the third quarter and the first nine months of 1999 decreased
$112.5 million or 6.8% and $803.9 million or 15.5% over the third quarter and
first nine months of 1998, respectively. The decrease in revenues resulted from
a decline in both business segments. Product revenues for the third quarter and
the first nine months of 1999 decreased $91.1 million or 6.4% and
$770.1 million or 17.0%, respectively, when compared to the same periods in
1998. Services revenues for the third quarter and the first nine months of 1999
decreased $21.4 million or 9.5% and $33.8 million or 5.2%, respectively, when
compared to the same periods in 1998.

                                       12
<PAGE>
    In the third quarter of 1999, product revenues decreased primarily as a
result of weak market conditions as customers reduced their purchases until the
effects of the year 2000 computer rollover ("Y2K") are known. Product revenues
for the first nine months of 1999 decreased as a result of the weak market
conditions including the Y2K effect mentioned above along with reduced sales
momentum during the pendency of the merger with Vanstar. Product revenues
through the client direct side of the business decreased $65.3 million or 6.5%
and $266.2 million or 8.5% in the third quarter and the first nine months of
1999 compared to the third quarter and the first nine months of 1998,
respectively. This decrease was primarily a result of the factors mentioned
above. Product revenues through the independent dealer channel decreased
$25.8 million or 6.1% and $503.9 million or 35.8% in the third quarter and the
first nine months of 1999 compared to the third quarter and the first nine
months of 1998, respectively. Market conditions, including increased pricing
pressures in the independent dealer channel and the factors mentioned above,
contributed to the decline in the independent dealer channel. Furthermore, with
the decrease in inventory levels and the decrease in manufacturer funded
programs and incentives in the third quarter and the first nine months of 1999
compared to the third quarter and the first nine months of 1998, the Company
continued to focus on more profitable distribution opportunities rather than the
high-volume, lower-margin side of the distribution business. In the third
quarter of 1999, the Company's product revenue through the independent dealer
channel began to improve over the previous quarters of 1999 as the Company
increased business under the Compaq Computer Corporation's North American
Distributor Alliance Program.

    In the third quarter of 1999, revenues for services decreased as customers
reduced projects until the effects of Y2K are known. In the first nine months of
1999, revenues from services decreased as a result of the weak market conditions
including the Y2K effect mentioned above along with reduced sales momentum
during the pendency of the merger with Vanstar. The decline in product revenues
also contributed to the decline for services sold with those products in the
third quarter and the first nine months of 1999.

GROSS MARGINS

    The Company's consolidated gross margin percentage increased in the third
quarter of 1999 compared to the same period in 1998. This increase was primarily
due to an improvement in the gross margin percentage on products. The gross
margin percentage on products increased in the third quarter of 1999 compared to
the third quarter of 1998 primarily due to the realization of merger-related
synergies and cost savings, which result from the leveraging of the combined
Company's strength. The gross margin percentage on services was approximately
the same in the third quarter of 1999 compared to the third quarter of 1998.

    The Company's consolidated gross margin percentage decreased in the first
nine months of 1999 compared to the same period in 1998. This decrease was due
to $86.1 million in unusual charges recognized by the Company in the first
quarter of 1999 that were reflected in direct costs (see "Restructuring and
Unusual Charges"). Excluding these unusual charges, the Company's consolidated
gross margin percentage increased to 11.9% in the first nine months of 1999
compared to 11.0% in the first nine months of 1998. This increase was primarily
due to a change in the mix of revenues to include more of the higher-margin
services and an improvement in the gross margin percentage on products due to
the mix of product revenues to include more of the higher-margin client direct
revenues versus lower-margin independent dealer revenues and the realization of
merger-related synergies and cost savings. This increase was partially offset by
a decline in the gross margin percentage on services in the first nine months of
1999 compared to the first nine months of 1998.

    The gross margin percentage on products decreased in the first nine months
of 1999 compared to the first nine months of 1998 due to $46.5 million in
unusual charges recognized by the Company in the first quarter of 1999 that were
reflected in the direct costs of products (see "Restructuring and Unusual
Charges"). Excluding these unusual charges, the gross margin percentage on
products increased to 7.8% in the first nine months of 1999 compared to 6.9% in
the first nine months of 1998. This increase was

                                       13
<PAGE>
primarily due to a change in the mix of product revenues to include more of the
higher-margin client direct revenues versus lower-margin independent dealer
revenues and the realization of merger-related synergies and cost savings.

    The gross margin percentage on services decreased in the first nine months
of 1999 compared to the first nine months of 1998 primarily due to
$39.6 million in unusual charges recognized by the Company in the first quarter
of 1999 that were reflected in the direct costs of services (see "Restructuring
and Unusual Charges"). Excluding these unusual charges, the gross margin
percentage on services decreased to 37.0% in the first nine months of 1999
compared to 39.4% in the first nine months of 1998. This decrease was primarily
due to a shortfall in services revenues that resulted in higher direct labor
costs as a percentage of revenues. This decrease was partially offset by the
adjustment of the services work force that started during the second quarter of
1999.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

    Selling, general and administrative (SG&A) expenses in the third quarter of
1999 decreased $20.4 million or 11.0% compared to the third quarter of 1998.
SG&A as a percent of revenues decreased to 10.7% in the third quarter of 1999
compared to 11.2% in the third quarter of 1998. This decrease was due to
$27.2 million in unusual charges recognized by the Company in the third quarter
of 1998 (see "Restructuring and Unusual Charges"). Excluding these unusual
charges, SG&A expenses in the third quarter of 1999 increased $6.8 million or
4.3% compared to the third quarter of 1998 and SG&A as a percentage of revenues
increased to 10.7% in the third quarter of 1999 compared to 9.6% in the third
quarter of 1998. The increase in SG&A as a percentage of revenues was partially
due to the shortfall in revenues along with an increase in spending. SG&A
expenses were higher due to the Company's decision to accelerate integration
projects in the third quarter of 1999 including the conversion of information
technology systems and the upgrading of the Company's Indianapolis distribution
and customization facility. SG&A expenses also increased due to e-business
initiatives, reduced vendor floor planning support for resellers, compensation
adjustments made during the quarter, and increased usage of contract labor.

    SG&A expenses in the first nine months of 1999 increased $15.9 million or
3.3% compared to the first nine months of 1998. SG&A as a percent of revenues
increased to 11.3% in the first nine months of 1999 compared to 9.2% in the
first nine months of 1998. Excluding unusual charges of $27.0 million recognized
in the first quarter of 1999 and unusual charges of $27.2 million recognized in
the third quarter of 1998 (see "Restructuring and Unusual Charges"), SG&A
expenses in the first nine months of 1999 increased $16.1 million or 3.6%
compared to the first nine months of 1998. SG&A as a percent of revenues
increased to 10.6% in the first nine months of 1999 compared to 8.7% in the
first nine months of 1998. The increase in SG&A as a percentage of revenues was
partially due to the shortfall in revenues along with the increase in spending
in the third quarter of 1999 as mentioned above.

RESTRUCTURING AND UNUSUAL CHARGES

    In conjunction with the merger of InaCom and Vanstar along with the
Company's efforts to address current market conditions, the Company recognized
previously announced restructuring and other unusual charges during the first
quarter of 1999. These charges include items presented as restructuring costs as
defined by Emerging Issues Task Force 94-3 and other unusual charges. The
restructuring charges are in conjunction with the Company's previously announced
plans to integrate and consolidate operations of InaCom and Vanstar following
the February 17, 1999 merger. The restructuring and unusual pre-tax charges
totaled $217.0 million, of which $75.9 million will not require cash payments
and include charges for duplicate fixed assets and duplicate inventory
(including service parts). The remaining $141.1 million will require cash
payments to be made for termination fees upon the closure of duplicate leased
facilities, to employees for severance, for contract terminations and vendor
purchase commitments, and for other direct costs related to the merger with
Vanstar.

                                       14
<PAGE>
    RESTRUCTURING CHARGES

    Restructuring charges of $103.9 million include the cost of involuntary
employee separation benefits, leased facility closures and consolidations,
losses on abandonment or disposal of leasehold improvements and equipment,
termination of certain contracts and agreements, and professional fees
associated with the merger. Employee separation benefits of $33.6 million
include amounts to be paid for severance, medical, and other benefits for 1,340
permanent full-time employees that will be severed in accordance with
management's integration and consolidation plan. As of September 25, 1999, 1,116
employees had been severed and $26.9 million in separation benefits had been
paid and subsequently charged against the separation benefits reserve. The
Company estimates all separation activities to be completed by the end of 1999.

    Duplicate leased facility closure and consolidation costs of $47.5 million
include amounts to be paid for lease termination fees, losses on abandonment or
disposal of leasehold improvements, equipment, and capitalized software, net of
estimated disposal values in accordance with management's integration and
consolidation plan. As of September 25, 1999, 86 leases have been terminated and
$10.4 million in lease termination fees have been paid and subsequently charged
against the facility closure and consolidation reserve along with $6.6 million
in losses on the abandonment and disposal of leasehold improvements, equipment,
and capitalized software. The Company estimates all facility closures and
consolidations will be completed by the end of 1999.

    Termination costs for certain contracts and agreements of $8.2 million
include the fees to be paid upon the termination and cancellation of contracts
and agreements pursuant to management's integration and consolidation plan.
Other direct costs related to the merger of $14.6 million include fees paid to
financial advisors, legal counsel, and independent auditors. As of September 25,
1999, $22.8 million had been paid pursuant to the termination of contracts and
agreements and to financial advisors, legal counsel, and independent auditors.

    Reserves accrued for the restructuring charges are reflected as an increase
in current liabilities on the Company's balance sheet dated September 25, 1999.
As of September 25, 1999 the restructuring charges reserve had a balance of
$37.2 million, which includes provision amounts of $103.9 million less charges
to the reserve of $66.7 million.

    UNUSUAL CHARGES

    Unusual charges of $113.1 million not presented as restructuring charges are
reflected in direct costs ($86.1 million) and selling, general, and
administrative expenses ($27.0 million). In direct costs, the unusual charges
are reflected in the products segment ($46.5 million) and the services segment
($39.6 million). In selling, general, and administrative expenses, the unusual
charges are reflected in the products segment ($23.0 million) and the services
segment ($4.0 million). The unusual charges include non-cash charges primarily
related to the losses incurred on liquidating certain duplicative inventories
(including service parts) and $4.0 million to record estimated losses on the
collection of certain trade accounts in conjunction with the recent developments
regarding such accounts. The unusual charges also include cash charges related
to certain vendor purchase commitments and other integration costs associated
with merger activities.

    Losses on the liquidation of certain duplicative inventories and vendor
purchase commitments of $86.1 million include losses on the disposal of
duplicative inventories and service parts of $43.6 million. Additional charges
of $42.5 million include the estimated losses to be realized on the disposal of
other duplicative inventories as additional inventory and service part
facilities are consolidated, in accordance with management's integration and
consolidation plan, along with certain vendor purchase commitments assumed in
the Vanstar merger for which there is no future economic benefit for the
combined company. Cash requirements related to the purchase commitments of
$14.0 million in 1999 and $20.0 million in 2000 will be paid from the Company's
revolving credit facility. As of September 25, 1999, $58.9 million in losses

                                       15
<PAGE>
on the liquidation of certain duplicative inventories and vendor purchase
commitments, including losses on the disposal of duplicative inventories and
service parts, have been charged against the inventory reserve. The remaining
inventory reserve balance of $27.2 million which was established for these
estimated losses, is reflected as a contra-asset to inventory on the Company's
balance sheet dated September 25, 1999. The Company estimates that all
liquidation and disposal activities for duplicative inventory and service parts
will be completed by the end of 1999 after all inventory and service part
facilities are consolidated.

    Integration costs associated with the merger of $23.0 million, which were
paid by March 27, 1999, include the costs incurred by the Company to effect the
Vanstar merger and to integrate the continuing operations of the combined
companies. The costs consist of the expense of furnishing information to
stockholders, fees of certain integration consultants, and expenses related to
the service of certain employees. These costs include both first quarter 1999
costs and previously deferred costs recognized upon consummation of the merger
with Vanstar.

    During the third and fourth quarter of 1998, the Company recognized unusual
charges totaling $33.3 million, of which $30.3 million was reflected in selling,
general and administrative expenses and $3.0 million was reflected in direct
costs. Of these $33.3 million in unusual charges, $27.2 million was recognized
in selling, general, and administrative expenses in the third quarter of 1998,
of which $21.5 million was reflected in the products segment and $5.7 million
was reflected in the services segment. The $33.3 million in unusual charges
consist primarily of the write-off of certain equipment and capitalized
software, costs to liquidate excess spare parts and certain inventory
adjustments. Capitalized software and lease costs of $9.0 million include the
write-off of systems associated with the centralized dispatch and scheduling
functions and obsolete hardware and software due to the upgrade of call
technology implemented by the Company. The Company also liquidated excess spare
parts due to the centralization of its spare parts management and the
outsourcing of a substantial portion of its spare parts procurement and repair
to a single vendor resulting in a net charge of $16.5 million. Inventory
adjustments of $5.4 million include costs associated with the early return of
certain inventory items to a major vendor in an effort to reduce interest
expense and additional inventory reserves to record inventory at lower of cost
or market due to the reduced price protection available from major vendors as
part of the supply chain reengineering. Other items of $2.4 million consist
primarily of the incentive pay to retain certain employees during the
restructuring activities and costs associated with the termination of certain
marketing commitments.

FINANCING EXPENSE

    Financing expense was $11.6 million and $35.2 million in the third quarter
and the first nine months of 1999, respectively, versus $16.8 million and
$52.8 million in the third quarter and the first nine months of 1998,
respectively. Financing expense in the third quarter and the first nine months
of 1999 decreased when compared to the same periods in 1998 primarily as a
result of lower borrowings. The decrease in borrowings resulted from a reduction
in inventory levels and an increase in accounts payable levels.

DISTRIBUTION ON CONVERTIBLE PREFERRED SECURITIES OF TRUST, NET OF TAX

    In October 1996, the Vanstar Financing Trust (the "Trust"), a special
purpose financing trust formed by Vanstar, issued 4,025,000 6 3/4% trust
convertible preferred securities. Distributions on the convertible preferred
securities accrue at an annual rate of 6 3/4% of the liquidation value of $50
per security ($201,250,000 in the aggregate) and are included in "Distributions
on convertible preferred securities of trust, net of income taxes" in the
Consolidated Statements of Operations. The distributions on the convertible
preferred securities of the trust, net of income taxes, totaled $2.2 million in
the third quarter of 1999 and 1998 and $6.7 million in the first nine months of
1999 and 1998.

                                       16
<PAGE>
NET EARNINGS (LOSS)

    Net earnings (loss) are reported after giving effect to the distributions on
convertible preferred securities of trust. Net earnings for the third quarter of
1999 were $7.1 million, or $0.15 per diluted share, compared to the net loss for
the third quarter of 1998 of $12.9 million, or $0.29 per diluted share.
Excluding the unusual charges recognized in the third quarter of 1998 of
$27.2 million after tax (see "Restructuring and Unusual Charges"), the net
earnings for the third quarter of 1998 were $14.3 million, or $0.31 per diluted
share. Excluding unusual charges in the third quarter of 1998, the decrease in
net earnings in the third quarter of 1999 compared to the same quarter of 1998
resulted from the factors discussed above.

    Including the impact of the restructuring and unusual charges recorded by
the Company in the first quarter of 1999 and unusual charges recorded by the
Company in the third quarter of 1998 (see "Restructuring and Unusual Charges"),
the net loss for the first nine months of 1999 was $134.9 million, or $2.98 per
diluted share, compared to a net earnings for the first nine months of 1998 of
$15.7 million, or $0.36 per diluted share. Excluding the restructuring and
unusual charges of $139.6 million after tax recognized in the first quarter of
1999 and unusual charges of $27.2 million after tax recognized in the third
quarter of 1998, net earnings for the first nine months of 1999 was
$4.7 million, or $0.10 per diluted share, compared to net earnings for the first
nine months of 1998 of $42.9 million, or $0.94 per diluted share. The decrease
resulted from the factors discussed above.

LIQUIDITY AND CAPITAL RESOURCES

    The Company's primary sources of liquidity are provided through a
$450.0 million revolving credit and amortizing term loan facility with Deutsche
Bank, as agent, and a $350.0 million asset securitization program with Nesbitt
Burns Securities, Inc., as agent. The Company's capital resources also include
$201.3 million in Company-obligated mandatorily redeemable convertible preferred
securities of a subsidiary trust holding solely convertible subordinated debt
securities of the Company. The Company also maintains a floor planning facility
for IBM product purchases with IBMCC and a floor planning facility for Compaq
product purchases with Deutsche Financial Services Corporation.

    In April 1999, the Company entered into a $450.0 million revolving credit
and amortizing term loan facility with Deutsche Bank, as agent. This new
facility is a combined senior secured $250.0 million revolving credit facility
and $200.0 million amortizing term loan. On September 25, 1999, $385.0 million
was outstanding under the facility, of which $210.0 million was outstanding
under the revolving credit portion and $175.0 million was outstanding under the
amortizing term loan portion, at an interest rate of 7.7%.

    In December 1996, the Company established an asset securitization facility,
which was amended in May 1999 to provide the Company with up to $300.0 million
in available credit. This amount was increased to $350.0 million in July 1999.
Pursuant to this asset securitization facility, the Company, through a wholly-
owned subsidiary, sells an undivided percentage ownership interest in certain
pooled trade accounts receivable. As of September 25, 1999, the gross proceeds
resulting from the sale of the percentage ownership interests in the pooled
trade accounts receivable totaled $320.0 million. On September 25, 1999, the
implicit interest rate on the trade accounts receivable sale transaction was
5.9%.

    In October 1996, the Company's subsidiary trust issued certain preferred
securities, raising gross proceeds of $201.3 million. The holders of the
preferred securities are entitled to cumulative cash distributions at an annual
rate of 6 3/4% of the liquidation amount of $50 per security. The distributions
are payable quarterly in arrears in the aggregate amount of approximately
$3.5 million per quarter. The aggregate net proceeds to the Company from this
offering totaled $194.4 million after selling expenses, discounts, and
commissions. The preferred securities are convertible at the option of the
holder into InaCom common stock at a conversion rate of 1.113 shares of InaCom
common stock for each preferred security (equivalent to a conversion price of
$44.92 per share).

                                       17
<PAGE>
    The Company's credit facilities contain certain restrictive covenants,
including the maintenance of minimum levels of working capital and net worth,
limitations on the amount of funded debt and interest expense, limitations on
incurring additional indebtedness, and restrictions on the amount of dividends
the Company can pay to stockholders. As of September 25, 1999, the Company was
in compliance with the covenants contained in these agreements.

    The Company occasionally uses derivative financial instruments to limit the
effect of increases in the interest rates on certain floating-rate debt. The
Company does not hold or issue derivative financial instruments for trading
purposes. As of September 25, 1999, the Company had two separate interest rate
swap agreements each for an aggregate notional amount of $100 million with
unrelated financial institutions, which were entered into in November 1998 and
January 1999, and resulted in certain floating-rate interest payment obligations
becoming fixed-rate interest payment obligations at 4.7% and 5.0%, respectively.
The November 1998 interest rate swap is a four-year agreement with a call
provision at the provider's option after three years. The January 1999 interest
rate swap agreement is a three-year agreement with a call provision at the
provider's option after two years. A separate interest rate swap agreement for
an aggregate notional amount of $100 million with an unrelated financial
institution, which was entered into in September 1998, and resulted in certain
floating-rate interest payment obligations becoming fixed-rate interest payment
obligations at 5.2%, expired in August 1999. As a result of the above-mentioned
swap agreements, financing expense decreased approximately $0.1 million in the
third quarter and the first nine months of 1999.

    During the first nine months of 1999, the Company generated $208.2 million
of cash from operations. An increase in accounts payable increased cash from
operations by $157.8 million during the first nine months of 1999 with a portion
of the increase offset by an increase in inventory which decreased cash from
operation by $6.0 million. An increase in accounts receivable, excluding the
effects of the sales under the asset securitization programs, decreased cash
flow from operations by $8.1 million. A decrease in accrued and other
liabilities decreased cash from operations by $15.7 million while a decrease in
prepaid expenses and other assets increased cash flow from operations by $13.8
million.

    The Company used $132.1 million in cash for investing activities in the
first nine months of 1999. Cash of $68.8 million was used to make payments
associated with restructuring and unusual charges, cash of $47.7 million was
used to purchase fixtures and equipment, cash of $8.6 million was used for
business combinations including contingent payments on prior years' business
combinations, and cash of $7.0 million was used for additions to other assets.

    Net cash used in financing activities in the first nine months of 1999
totaled $87.1 million. $141.5 million was used to repurchase the Company's
convertible subordinated debentures, $86.0 million was used to reduce amounts
outstanding under the asset securitization programs, $28.5 million was used to
pay the current portion of long-term debt, $26.5 million was used to reduce
amounts outstanding under the revolving credit and working capital facilities,
and $8.8 million was used to pay debt issuance costs associated with the new
revolving credit and amortizing term loan facility. This was partially offset by
$200.0 million in proceeds from the amortizing term loan facility and
$4.2 million in cash provided by the issuance of stock under employee stock
plans.

    The Company believes the funding expected to be generated from operations
and provided by the credit facilities existing on September 25, 1999 will be
sufficient to meet working capital and capital investment needs in 1999.

YEAR 2000

    The Company began preparing its computer-based systems for year 2000 ("Y2K")
computer software compliance issues in 1996. Historically, certain computer
programs were written using two digits rather than four to define the applicable
year. As a result, software may recognize a date using the two digits "00" as
1900 rather than the year 2000. Computer programs that do not recognize the
proper date could

                                       18
<PAGE>
generate erroneous data or cause systems to fail. The Company's Y2K project
covers both traditional computer systems and infrastructure ("IT Systems") and
computer-based hardware and software, facilities and equipment ("Non-IT
Systems"). The Company's Y2K project has six phases: inventory, assessment,
renovation, testing, implementation and contingency planning.

    The Company completed the remediation of its critical business systems
during the fourth quarter of 1998. The Company completed the testing and
implementation of its non-critical business systems during the third quarter of
1999. The Company replaced non-compliant systems acquired during its merger with
Vanstar during the third quarter of 1999. During the third quarter of 1999 the
Company also completed the testing and implementation of its Non-IT Systems,
which are primarily located at its distribution centers and office locations.

    The Company's Y2K project also considers the readiness of significant
customers and vendors. Such significant vendors have indicated to the Company an
expectation to be Y2K compliant. However, the non-compliance of such vendors
could impair the ability of the Company to obtain necessary products or to sell
or provide services to its customers. Disruptions of the computer systems of the
Company's vendors could have a material adverse effect on the Company's
financial conditions and results of operations for the period of such
disruption.

    The Company believes that the most reasonably likely worst case Y2K scenario
is that a small number of vendors will be unable to supply components for a
short time after January 1, 2000, with a resulting disruption of product
shipments and services to the Company's customers. As part of its Y2K process,
the Company has developed contingency plans with respect to such a scenario and
the vendors who are either unable or unwilling to develop remediation plans to
become Y2K compliant. The Company's contingency plans contain a combination of
actions including increasing inventory levels of products and components and
selective resourcing of business to Y2K compliant vendors.

    The Company had incurred approximately $6.2 million of Y2K project expenses
as of September 25, 1999. Future expenses are estimated to include approximately
$0.2 million of additional costs. Such cost estimates are based upon presently
available information and may change as the Company continues with its Y2K
project.

                                       19
<PAGE>
                         INACOM CORP. AND SUBSIDIARIES
                                    PART II
                               OTHER INFORMATION

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

    (a) Exhibits.

<TABLE>
    <C>       <S>
     27       Financial Data Schedule
</TABLE>

    (b) Reports on Form 8-K. No reports on Form 8-K were filed during the
       quarter ended September 25, 1999.

                                       20
<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 and by the
undersigned hereunto duly authorized.

<TABLE>
<S>                                                    <C>  <C>
                                                       INACOM CORP.

                                                       By:            /s/ David C. Guenthner
                                                            -----------------------------------------
                                                                       David C. Guenthner
                                                                   EXECUTIVE VICE PRESIDENT AND
                                                                     CHIEF FINANCIAL OFFICER
</TABLE>

Dated this 9th day of November, 1999.

                                       21