<PAGE>

                                    FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   (Mark One)
             [ x ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

                 FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 1999

                                       OR

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

         for the transition period from _____________ to _______________

                         Commission File Number: 0-20730

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

           DELAWARE                                    06-1192793
(State or other jurisdiction of          (I.R.S. Employer Identification Number)
 incorporation or organization)

               535 CONNECTICUT AVENUE, NORWALK, CONNECTICUT 06854
                    (Address of principal executive offices)

                                 (203) 899-4000
              (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 |_|

Indicate the number of shares outstanding of each of issuer's class of common
stock as of the latest practicable date:

CLASS: COMMON STOCK             OUTSTANDING SHARES AT APRIL 30, 1999: 35,785,610
<PAGE>

                              MICRO WAREHOUSE, INC.

                                      INDEX

                                                                            Page
PART I - FINANCIAL INFORMATION

  Item 1 - Financial Statements

    Consolidated Balance Sheets ...............................................3

    Consolidated Statements of Income .........................................4

    Consolidated Statements of Cash Flows .....................................5

    Notes to Consolidated Financial Statements ................................6

  Item 2 - Management's Discussion and Analysis of Financial Condition
                and Results of Operations .....................................7

  Item 3 - Quantitative and Qualitative Disclosures About Market Risk.........16

PART II - OTHER INFORMATION...................................................18

SIGNATURE ....................................................................19

INDEX TO EXHIBITS.............................................................20


                                       2
<PAGE>

PART I - FINANCIAL INFORMATION

ITEM 1 - FINANCIAL STATEMENTS

                              MICRO WAREHOUSE, INC.
                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)
                           ---------------------------

<TABLE>
<CAPTION>
                                                                             MARCH 31,   DECEMBER 31,
                                                                               1999         1998
                                                                               ----         ----
<S>                                                                          <C>          <C>      
ASSETS                                                                       (UNAUDITED)  (AUDITED)
Current assets:
  Cash and cash equivalents                                                  $ 104,542    $ 128,035
  Marketable securities at market value                                         61,081       60,520
  Accounts receivable, net of allowance for doubtful accounts ($10,571 and
    $10,943 at March 31, 1999 and December 31, 1998, respectively)             231,930      216,487
  Inventories                                                                  108,749      129,852
  Prepaid expenses and other current assets                                     12,979       14,379
  Tax refunds                                                                   11,958       13,176
  Deferred taxes                                                                16,037       17,666
                                                                             ---------    ---------
     TOTAL CURRENT ASSETS                                                      547,276      580,115
                                                                             ---------    ---------
Property, plant and equipment, net                                              47,868       36,950
Goodwill, net                                                                   42,701       44,444
Non-current deferred taxes                                                       1,453        3,422
Other assets                                                                     1,500        1,599
                                                                             ---------    ---------
     TOTAL ASSETS                                                            $ 640,798    $ 666,530
                                                                             =========    =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable                                                           $ 175,190    $ 208,335
  Accrued expenses                                                              44,478       50,508
  Deferred revenue                                                               7,352        9,144
                                                                             ---------    ---------
     TOTAL LIABILITIES                                                         227,020      267,987

Stockholders' equity:
  Preferred stock, $.01 par value:
    Authorized - 100 shares; none issued                                          --           --
  Series A Junior Participating Preferred Stock, $.01 par value:
   Aaamkkk
    Authorized - 45 shares; none issued                                           --           --
  Common stock, $.01 par value:
    Authorized - 100,000 shares; issued and outstanding; 35,688 and 35,413
      shares at March 31, 1999 and December 31, 1998, respectively                 357          354
  Additional paid-in capital                                                   306,221      299,544
  Deferred compensation                                                         (2,863)      (3,123)
  Retained earnings                                                            122,854      110,568
  Accumulated other comprehensive loss                                         (12,791)      (8,800)
                                                                             ---------    ---------
     TOTAL STOCKHOLDERS' EQUITY                                                413,778      398,543
                                                                             ---------    ---------
     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                              $ 640,798    $ 666,530
                                                                             =========    =========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       3
<PAGE>

                              MICRO WAREHOUSE, INC.
                        CONSOLIDATED STATEMENTS OF INCOME
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                      (IN THOUSANDS, EXCEPT PER SHARE DATA)
           -----------------------------------------------------------
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                            THREE MONTHS ENDED
                                                                 MARCH 31,
                                                             1999         1998
                                                           --------     --------
<S>                                                        <C>          <C>     
NET SALES                                                  $605,358     $551,706

Cost of goods sold                                          511,405      463,345
                                                           --------     --------

    GROSS PROFIT                                             93,953       88,361

Selling, general and administrative expenses                 76,330       73,466
                                                           --------     --------

    INCOME FROM OPERATIONS BEFORE INTEREST AND
      INCOME TAXES                                           17,623       14,895

Interest income, net                                          2,519        1,374
                                                           --------     --------

    INCOME BEFORE INCOME TAXES                               20,142       16,269

Income tax provision                                          7,856        6,507
                                                           --------     --------

    NET INCOME                                             $ 12,286     $  9,762
                                                           ========     ========

BASIC NET INCOME PER SHARE                                 $   0.35     $   0.28
                                                           ========     ========

DILUTED NET INCOME PER SHARE                               $   0.34     $   0.28
                                                           ========     ========

Shares used in per share calculation -
          Basic                                              35,547       34,600
                                                           ========     ========

          Diluted                                            36,603       34,662
                                                           ========     ========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       4
<PAGE>

                              MICRO WAREHOUSE, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
                                 (IN THOUSANDS)
               --------------------------------------------------
                                   (UNAUDITED)

<TABLE>
<CAPTION>
CASH FLOWS FROM OPERATING ACTIVITIES:                                        1999         1998
                                                                             ----         ----
<S>                                                                        <C>          <C>      
   NET INCOME                                                              $  12,286    $   9,762
                                                                           ---------    ---------
   Adjustments to reconcile net income to net cash (used) provided by 
     operating activities:
        Depreciation and amortization                                          4,162        3,395
        Non-cash compensation                                                    260          276
        Deferred taxes                                                         3,598        3,936
   Changes in assets and liabilities:
        Accounts receivable, net                                             (20,685)     (15,526)
        Inventories                                                           19,526       43,466
        Prepaid expenses and other current assets                              2,423       (2,566)
        Accounts payable                                                     (29,297)        (854)
        Accrued expenses                                                      (3,743)        (271)
        Deferred revenue                                                      (1,801)       3,163
        Other                                                                    (15)         239
                                                                           ---------    ---------
            TOTAL ADJUSTMENTS                                                (25,572)      35,258
                                                                           ---------    ---------
           NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES                  (13,286)      45,020
                                                                           ---------    ---------

CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of marketable securities, net                                      (548)        (244)
   Acquisition of property, plant and equipment                              (15,119)      (2,861)
                                                                           ---------    ---------
NET CASH USED BY INVESTING ACTIVITIES                                        (15,667)      (3,105)
                                                                           ---------    ---------

CASH FLOWS FROM FINANCING ACTIVITIES:
   Net proceeds from issuance of common stock                                  6,680          251
   Repayments under lines of credit, net                                        --        (12,584)
   Principal payments of obligations under capital leases                       --           (164)
                                                                           ---------    ---------
            NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES                   6,680      (12,497)
                                                                           ---------    ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH                                       (1,220)        (202)
                                                                           ---------    ---------
Net change in cash                                                           (23,493)      29,216
CASH AND CASH EQUIVALENTS:
   Beginning of period                                                       128,035       58,051
                                                                           =========    =========
   End of period                                                           $ 104,542    $  87,267
                                                                           =========    =========
</TABLE>

See accompanying notes to consolidated financial statements.


                                       5
<PAGE>

                              MICRO WAREHOUSE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                             (Amounts in thousands)

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

1.       FINANCIAL STATEMENTS

         The consolidated financial statements include the accounts of Micro
         Warehouse, Inc. and its subsidiaries (the "Company") and have been
         prepared, without audit, pursuant to the rules and regulations of the
         Securities and Exchange Commission. Certain information and footnote 
         disclosures normally included in financial statements prepared in 
         accordance with generally accepted accounting principles have been
         condensed or omitted pursuant to such rules and regulations. Although
         the Company believes that the disclosures are adequate to make the
         information presented not misleading, these financial statements should
         be read in conjunction with the audited financial statements and the
         notes thereto included in the Company's Annual Report on Form 10-K for
         the fiscal year ended December 31, 1998.

         In the opinion of management, the accompanying unaudited consolidated
         financial statements contain all adjustments necessary to present
         fairly the financial position of the Company at March 31, 1999 and the
         results of operations for the three months ended March 31, 1999 and
         1998. Certain reclassifications have been made to conform the prior
         year to the 1999 presentation.

2.       COMPREHENSIVE INCOME (LOSS)

         The components of comprehensive income, net of related tax, for the
         three month period ended March 31, 1999 and 1998 are as follows:

<TABLE>
<CAPTION>
                                                        Three Months Ended
                                                  March 31,            March 31,
                                                     1999                1998
                                                -------------       -------------
<S>                                                <C>                 <C>     
Net income                                         $ 12,286            $  9,762
Unrealized gains on marketable securities                13         
                                                                              6
Foreign currency translation adjustments             (4,004)               (496)
                                                   --------            --------
                                                                    
Comprehensive income                               $  8,295            $  9,272
                                                   ========            ========
</TABLE>

        The components of accumulated other comprehensive loss, net of related
        tax, at March 31, 1999 and December 31, 1998 are as follows:

<TABLE>
<CAPTION>
                                                        March 31,     December 31,
                                                          1999           1998
                                                        --------       --------
<S>                                                     <C>            <C>     
Unrealized gains on marketable securities               $     15       $      2
Foreign currency translation adjustments                 (12,806)        (8,802)
                                                        --------       --------
Accumulated other comprehensive loss                    $(12,791)      $ (8,800)
                                                        ========       ========
</TABLE>


                                       6
<PAGE>

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

OVERVIEW

         We are a $2.2 billion specialty catalog and online retailer and 
direct marketer of brand name personal computers, computer software, 
accessories, peripheral and networking products to commercial and consumer 
customers. We market our products through frequent mailings of our 
distinctive, colorful catalogs and our Internet catalog, discount retail and 
auction sites. Additionally, we employ telemarketing account managers who 
focus on building relationships with corporate, education and government 
accounts. We offer brand name hardware and software from leading vendors such 
as Adobe Systems Inc., Apple Computer Inc., 3Com Corp., Compaq Computer 
Corp., Hewlett-Packard Co., International Business Machines Corp., Iomega 
Corp., Microsoft Corp., Seiko Epson Corp. and Toshiba Corp.

         Through our four core catalogs, Micro Warehouse, Mac Warehouse, Data
Comm Warehouse and Inmac, various specialty catalogs and our Internet sites we
offer a broad assortment of computer products at competitive prices. With
colorful illustrations, concise product descriptions and relevant technical
information, each catalog focuses on a specific segment of the computer market.
The catalogs are recognized as a leading source for computer hardware, software
and other products. During the first quarter of 1999 we distributed
approximately 31.0 million catalogs worldwide, an increase of 4.6% over the
first quarter of 1998.

         In July 1995 we launched our Internet catalog on the World Wide Web 
at Warehouse.com. Product descriptions and prices for more than 20,000 
products are displayed in an online catalog with full information and 
on-screen images available for more than 8,000 products. Selected corporate 
clients can access their own customized online catalogs, complete with unique
product selections and customized pricing. Our European subsidiaries also 
have web sites. In November 1997 we opened a live Internet auction site at 
Webauction.com. The auction site offers a selection of personal computers and 
home electronic products including first-run merchandise, refurbished and 
end-of-life items. Auctions are conducted 24 hours a day, 7 days a week. In 
February 1999 we launched an Internet discount retailer at 
Computersbynet.com. Computersbynet.com offers computer products to customers 
who are prepared to purchase through the Internet using a credit card without 
the need for extensive telephone based customer support. Our Internet sites 
received approximately 102,000 daily visitors in March 1999 and had sales of 
$71.3 million in the three months ended March 31, 1999 compared to $30.2 
million during the three months ended March 31, 1998.

         International operations represented 29% of our sales during the 
first three months of 1999 compared to 30% for the same period in 1998. We 
have full-service, direct marketing operations and publish catalogs in 
Canada, France, Germany, the Netherlands, Sweden and the United Kingdom. 
During the first quarter of 1999 we distributed approximately 5.4 million 
catalogs internationally, a decrease of 10.0% compared to the first quarter 
of 1998.

         We maintain a full-service distribution center in Wilmington, Ohio 
totaling approximately 288,000 square feet and telemarketing centers in 
Lakewood and Gibbsboro, New Jersey and South Norwalk, Connecticut. We also 
maintain telemarketing and distribution facilities in each country in which 
we operate internationally. 

                                       7
<PAGE>

RESULTS OF OPERATIONS

         The table below sets forth certain items expressed as a percent of 
sales for each of the three-month periods ended March 31, 1999 and 1998:

<TABLE>
<CAPTION>
                                                               Three Months

                                                              Ended March 31,

                                                               1999    1998
-------------------------------------------------------------------------------
<S>                                                           <C>     <C>   
Net Sales                                                     100.0%  100.0%
Cost of sales                                                  84.5    84.0
-------------------------------------------------------------------------------
Gross profit                                                   15.5    16.0
Selling, general and administrative expenses                   12.6    13.3
-------------------------------------------------------------------------------
Income from operations before interest and income taxes         2.9     2.7
Interest income, net                                            0.4     0.2
-------------------------------------------------------------------------------
Income before income taxes                                      3.3%    2.9%
===============================================================================
</TABLE>

THREE MONTHS ENDED MARCH 31, 1999 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998

WORLDWIDE SALES

o    Worldwide sales increased $53.7 million or 9.7% to $605.4 million compared
     to $551.7 million during the three months ended March 31, 1998. Our 
     worldwide Wintel sales increased approximately 12% over the same period in
     1998 and our worldwide Mac sales increased approximately 6%. Our Mac
     business represented approximately 34% of our business in 1999, down from
     approximately 35% in the first quarter of 1998.

o    Our average order value was $562, an increase of 6.0% compared to the same
     period in 1998, while our number of orders shipped increased approximately
     2% year over year.

o    As of March 31, 1999, 2.0 million customers had placed orders with us
     during the last twelve months, unchanged from the end of 1998.

     DOMESTIC SALES

o    Domestic sales increased $45.6 million or 11.8% to $431.3 million compared
     to $385.7 million during the three months ended March 31, 1998.

o    Domestic Wintel sales increased approximately 15% from 1998 and domestic
     Mac sales increased approximately 6% from the prior year.

o    Macintosh sales represented approximately 38% of domestic sales, down from
     approximately 40% in the same period last year.

o    Wintel desktop computer sales increased 61% over 1998 and unit volume
     increased 67% over the first quarter of 1998.

o    Wintel notebook sales increased 19% and unit volume increased 20% over the
     first quarter of 1998.


                                       8
<PAGE>

o    Macintosh OS computer sales increased 37% and units increased 69% over the
     first quarter of 1998. Sales of Apple branded computers, including the
     iMac, increased 54% in revenue and 103% in units, more than offsetting a
     decline in sales of most other Macintosh-related products and the
     elimination of Macintosh clones from the marketplace.

o    Our domestic average order value increased 4.3% to $557 compared to $534 in
     the first quarter of 1998 despite a higher percentage of Internet orders
     which have had lower average order values.

     INTERNATIONAL SALES

o    International sales increased $8.1 million or 5.0% to $174.1 million 
     compared to $166.0 million during the first three months of 1998.

o    International Wintel sales for the three months ended March 31, 1999
     increased approximately 5% compared to the first three months of 1998.

o    International Mac sales for the three months ended March 31, 1999 increased
     approximately 4% compared to the first three months of 1998.

o    Macintosh sales represented approximately 22% of international sales, flat
     compared to the same period last year.

     WORLDWIDE INTERNET SALES

o    Our Internet business continued to grow in 1999. Internet sales for the
     three months ended March 31, 1999 increased $41.1 million or 136% to $71.3
     million compared to $30.2 million during the three months ended March 31,
     1998. On a sequential basis, sales increased 10.4% from $64.6 million in
     the fourth quarter of 1998.

o    Internet sales represented 11.8% of worldwide sales and 15.8% of domestic
     sales for the three months ended March 31, 1999 compared to 5.5% of
     worldwide sales and 7.8% of domestic sales for the three months ended March
     31, 1998.

o    In March of 1999 there were approximately 102,000 daily visitors to our
     Internet sites, up 42% from approximately 72,000 in December of 1998.

o    Sales from our Warehouse.com core business Internet site increased $40.5
     million or 168% to $64.6 million compared to $24.1 million during the three
     months ended March 31, 1998. During the quarter, we launched a new 
     commercial Internet site offering custom pricing and product selection
     to our corporate customers.

o    Sales from our newly formed subsidiary, Savebynet.com, were $6.7 million
     for the quarter, comprised of Webauction.com sales of $5.8 million and
     Computersbynet.com sales of $0.9 since its inception in mid-February 1999.
     Sales from Webauction.com were $6.1 million during the three months ended
     March 31, 1998 and $5.6 million in the fourth quarter of 1998.

GROSS PROFIT

o    Gross profit for the three months ended March 31, 1999 increased 6.3% to
     $94.0 million compared to $88.4 million for the three months ended March
     31, 1998. As a percentage of sales, gross profit declined to 15.5% in the
     first quarter of 1999 from 16.4% in the fourth quarter of 1998 and 16.0% in
     the first quarter of 1998.

o    The sequential decline in gross profit percentage was primarily due to
     pricing and promotional strategies for CPUs and memory. The year over year
     decline was primarily due to the same 


                                       9
<PAGE>

     factors as well as a shift in product mix, as CPUs which typically had
     lower than average gross margins grew from 24% to 29% of our domestic
     business. These declines were partially offset by lower inventory-related
     reserves resulting from improved inventory management.

o    Our gross margin may vary on a quarterly basis based upon vendor support
     programs, inventory price protection policies, product mix, pricing
     strategies, market conditions and other factors.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

o    Selling, general and administrative expenses for the three months ended
     March 31, 1999 were $76.3 million, or 12.6% of sales, compared to $73.5
     million or 13.3% of sales for the three months ended March 31, 1998.

o    The percentage decrease was principally due to lower net advertising costs
     which decreased to 0.6% of sales compared to 1.0% in the same period
     last year and lower fulfillment costs.

o    Excluding Year 2000 readiness costs of $1.6 million or $0.03 per share
     incurred during the three months ended March 31, 1999, selling, general and
     administrative expenses were 12.3% of sales.

INCOME FROM OPERATIONS

o    Income from operations for the three months ended March 31, 1999 increased
     18.3% to $17.6 million or 2.9% of sales compared to $14.9 million or 2.7%
     of sales during the three months ended March 31, 1998.

o    Domestic income from operations for the three months ended March 31, 1999
     increased 45.6% to $15.0 million or 3.5% of domestic sales compared to
     $10.3 million or 2.7% of domestic sales for the three months ended March
     31, 1998. The increase from the prior year is primarily due to lower net
     advertising costs and lower overall fulfillment costs, partially offset by
     a reduction in gross margins.

o    International income from operations for the three months ended March 31,
     1999 declined to $2.6 million from $4.6 million during the three months
     ended March 31, 1998. The primary reason for the decline was Year 2000
     readiness costs of $0.8 million and higher overall operating costs.

o    For the three months ended March 31, 1999 Savebynet.com, consisting of 
     the Computersbynet.com division which commenced operations in February 
     1999 and the Webauction.com division, incurred an operating loss of 
     $1.2 million or $0.02 per share. The Webauction.com division incurred an
     operating loss of $0.4 million or $0.01 per share during the first quarter
     of 1998.

NET INTEREST INCOME

o    Net interest income increased 83.3% to $2.5 million for the three months
     ended March 31, 1999 compared to $1.4 million during the three months
     ended March 31, 1998. The principal reason for this increase was the
     higher level of cash, cash equivalents and short-term investments on hand
     during 1999.

INCOME TAXES

o    Our effective income tax rate for the three months ended March 31, 1999 was
     39.0% compared to 40% during the three months ended March 31, 1998.

NET INCOME

o    Net income for the three months ended March 31, 1999 increased 25.9% to
     $12.3 million or $0.34 per share compared to $9.8 million or $0.28 per
     share during the three months ended March 31, 1998.


                                       10
<PAGE>

o    We incurred after-tax charges of $1.0 million or $0.03 per share relating
     to Year 2000 readiness costs during the three months ended March 31, 1999.
     Excluding these charges, net income for the three months ended March 31,
     1999 would have been $13.3 million or $0.36 per share.

LIQUIDITY AND CAPITAL RESOURCES

ASSET MANAGEMENT

o    Cash and marketable securities decreased by $22.9 million to $165.6 million
     at March 31, 1999 compared to $188.6 million at December 31, 1998. The 
     decrease in cash was due primarily to special purchases of inventory at the
     end of 1998 paid for in the first quarter of 1999 resulting in a decrease 
     in accounts payable at March 31, 1999. In addition, capital expenditures 
     were $15.1 million during the quarter.

o    Inventory decreased $21.1 million to $108.7 million at March 31, 1999 
     compared to $129.9 million at December 31, 1998. Annualized inventory turns
     for the quarter ended March 31, 1998 were 17 compared to 16 for the fourth
     quarter of 1998.

o    Overall, working capital increased 2.6% or $8.1 million to $320.3 million
     at March 31, 1999 compared to $312.1 million at December 31, 1998.

o    We believe that our existing cash reserves and expected cash flow from
     operations will be sufficient to satisfy our operating cash needs for at
     least the next 12 months.

CAPITAL EXPENDITURES

o    Capital expenditures for the three months ended March 31, 1999 were $15.1
     million compared to $2.9 million in the first quarter of 1998. Major
     expenditures were attributable to:

     o    progress on the conversion of our domestic human resource system
          to Peoplesoft Inc. application software and the upgrade of our 
          primary domestic order fulfillment system

     o    other computer and hardware purchases

     o    the upgrade of our websites

     o    the purchase of our distribution facility in the United Kingdom

     o    the outfitting of our new domestic warehouse.

o    During the quarter, construction was completed on our new 230,000 sq. ft.
     warehouse facility at the Airborne Express hub facility in Wilmington,
     Ohio. We anticipate spending an additional $15 million for equipment,
     fixtures and computer systems for the new warehouse during the next six
     months. We have executed a 10-year lease of this facility that commenced on
     March 15, 1999.

o    We currently anticipate investing approximately $11 million over the
     remainder of 1999 for the upgrade of our computer systems. This investment
     is intended to improve and create efficiencies in many areas of our
     business including sales, warehouse, inventory and financial management. In
     addition to these expected improvements, the implementation of these
     upgrades will address "Year 2000 readiness" issues.

o    The investments in systems and the expenditures related to the new 
     warehouse will be funded from existing cash and operating cash flows.


                                       11
<PAGE>

LINES OF CREDIT

o    We have a multi-currency revolving credit facility of $55.0 million for
     working capital purposes. This facility expires on June 30, 1999. As of
     March 31, 1999 this facility was not being used.

o    At March 31, 1999 we had unused lines of credit in the United Kingdom and
     France that provide for unsecured borrowings of up to 2.0 million British
     pounds and 45 million French francs ($3.2 million and $7.4 million, 
     respectively, at the March 31, 1999 exchange rate) for working 
     capital purposes.

FORWARD EXCHANGE CONTRACTS

o    We use forward exchange contracts to manage exposure to foreign currency
     risk related to intercompany loans and investments in our foreign
     subsidiaries. Outstanding agreements involve the exchange of one currency
     for another at a fixed rate. Our credit exposure is limited to the
     replacement cost, if any, of the instruments and we enter into such
     agreements only with highly-rated counterparties. We match the term and
     notional amount of the contracts to the underlying intercompany loans or
     investments and do not enter into forward exchange contracts for trading or
     speculative purposes.

o    At March 31, 1999 we had outstanding forward exchange contracts with
     notional amounts of $3.0 million which mature in less than six months. The
     single largest currency represented was the British pound.

SEASONALITY

o    Our business is subject to seasonal variations. These seasonal variations
     particularly include lower demand in Europe during the summer months 
     attributable to vacations.

YEAR 2000 READINESS

         We use a significant number of computer software programs and operating
systems in our internal operations including applications used in financial
business systems and various administrative functions that will be affected by
the Year 2000 problem common to most businesses. If these systems are unable to
properly recognize date sensitive information related to the Year 2000 they
could generate erroneous data or fail to operate. This in turn could cause
disruptions of our operations, including, among other things, a temporary
inability to process transactions, send invoices or engage in similar normal
business activities.

YEAR 2000 READINESS PROGRAMS

         To reduce the possibility of significant interruptions in normal
operations we have implemented a worldwide Year 2000 readiness program. We are
using both internal and external resources in our Year 2000 program. As part of
this program we have named a Year 2000 Director, established a project office
and formed a cross-functional task force to coordinate the program on a
worldwide basis.

         In 1998 we performed a comprehensive review of our existing information
systems to determine which of our computer equipment and software might not
function properly with respect to dates referencing the Year 2000 and
thereafter. This review included systems commonly thought of as information
technology ("IT") systems, including accounting, data processing and other
miscellaneous systems, as well as systems not commonly thought of as IT systems
such as alarm systems, fax machines and other similar systems.


                                       12
<PAGE>

         We are in the process of modifying or replacing systems that were
identified as not being Year 2000 ready. In addition to the planned upgrades
described in Liquidity and Capital Resources, above, we identified the need for
and have begun making modifications to our worldwide systems in connection with
the Year 2000 program. We estimate that we were 65% complete at March 31, 1999
with respect to the modification or replacement of our worldwide systems and
remain on target for completion by June 30, 1999. We have scheduled final
integration testing for these systems to occur during the third quarter of 1999.
The following significant milestones in this project have been accomplished:

         o        We have completed our worldwide hardware and operating system
                  upgrades.

         o        We have successfully inventoried and evaluated our
                  desktop/server software on a worldwide basis. We continue to
                  modify or replace those software systems that are not Year
                  2000 compliant and the implementation of compliant versions of
                  the software for these platforms remains on schedule.

         o        Our European core systems identified as needing upgrading have
                  already been remediated, are in the testing phase and are on
                  schedule for completion in accordance with our plan.

         o        We have converted our domestic financial systems to Peoplesoft
                  Inc. application software. We expect to complete the upgrade
                  of our primary domestic order fulfillment system and the
                  conversion of our domestic human resource system to
                  Peoplesoft application software during the second quarter of
                  1999.

         During the second quarter of 1998 we began a program for determining 
the Year 2000 readiness of our business partners including our vendors, 
service providers and major customers and the compatibility of system 
interfaces for electronic business transactions. First we identified our 
business partners and categorized them according to their significance to our 
operations. Then we wrote to each business partner to determine its Year 2000 
readiness status. Based on these communications, we believe that most of our 
significant business partners and our interfaces with their systems will be 
Year 2000 ready. However, it is too early to determine whether any of our 
other business partners will be Year 2000 ready. During the first quarter of 
1999 we began to increase the frequency of our correspondence and 
communication to and with those business partners that have not responded to 
our initial communications or whose response identified an issue requiring 
further clarification. During the second quarter we intend to complete our 
readiness analysis, work with our business partners to clarify any 
outstanding issues and, where appropriate, develop contingency plans 
including securing alternative vendors and service providers.

COST OF YEAR 2000 READINESS PROGRAMS

         Total after-tax charges related to the identification, assessment,
remediation and testing efforts related to the Year 2000 program are expected to
be approximately $4.7 million. As of March 31, 1999, we had incurred cumulative
after-tax Year 2000 costs of approximately $2.4 million primarily for (1)
outside consulting fees related to the planning and analysis activities of the
Year 2000 program and (2) European remediation costs. Included in the $2.4
million in cumulative Year 2000 costs were charges of approximately $1.0 million
or $0.03 per share incurred during the first quarter of 1999.

         We expect that remaining after-tax Year 2000 expenses during the next
six months of 1999 will be approximately $2.3 million which will negatively
impact earnings by approximately $0.04 per share during the second quarter of
1999 and $0.03 per share during the third quarter of 1999. This amount is not
included in the $11 million we expect to invest in the planned upgrade of our
worldwide computer systems during the next nine months.

RISKS ASSOCIATED WITH YEAR 2000 ISSUES


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<PAGE>

         If we or our significant business partners fail to address Year 2000
issues in an adequate and timely manner, our ability to process transactions
could be impeded. In addition, the failure of common carriers or other means of
shipping products to be able to transport shipments of our products to customers
in a timely basis during the first days or weeks of the new millennium could
cause the loss of a material amount of revenue. This may result in a direct and
material impact on our ability to generate revenue and to attract and retain
customers in the future. This in turn could have a material impact on our
business, financial condition and results of operations.

         Among the factors that could cause our Year 2000 efforts to be less
than fully effective are the novelty and complexity of these issues and their
solutions and our dependence on the technical skills of employees and
independent contractors and on the representations and preparedness of third
parties. Moreover, Year 2000 issues present a number of risks that are beyond
our control. These include the failure of vendors or common carriers to deliver
merchandise to us or our customers, the failure of utility companies to deliver
electricity, the failure of telecommunications companies to provide voice and
data services, the failure of financial institutions to process transactions and
transfer funds and the collateral effects on us of the effects of Year 2000
issues on the economy in general or on our business partners and customers in
particular.

         In addition, variability of definitions of "compliance with Year 2000"
and the variety of computer products we sell that may themselves contain a Year
2000 problem may lead to claims against us, including those arising out of the
failure of such products to be "compliant". Through our Year 2000 compliance
office we have received over 13,000 third party requests for documentation of
internal compliance and product compliance. We rely upon the warranties of the
product manufacturers in case of any such claims but we have not received
assurance that such warranties will be sufficient to cover the costs and
expenses of any successful claims.

         Assuming that governmental services, the banking system, common
carriers, telecommunications and utilities are operational and no material
adverse impact on the market for our products or the economy in general occurs
prior to or immediately following the new millennium, we believe that the
reasonably likely worst case scenario would be the requirement to incur
additional expense and resources needed to repair or replace additional systems
or subsystems, the potential loss or delay of customer orders, direct and
material impact on our ability to generate revenue and to attract and retain
customers in the future and a higher than anticipated influx of customer returns
and claims relating to products sold by us that were not Year 2000 ready. Any of
these things could have a material adverse effect on our business, financial
condition and results of operations.

CONTINGENCY PLANS

         We are in the process of developing contingency plans to mitigate to
the extent possible any significant identified Year 2000 risks. We have begun a
comprehensive analysis of the nature and extent of operational problems that
would be reasonably likely to result from our failure or the failure of our
business partners to complete their Year 2000 readiness efforts. This analysis
will provide the information necessary to develop a contingency plan for dealing
with the most likely worst case scenario. We currently expect to complete such
analysis and contingency planning during the second quarter of 1999.

EUROPEAN MONETARY UNION

         On January 1, 1999 eleven member countries of the European Community
established the euro, a new common currency, by fixing exchange rates between
their national currencies and the euro. Of these eleven member countries, we
have operations in France, Germany and the Netherlands. On January 1, 2002 euro
coins and notes are scheduled to be introduced while national currency coins and
notes are scheduled to be withdrawn from circulation by July 1, 2002. During
this three-year transition period goods and services may be purchased with the
euro or national currency. After the transition 


                                       14
<PAGE>

period transactions in both the wholesale and retail marketplace are expected to
be conducted in the euro.

         The immediate impact of the common currency on our European businesses
was the requirement to process customer orders in both national currencies and
the euro. We implemented upgrades of various computer systems in the first
quarter of 1999 to manage our business in a dual currency environment. The cost
of the computer systems upgrades was not material.

         Our existing multi-currency revolving credit agreement contemplates
borrowing in the euro. Our foreign exchange exposures are not expected to be
materially altered by the introduction of the euro.

OUTLOOK

         We depend in large part on sales of hardware and software products 
for users of Apple Macintosh computers. These products represented 
approximately 34% of our sales for the three months ended March 31, 1999 and 
for the year ended December 31, 1998. Computers manufactured by Apple 
Computer Inc. itself represented approximately 11% of our sales for the year 
ended December 31, 1998. Apple has significantly restricted the number of 
authorized resellers of its products and sells its products to end users in 
direct competition with us and other resellers. If Apple were to withdraw our 
reseller authorization, this would have an immediate adverse impact on our 
business, financial condition and results of operations. In addition, some of 
our largest suppliers including Compaq Computer Corp. and International 
Business Machines Corp. have recently announced that they have expanded or 
intend to expand their direct sales efforts. The continuing impact of these 
matters may adversely affect our business, financial condition and results of 
operations.

         We acquire products for resale both directly from manufacturers and 
indirectly through distributors and other sources. Many manufacturers have 
historically provided us with incentives in the form of supplier 
reimbursements, price protection payments, rebates and other similar 
arrangements. The increasingly competitive environment between and amongst 
computer hardware manufacturers has already resulted in the reduction and/or 
elimination of some of these incentive programs. Additionally, the return 
rights historically offered by manufacturers have become more limited. 
Manufacturers are also taking steps to reduce their inventory exposure by 
limiting the number of distributors and resellers that are authorized to 
purchase products directly from them. For example, Compaq Computer Corp. has 
recently announced that it will make its products available to resellers only
through four distributors rather than directly. Under such circumstances we 
will purchase Compaq products in the ordinary course of business from the 
designated distributors. These trends are part of an overall effort by 
manufacturers to reduce their costs and shift the burden of inventory risk to 
distributors and resellers which could have a material adverse effect on our 
business, financial condition and results of operations.

         We have embarked on a program to expand our telemarketing sales force
and believe that our future success depends, in part, on our ability to recruit,
train and retain an adequate number of skilled sales associates.

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

         With the exception of historical information contained in this Report,
the matters described in this Report contain "forward-looking statements".
Forward-looking statements typically include the words "believe," "expect,"
"anticipate," "intend," "estimate," or similar expressions. The forward-looking
statements in this Report are subject to economic, competitive, governmental,
technological and legal contingencies, many of which are beyond our control.
They are specifically subject to risks and uncertainties relating to:

         o        increased competition from other catalog, retail store, online
                  and other resellers and manufacturers of computer products


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<PAGE>

         o        reductions in manufacturers' incentive programs

         o        our foreign operations

         o        the volatility of our stock

         o        privacy concerns with respect to mailing list development and
                  maintenance

         o        successful and timely integration of new systems

         o        continued development of electronic commerce

         o        quarterly fluctuations and seasonality of our business

         o        increases in postage, shipping and paper costs

         o        state sales tax collection efforts

         o        the ultimate outcome of the Commission's investigation into
                  our reported accounting errors

         o        the Year 2000 issue and specifically our Year 2000 readiness
                  initiatives

         o        certain provisions of our Certificate of Incorporation that
                  could delay, defer or prevent a change in control.

         We discuss these and other risks in more detail in:

         o        Management's Discussion and Analysis of Financial Condition
                  and Results of Operations of our Annual Report for the year
                  ended December 31, 1998 and more specifically in the
                  paragraphs in that section captioned "Liquidity and Capital
                  Resources," "Impact of Inflation and Seasonality" and
                  "Outlook"

         o        the Risk Factors section of our Registration Statement on Form
                  S-3 dated January 25, 1999.

         We warn you not to place undue reliance on the forward-looking
statements contained in this Report because they speak only as of the date of
this Report and we have no obligation to update or revise them in the future.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We are exposed to market risk in the normal course of our business
operations due to our operations in different foreign currencies, and our
ongoing investing activities. The risk of loss can be assessed from the
perspective of adverse changes in fair values, cash flows and future earnings.
We have established policies and procedures governing our management of market
risks and the use of financial instruments to manage exposure to these risks.

         The primary purpose of our foreign currency hedging activities is to
manage currency risk related to intercompany loans and investments in our
foreign subsidiaries. The single largest hedged currency represented at March
31, 1999 is the British pound. At March 31, 1999, we had outstanding forward
exchange contracts in notional amounts totaling $3.0 million (fair value
approximates notional amounts) which mature in six months or less. We match the
term and the notional amount of the contracts to the underlying intercompany
loans or investments, and do not enter into any derivative 


                                       16
<PAGE>

financial instruments for trading purposes. Foreign currency hedging activity is
not material to our consolidated financial position, results of operations, or
cash flow.

         We are exposed to changes in interest rates primarily as a result of
our investing activities. The primary objective of our investing activities is
to preserve principal while at the same time maximizing yields without
significantly increasing risk. We primarily invest in highly liquid tax exempt
municipal bonds, floating rate bonds, commercial paper, money market funds and
corporate bonds which totaled $61.1 million at March 31, 1999. These investment
portfolios have a weighted average maturity of less than one year with no
individual investment having a maturity exceeding two years. The market risk
associated with investing activity is not material to our consolidated financial
position, results of operations or cash flow.

         The interest rate risk evaluation noted above is based on a sensitivity
analysis performed on our marketable securities at March 31, 1999. If the
actual changes in interest rates are substantially different from expected
changes, the net impact of interest rate risk on our cash flows may be
materially different from that disclosed above.


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<PAGE>

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         The staff of the Commission is conducting a formal investigation into
         the events underlying the restatement of our financial statements for
         the years 1992 through 1995. We are cooperating with the Commission in
         its investigation. We are and may be involved in other litigation 
         relating to claims arising out of our operations in the normal course 
         of business. We do not expect any pending litigation to have a material
         adverse effect on our business, financial condition or results of 
         operations.

ITEM 2.  CHANGES IN SECURITIES

         None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         None

ITEM 5.  OTHER INFORMATION

         None

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits

         Exhibit 11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS

         Exhibit 27 FINANCIAL DATA SCHEDULE

         (b) Reports on Form 8-K

         1.       The Company filed a Form 8-K pursuant to Item 4 therein on
                  March 26, 1999 to report that upon completion of the audit for
                  the year ended December 31, 1998 the Company will not
                  reappoint KPMG LLP as its principal accountants for the year
                  ended December 31, 1999 and that the Company will engage
                  PricewaterhouseCoopers LLP as its principal accountants.

         2.       The Company filed a Form 8-K/A pursuant to Item 4 therein on
                  April 7, 1999 to report that KPMG LLP had completed its audit
                  of the financial statements of the Company for the year ended
                  December 31, 1998 and the Company engaged
                  PricewaterhouseCoopers LLP as its new independent accountants
                  for the audit of the Company's financial statements for the
                  year ending December 31, 1999.


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<PAGE>

                                    SIGNATURE

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


                                             MICRO WAREHOUSE, INC.

                                             The Registrant

Date: May 14, 1999
                                             By /s/ WAYNE P. GARTEN
                                                WAYNE P. GARTEN
                                                Executive Vice President and
                                                Chief Financial Officer

                                             (Duly Authorized Officer of the 
                                             Registrant, Principal Officer and 
                                             Principal Accounting Officer)


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<PAGE>

INDEX TO EXHIBITS

EXHIBIT
NUMBER                      DESCRIPTION OF EXHIBIT
--------------------------------------------------------------------------------

11                Statement re Computation of Per Share Earnings

27                Financial Data Schedule


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