RESTATED - SEE "INTRODUCTORY NOTE"

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

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

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

                                   FORM 10-K/A

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

  FOR THE FISCAL YEAR ENDED: DECEMBER 31, 1994 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 NO.)
INCORPORATION OR  ORGANIZATION)

               535 CONNECTICUT AVENUE, NORWALK, CONNECTICUT 06854
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

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

                                 (203) 899-4000
               REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE

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

           SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

                                      NONE

           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                     Common Stock, par value $.01 per share
                                (TITLE OF CLASS)

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


                                 Page 1 of ____


<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

      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 of such
filing requirements for the past 90 days. Yes X No _.

      Indicate by check mark if the disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of the Form 10-K or any
amendment to the Form 10-K. [ X ]

      The aggregate market value of voting stock held by non-affiliates of the
Registrant computed by reference to the closing sales price as reported on the
Nasdaq National Market on March 15, 1995 was approximately $708,236,457.50. In
determining the market value of the voting stock held by non-affiliates, shares
of Common Stock beneficially owned by each executive officer, director and
holder of more than 10% of the outstanding shares of Common Stock have been
excluded. This determination of affiliate status is not necessarily a conclusive
determination for other purposes.

      Common Stock outstanding as of March 15, 1995: 29,575,763

                      DOCUMENTS INCORPORATED BY REFERENCE:

      Pursuant to General Instruction G(2) to this form, the information
required by Part II (Items 5, 6, 7 and 8) hereof is incorporated by reference
from the registrant's Annual Report to Stockholders for the Fiscal Year ended
December 31, 1994.

     Pursuant to General Instruction G(3) to this form, the information required
by Part III (Items 10, 11, 12, and 13) hereof is incorporated by reference from
the registrant's definitive Proxy Statement for its Annual Meeting of
Stockholders scheduled to be held on June 1, 1995.


                                       2
<PAGE>

                                INTRODUCTORY NOTE

THE INFORMATION CONTAINED HEREIN HAS BEEN RESTATED IN FEBRUARY 1997 TO REFLECT
ADJUSTMENTS RESULTING FROM THE DISCOVERY OF ERRORS IN THE COMPANY'S ACCOUNTING
PROCEDURES (SEE NOTE 2 OF NOTES TO CONSOLIDATED FINANCIAL STATEMENTS). UNLESS
OTHERWISE STATED, HOWEVER, INFORMATION CONTAINED HEREIN IS AS OF DECEMBER 31,
1994 AND IS SUBJECT TO UPDATING AND SUPPLEMENTING AS PROVIDED IN THE COMPANY'S
PERIODIC REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION SUBSEQUENT TO
SUCH DATE.

ITEM 6

                              Micro Warehouse, Inc.
                            1994 Financial Statements

SELECTED FINANCIAL INFORMATION
For the Years Ended December 31,
(In thousands, except 
per share data and ratios)                     
<TABLE>
<CAPTION>
                                               1994         1993         1992         1991         1990
                                            (Restated)   (Restated)   (Restated)                
---------------------------------------------------------------------------------------------------------
<S>                                          <C>          <C>          <C>          <C>          <C>     
Income Statement Data:                                                                          
Net sales                                    $776,377     $450,385     $269,634     $163,603     $123,673
</TABLE>

RESTATED - SEE "INTRODUCTORY NOTE"

<TABLE>
<S>                                           <C>           <C>          <C>          <C>          <C>   
Gross profit                                  136,660       86,749       51,415       31,450       21,932
Income from operations                         32,252       22,153        2,908        5,047        2,120
---------------------------------------------------------------------------------------------------------
Net income(A)                                $ 20,223     $ 13,009     $  5,869     $  3,803    
--------------------------------------------------------------------------------------------
Net income per share(A)(B)                                $   0.73     $   0.55     $   0.33     $   0.22
--------------------------------------------------------------------------------------------
Weighted average number                                                                         
   of shares outstanding(B)                    27,618       23,533       17,854       17,565    
--------------------------------------------------------------------------------------------
                                                                                                
Operating Data:                                                                                 
Gross margin                                     17.6%        19.3%        19.1%        19.2%        17.7%
Operating margin                                                                                
 (before special incentive compensation)          4.2%         4.9%         4.3%         4.4%         2.3%
Current ratio                                   3.7:1        2.7:1        4.1:1        1.3:1        1.3:1
                                                                                                
Balance Sheet Data (at December 31):                                                            
Working capital                              $184,925     $ 82,129     $ 54,413     $  6,411     $  3,800
Total assets                                  297,560      142,827       78,612       31,620       19,453
Long-term debt, excluding current portion         645         --          1,362        6,754        3,186
Stockholders' equity                         $229,564     $ 94,820     $ 59,548     $  2,667     $  2,644
</TABLE>

(A) Pro forma for 1992 and 1991

(B) Years prior to 1994 are adjusted to reflect a two-for-one stock split
    effective April 4, 1994


                                       3
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

ITEM 7

Management's Discussion and Analysis of Financial Condition and Results of
Operations

Results of Operations

The table below sets forth certain items expressed as a percent of net sales,
for each of the years in the three-year period ended December 31, 1994.

Year Ended December 31,
                                               1994         1993         1992  
                                            (Restated)   (Restated)   (Restated)
--------------------------------------------------------------------------------
Net sales                                     100.0%       100.0%       100.0%
Cost of sales                                  82.4         80.7         80.9
--------------------------------------------------------------------------------
Gross profit                                   17.6         19.3         19.1
--------------------------------------------------------------------------------
Selling, general and
   administrative expenses                     13.4         14.4         14.7
Special incentive compensation                  --           --           3.3
--------------------------------------------------------------------------------
Income from operations                          4.2          4.9          1.1
Interest income (expense)                        .2           .1          (.5)
--------------------------------------------------------------------------------
Income before income taxes                      4.4          5.0           .6
--------------------------------------------------------------------------------

Year Ended December 31, 1994 Compared to Year Ended December 31, 1993

Net sales increased by $326.0 million or 72% to $776.4 million up from $450.4
million in 1993. The sales increase is attributable to strong growth in the core
domestic businesses: the Macintosh business was up 44% to $424.0 million, the
PC/Windows business which includes both the MicroWAREHOUSE and Micro
SystemsWAREHOUSE catalogs was up 57% to $156.1 million and specialty catalogs
contributed $72.0 million. With continued international expansion, international
sales were up 281% to $124.3 million.

The sales increase for the core businesses was due to increases in the active
customer base, up 45% for the Macintosh business and 55% for the PC/Windows
business coupled with increased catalog circulation in both business areas. The
increase in average order size to $306 from $247 due primarily to the increase
in hardware sales also contributed to the Company's sales performance. In
addition the Company's outbound sales programs to corporate customers increased
by 68% to $292.7 million.

International sales growth was attributable to a growth of 114% in the UK
operations as well as contributions from France, Germany and the Scandinavian
acquisitions. With the establishment of operations in additional countries, the
total European customer base increased by 286% and the number of catalogs
distributed grew by 180% to 4.2 million.

During 1994, the Company added two new specialty catalogs, Micro
SystemsWAREHOUSE and Home ComputerWAREHOUSE catalogs, to its existing specialty
catalogs comprising Data CommWAREHOUSE, CD-RomWAREHOUSE, Micro SuppliesWAREHOUSE
and Paper designWAREHOUSE, all of which contributed $72.0 million in sales in
1994.

Gross profit decreased to 17.6% of net sales from 19.3% in 1993. The decrease in
gross profit was due to reduced gross margins internationally, with
international becoming a greater proportion of total sales, coupled with a
higher proportion of hardware sales which are typically at lower margins than
software sales. Hardware as a percent of total sales increased from 35% in 1993
to 46% in 1994.


                                       4
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

Selling, general and administrative ("S,G&A") expenses increased to $104.4
million from $64.6 million in 1993, but decreased as a percent of net sales to
13.4% from 14.4% in 1993. The decrease in S,G&A expenses as a percent of sales
was the result of cost controls coupled with increased sales and higher average
order size.

In 1994, the Company generated $1.6 million in interest income as compared to
$0.5 million in interest income in 1993. This change was due to the resources
provided by the public offerings in April and October of 1994. This is further
described below in the Liquidity and Capital Resources section.

Income before income taxes was $33.8 million or 4.4% of net sales as compared to
$22.6 million or 5.0% in 1993.

Net income increased to $20.2 million or $0.73 per share from $13.0 million in
1993, or $0.55 per share adjusted for a two-for-one stock split effective April
1994.

Year Ended December 31, 1993 Compared to Year Ended December 31, 1992

Net sales increased by $180.8 million or 67% to $450.4 million up from $269.6
million in 1992. The sales increase is attributable to strong growth in the core
domestic businesses: Macintosh business was up 37% to $300.3 million, and the
PC/Windows business was up 98% to $99.5 million; with continued international
expansion, international sales were up 258% to $32.6 million; and additional
specialty catalogs contributed $18.0 million.

The sales increase for the core businesses was due to increases in the active
customer base, up 25% for the Macintosh business and 78% for the PC/Windows
business coupled with increased catalog circulation in both business areas. Also
contributing to the sales increase were the outbound telemarketing programs for
both Macintosh and PC/Windows which increased by 106% .

International sales growth was attributable to a growth of 100% in the UK
operations and the start up of business in France and Germany. With the
establishment of operations in the new countries, the total European customer
base increased by 132% and the number of catalogs distributed grew by 165% to
1.5 million.

During 1993, the Company launched four new specialty catalogs: Data
CommWAREHOUSE, CD-Rom WAREHOUSE, Micro SuppliesWAREHOUSE and Paper
designWAREHOUSE, all of which contributed $18.0 million in 1993.

Gross profit increased to 19.3% of net sales from 19.1% in 1992. The increase in
gross profit reflects the impact of higher margins in the specialty catalogs,
reduced freight costs, and higher margins from international operations somewhat
offset by the increase in the PC/Windows business as a proportion of total sales
which has lower margins than the Macintosh and specialty businesses.

There was no special incentive compensation paid in 1993, compared to $8.8
million in 1992. In 1992, this item represented the value of shares of common
stock transferred to a consultant and issued to an officer of the Company in
consideration for the termination of the incentive portions of their agreements
with the Company. In order to determine the amount to be recorded as
compensation expense as of the termination date, the Company engaged an
independent appraiser to estimate the fair market value per share of its common
stock. For all other periods, this item represented amounts paid to the
consultant and co-founder under agreements which were based on profitability.

S,G&A expenses increased to $64.6 million from $39.7 million in 1992, but
decreased as a percent of net sales to 14.4% from 14.7% in 1992. The decrease in
S,G&A expenses as a percent was the result of consolidating the warehouse and
distribution facilities in Wilmington, Ohio and from productivity gains
attributable to the investment of over $3 million in computer equipment.

In 1993, the Company generated $0.5 million in interest income as compared to
$1.3 million in interest expense in 1992. This change was due to the resources
provided by the initial public offering in December of 1992 and from 


                                       5
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

the follow-on offering in August of 1993. This is further described below in the
Liquidity and Capital Resources section.

Income before income taxes was $22.6 million or 5.0% of net sales as compared to
$1.6 million or 0.6% of net sales in 1992. The income in 1992 included a charge
of $8.8 million for special incentive compensation which was discussed above. No
similar charge occurred in 1993. Higher domestic income was partially offset by
losses in Europe which totaled $1.8 million in 1993 compared to a loss of $0.2
million in 1992.

Net income increased to $13.0 million or $0.55 per share from $5.9 million or
$0.33 per share in 1992, on a pro forma basis.

Liquidity and Capital Resources

In December 1992, the Company completed an initial public offering of its common
stock resulting in net proceeds to the Company of $53.2 million. In August 1993,
the Company completed a secondary offering of its common stock resulting in net
proceeds to the Company of $22.6 million. In April and October 1994, the Company
completed follow-on offerings of its common stock resulting in net proceeds to
the Company of $102.1 million. As of December 31, 1994, the Company had cash and
short-term investments totaling $74.5 million.

As a result of increased sales, the Company's inventories increased to $78.7
million at December 31, 1994 from $45.0 million at December 31, 1993, an
increase of 75% which is in line with the sales increase of 72%. Accounts
receivable increased to $80.8 million at December 31, 1994 from $44.1 million at
December 31, 1993. Accounts receivable have increased due to an increase in open
account purchases by commercial customers and an increase in advertising
receivables resulting from increased promotional activity.

Capital expenditures for the 12 months of 1994 and 1993 were $13.6 million and
$4.8 million, respectively, primarily for computer systems and distribution
equipment both in the United States and in Europe. During 1994, the Company
expanded its telemarketing facilities and its warehousing operation by over
287,000 square feet. Additionally, the Company installed or upgraded computer
systems in six countries. Although the Company's primary capital needs will be
to fund its working capital requirements for expected sales growth, the Company
expects that future growth will also require continued expansion of its computer
systems and distribution capacity. At December 31, 1994, the Company had
existing credit facilities which provided for unsecured revolving credit lines
of up to $15 million and (pound)750,000 for working capital purposes. No
borrowings were outstanding under these facilities as of December 31, 1994.

The Company believes that its existing cash reserves, cash flow from operations
and existing credit facilities will be sufficient to satisfy its operating cash
needs for at least the next 12 months. Thereafter, the Company may require
additional cash reserves.

Impact of Inflation and Seasonality

The Company's results are subject to quarterly variations although, in the
opinion of management, these variations are not significant.

Sales growth tends to be stronger in the first and last quarters of the year
with the two middle quarters typically slower. The high growth quarters are
reflective of holiday buying as well as a customer receptiveness to prospecting.
The slower quarters are impacted by the summer months and a slowdown in buying
from schools and universities.

The cost associated with both paper and postage have risen significantly in the
past several months. The Company has taken a number of actions that have almost
completely offset these increases, such as to increase revenue yield per catalog
by using advertising space more efficiently and reducing expenses by improving
the publishing process using the latest digital color separation technology and
in some cases, by using thinner paper.


                                       6
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

Outlook

The Company anticipates continued growth in the installed base of personal
computers both in business and in the home. This growth along with the Company's
strategy to expand internationally and to identify growth market opportunities
for specialty catalogs should increase the Company's sales in the future.

During 1994, international operations were expanded with the acquisition of
Macintosh catalogers in Finland, Holland, Belgium, Mexico and Canada; and
PC/Window catalogers in France, Norway and Sweden. Also, the Company launched a
new Macintosh catalog in Japan and added two new licensees in Chile and
Colombia. The Company's strategy is to further diversify its product offerings
and to start, acquire or license operations in other foreign markets in which
the Company currently does not operate, as well as to introduce additional
specialty catalogs.


                                       7
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

ITEM 8

Responsibility for Financial Statements

      The financial data in this report, including the audited financial
statements, have been prepared by management using the best available
information and applying judgement. Accounting principles used in preparing the
financial statements are those that are generally accepted in the United States.

      In meeting our responsibility for the integrity of the financial
statements, we maintain a system of internal controls designed to provide
reasonable assurance that assets are safeguarded, that transactions are executed
in accordance with management's authorization and that the accounting records
provide a reliable basis for the preparation of the financial statements.
Management has also established a formal Business Code of Ethics which is
distributed throughout the Company. We acknowledge our responsibility to
establish and preserve an environment in which all employees properly understand
the fundamental importance of high ethical standards in the conduct of our
business.

      Our independent auditors are engaged to audit and to render an opinion on
the fairness in all material respects of our consolidated financial statements
presented in conformity with generally accepted accounting principles. In
performing their audit in accordance with generally accepted auditing standards,
our independent auditors obtained a sufficient understanding of the Company's
internal accounting control structure to plan their audit and determine the
nature, timing and extent of tests to be performed.

      The Audit Committee of the Board of Directors meets with management and
our independent auditors to review accounting, auditing and financial matters.
Our Audit Committee is composed of only outside directors. This committee and
the independent auditors have free access to each other with or without
management being present.


Linwood A. Lacy, Jr.
President, Chief Executive Officer,
Acting Chief Financial Officer and
Acting Chief Accounting Officer



                                       8
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

Independent Auditors' Report

The Board of Directors and Stockholders of Micro Warehouse, Inc.:

We have audited the accompanying consolidated balance sheets of Micro Warehouse,
Inc. as of December 31, 1994 and 1993 and the related consolidated statements of
income, stockholders' equity, and cash flows for each of the years in the three
year period ended December 31, 1994 (all as restated, see note 2). These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Micro Warehouse,
Inc. as of December 31, 1994 and 1993, and the results of its operations and its
cash flows for each of the years in the three year period ended December 31,
1994, in conformity with generally accepted accounting principles.

KPMG Peat Marwick LLP


Stamford, CT
January 31, 1997


                                       9
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

Micro Warehouse, Inc.
Consolidated Balance Sheets

--------------------------------------------------------------------------------
December 31, 1994 and 1993
(In thousands)                                                1994         1993
                                                         (Restated)   (Restated)
--------------------------------------------------------------------------------
ASSETS
Current assets:
  Cash and cash equivalents                               $ 30,268    $   2,424
  Marketable securities at market value                     44,204       28,185
  Accounts receivable, net of allowance for               
    doubtful accounts ($3,096 and $1,853 at               
    December 31,1994 and 1993, respectively)                80,828       44,099
  Inventories                                               78,733       45,038
  Prepaid expenses and other current assets                 11,180        6,433
  Due from stockholders                                        804          804
  Due from affiliates, net                                       -          385
  Tax refund                                                 2,704          857
  Deferred taxes                                             3,555        1,911
-------------------------------------------------------------------------------
        Total current assets                               252,276      130,136
-------------------------------------------------------------------------------
Property, plant and equipment, net                          19,676        9,312
Goodwill, net                                               24,041        2,200
Deposits and trademarks, net                                 1,567        1,179
-------------------------------------------------------------------------------
        Total assets                                      $297,560     $142,827
===============================================================================
                                                          
LIABILITIES AND STOCKHOLDERS' EQUITY                      
Current liabilities:                                      
  Accounts payable - trade                                $ 48,831     $ 34,117
  Accrued expenses                                          13,791       10,334
  Deferred revenue                                           4,534        3,556
  Equipment obligations                                        195         --
-------------------------------------------------------------------------------
        Total current liabilities                           67,351       48,007
Equipment obligations                                          645         --
-------------------------------------------------------------------------------
        Total liabilities                                   67,996       48,007
-------------------------------------------------------------------------------
Stockholders' equity:                                     
  Preferred stock, $.01 par value:                        
    Authorized - 100 shares; none issued                      --           --
  Common stock, $.01 par value:                           
    Authorized 50,000 shares; issued and                  
      outstanding; 29,534 and 24,862 shares               
      at December 31, 1994 and 1993, respectively              295          249
  Additional paid-in capital                               192,937       78,485
  Retained earnings                                         36,605       16,382
  Cumulative translation adjustment                            177         (296)
  Valuation adjustment for marketable securities              (450)        --
-------------------------------------------------------------------------------
        Total stockholders' equity                         229,564       94,820
-------------------------------------------------------------------------------
        Total liabilities and stockholders' equity        $297,560     $142,827
===============================================================================
                                                           
See accompanying notes to consolidated financial statements.


                                       10
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

Micro Warehouse, Inc.
Consolidated Statements of Income

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
Years Ended December 31, 1994, 1993 and 1992
(In thousands, except per share data)                            1994       1993       1992
                                                            (Restated) (Restated) (Restated)
-------------------------------------------------------------------------------------------
<S>                                                         <C>        <C>        <C>      
Net sales                                                   $ 776,377  $ 450,385  $ 269,634
Costs of goods sold                                           639,717    363,636    218,219
-------------------------------------------------------------------------------------------
   Gross profit                                               136,660     86,749     51,415
Selling, general and administrative expenses                  104,408     64,596     39,732
Special incentive compensation                                   --         --        8,775
-------------------------------------------------------------------------------------------
   Income from operations before interest
     and income taxes                                          32,252     22,153      2,908
Interest income (expense)                                       1,589        456     (1,264)
-------------------------------------------------------------------------------------------
   Income before income taxes                                  33,841     22,609      1,644
Income taxes                                                   13,618      9,600     (1,512)
-------------------------------------------------------------------------------------------
     Net income                                             $  20,223  $  13,009  $   3,156
===========================================================================================
Pro forma data (unaudited):
   Historical income before income taxes as above           $    --    $    --    $   1,644
   Pro forma adjustment for special incentive compensation       --         --        8,775
-------------------------------------------------------------------------------------------
   Pro forma income before income taxes                          --         --       10,419
-------------------------------------------------------------------------------------------
   Provision for income taxes:
     Historical                                                  --         --        1,512
     Pro forma-incremental to historical taxes                   --         --       (6,062)
-------------------------------------------------------------------------------------------
         Total taxes                                             --         --       (4,550)
-------------------------------------------------------------------------------------------
     Net income                                             $    --    $    --    $   5,869
-------------------------------------------------------------------------------------------
Net income per share                                        $    0.73  $    0.55  $    0.33
-------------------------------------------------------------------------------------------
Weighted average number of shares outstanding                  27,618     23,533     17,854
===========================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.


                                       11
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

Micro Warehouse, Inc.
Consolidated Statements of Stockholders' Equity

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                            Valuation 
December 31, 1994, 1993 and 1992                       Common Stock     Additional              Cumulative  Adjustment
(In thousands)                                       ----------------    Paid-in     Retained  Translation  Marketable
                                                     Shares    Amount    Capital     Earnings   Adjustment  Securities    Total
---------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>     <C>        <C>         <C>         <C>         <C>         <C>      
Balance at December 31, 1991                         15,600  $     156  $   2,026   $     485   $    --     $    --     $   2,667
  Cumulative UK deficit at
    December 31,1991                                   --         --         --          (296)       --          --          (296)
  Value of common stock issued as
    incentive compensation                              400          4      8,771        --          --          --         8,775
  Distribution of S corporation
    earnings and paid-in capital                       --         --       (2,181)     (5,883)       --          --        (8,064)
  Transfer to additional paid-in capital
    of cumulative losses through date
    of Subchapter S revocation                         --         --       (5,911)      5,911        --          --          --
  Common stock offering                               6,556         66     53,505        --          --          --        53,571
  Net  income                                          --         --         --         3,156        --          --         3,156
  Foreign currency translation adjustment              --         --         --          --          (261)       --          (261)
---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1992 (Restated)              22,556        226     56,210       3,373        (261)       --        59,548
  Common stock offering                               2,300         23     22,216        --          --          --        22,239
  Common stock issued pursuant
    to stock options exercised                            6       --           59        --          --          --            59
  Net income                                           --         --         --        13,009        --          --        13,009
  Foreign currency translation adjustment              --         --         --          --           (35)       --           (35)
---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1993 (Restated)              24,862        249     78,485      16,382        (296)       --        94,820
  Common stock offerings                              4,100         41    102,052        --          --          --       102,093
  Common stock issued pursuant
    to stock options exercised                           37       --          353        --          --          --           353
  Common stock issued pursuant
      to foreign acquisitions                           535          5     12,047        --          --          --        12,052
  Net income                                           --         --         --        20,223        --          --        20,223
  Foreign currency translation adjustment              --         --         --          --           473        --           473
  Valuation adjustment for marketable securities       --         --         --          --          --          (450)       (450)
---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1994 (Restated)              29,534  $     295  $ 192,937   $  36,605   $     177   $    (450)  $ 229,564
=================================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.


                                       12
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

Micro Warehouse, Inc.
Consolidated Statements of Cash Flows
Representing Increases (Decreases) in Cash and Cash Equivalents

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------
Years Ended December 31, 1994, 1993 and 1992
(In thousands)                                                    1994        1993        1992
                                                             (Restated)  (Restated)  (Restated)
----------------------------------------------------------------------------------------------
<S>                                                           <C>         <C>         <C>     
Cash flows from operating activities:
   Net income                                                 $ 20,223    $ 13,009    $  3,156
----------------------------------------------------------------------------------------------
   Adjustments to reconcile net income to net cash
     (used) provided by operating activities:
       Depreciation and amortization                             5,313       2,528       1,941
       Value of common stock issued as compensation expense       --          --         8,775
       Deferred taxes                                           (1,644)        101      (2,012)
       Changes in assets and liabilities:
         Accounts receivable, net                              (35,740)    (20,531)    (11,879)
         Inventories                                           (32,470)    (22,427)     (9,651)
         Prepaid expenses and other current assets              (3,670)     (1,958)     (2,088)
         Due from affiliates                                       385         153        (174)
         Tax refund (1,847)                                       (857)       --
         Deposits and trademarks                                  (632)       (815)       (475)
         Accounts payable - trade                               14,714      22,596      (1,635)
         Accrued expenses                                        3,457       7,377       2,356
         Deferred revenue                                          978       1,141         656
----------------------------------------------------------------------------------------------
           Total adjustments                                   (51,156)    (12,692)    (14,186)
----------------------------------------------------------------------------------------------
             Net cash (used) provided by operating activities  (30,933)        317     (11,030)
----------------------------------------------------------------------------------------------
   Cash flows from investing activities:
     Purchase of marketable securities, net                    (16,469)    (25,179)     (3,006)
     Purchase of foreign entities, represented by:
           Goodwill                                            (10,042)     (2,200)       --
           Other net assets                                     (3,873)       (512)       --
     Acquisition of property, plant and equipment              (13,587)     (4,831)     (3,600)
----------------------------------------------------------------------------------------------
             Net cash (used) by investing activities           (43,971)    (32,722)     (6,606)
----------------------------------------------------------------------------------------------
Cash flows from financing activities:
     Net line of credit borrowings (repayments)                   --          --        (4,707)
     Net proceeds from issuance of common stock                102,446      22,298      53,571
     Borrowings from (payments to) stockholders                   --          --       (13,248)
     Payments of loan payable, consultant                         --          --        (3,298)
     Principal payments of obligations under capital leases       (171)     (3,047)       (530)
----------------------------------------------------------------------------------------------
             Net cash provided by financing activities         102,275      19,251      31,788
----------------------------------------------------------------------------------------------
Effect of exchange rate changes on cash                            473         (35)       (261)
----------------------------------------------------------------------------------------------
Net change in cash                                              27,844     (13,189)     13,891
  Cash and cash equivalents:
     Beginning of period                                         2,424      15,613       1,722
----------------------------------------------------------------------------------------------
     End of period                                            $ 30,268    $  2,424    $ 15,613
==============================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.


                                       13
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

Micro Warehouse, Inc.
Notes to the Consolidated Financial Statements
December 31, 1994 and 1993

(Dollar amounts in thousands, except per share data)

1 Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements include the Company and all subsidiaries.
All significant intercompany accounts and transactions are eliminated in
consolidation.

Years prior to 1994 are adjusted for a two-for-one stock split effective April
1994.

Certain reclassifications have been made to conform prior years to the 1994
presentation.

Cash Equivalents

All repurchase agreements and highly liquid investments with initial maturities
of three months or less are considered cash equivalents.

Marketable Securities

Marketable securities consist primarily of highly liquid tax exempt municipal
bonds.

The Company has adopted Statement of Financial Accounting Standards, "Accounting
for Certain Investments in Debt and Equity Securities," (SFAS 115) and in
accordance with the principles thereunder, has classified all of its investments
as available-for-sale securities and has reported them at fair value, with net
unrealized gains and losses included in equity. See note 11 for a discussion of
the classification and reporting of these securities at December 31, 1994. In
1993, marketable securities were reported at cost which approximated fair market
value. For all investment securities, unrealized losses that are other than
temporary are recognized in earnings.

Inventories

Inventories (all finished goods) consist of software packages and peripheral
equipment, and are stated at cost (determined under the first-in, first-out cost
method) or market, whichever is lower.

Prepaid Catalog Costs and Deferred Revenue

The costs of producing and distributing catalogs are deferred and charged to
expense over the period that each catalog remains the most current selling
vehicle (generally one to two months). Vendors have the ability to place
advertisements in the catalogs for which the Company receives advertising
allowances and incentives. These revenues are recognized on the same basis as
the catalog costs.

Property, Plant and Equipment

Property, plant and equipment (including equipment acquired under capital
leases) are stated at cost and are depreciated using accelerated and
straight-line methods over the estimated useful lives of the assets, as follows:

   Computer equipment                                5 years
   Furniture and fixtures                            7 years
   Leasehold improvements            Life of lease - 7 years
   Machinery and equipment                           5 years


                                       14
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

Intangible Assets

Intangible assets are stated at cost and are amortized using the straight-line
method over the estimated useful lives of the assets, as follows:

   Trademarks                                        5 years
   Goodwill                                         40 years

Income Taxes

Through June 29,1992, the Company elected to be taxed as an S corporation for
federal (and certain states) income tax reporting purposes. Under this election,
the individual stockholders were deemed to have received a pro rata distribution
of the federal (or state) taxable income of the Company (whether or not an
actual cash distribution was made), which was included on their personal tax
returns. Accordingly, the provisions for income taxes prior to June 30, 1992 are
for state income taxes payable to states which do not recognize S corporation
status.

Effective June 30, 1992, the Company revoked its S corporation election and
adopted Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes" (SFAS 109) to determine the components of the provisions for
income taxes as a result of the C corporation assuming the tax position of the
(terminated) S corporation (see note 10). SFAS 109 requires that deferred income
taxes be recognized for the tax consequences of "temporary differences" by
applying enacted statutory tax rates applicable to future years to differences
between the financial statement carrying amounts and the tax basis of existing
assets and liabilities.

Revenue Recognition

Revenue on product sales is recognized at the time of shipment. A reserve for
product returns is established based upon historical trends.

Net Income Per Share

Net income per share is usually based on the weighted average number of common
and common equivalent shares outstanding during each period, after retroactive
adjustment for stock splits. However, pursuant to certain rules of the
Securities and Exchange Commission, for periods prior to an initial public
offering of common stock (IPO), the calculation also includes (i) shares of
common stock issued within one year of the IPO and (ii) where repayment of
indebtedness to stockholders incurred as a result of S corporation distributions
is made from proceeds from the IPO, the number of shares required to be sold in
the offering to generate the proceeds for the repayment. Following is an
analysis of the components of the shares used to compute net income per share:

<TABLE>
<CAPTION>
                                                      1994        1993        1992
-------------------------------------------------------------------------------------
<S>                                                <C>         <C>         <C>       
Shares outstanding as of December 31, 1991         15,600,000  15,600,000  15,600,000
Shares issued within one year of the IPO              400,000     400,000     400,000
Required number of shares to be sold (at the
  IPO price of $9 a share) in the IPO to generate
  proceeds for repayments of indebtedness to S
  corporation shareholders and a consultant              --          --     1,474,958
Weighted average shares outstanding related to:
  The IPO                                           6,555,000   6,555,000     377,136
  Follow-on public offerings                        4,110,959     845,480        --
  Acquisitions of foreign subsidiaries                356,017        --          --
Incremental shares related to stock options           595,599     132,260       1,738
                                                   ----------------------------------
                                                   27,617,575  23,532,740  17,853,832
                                                   ==================================
</TABLE>


                                       15
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

Foreign Currency Translation

Assets and liabilities of foreign subsidiaries are translated into U.S. dollars
at the exchange rate in effect at the balance sheet date or at historical rates,
as applicable. Revenue and expenses are translated at average rates in effect
during the period. The resultant translation adjustment is reflected as a
separate component of stockholders' equity on the balance sheet.

Unaudited Pro Forma and Condensed Quarterly Data

In the opinion of management, the unaudited pro forma and condensed quarterly
financial data (in note 15) reflect all adjustments consisting of recurring
accruals and pro forma adjustments (described in note 16) which are necessary to
a fair statement of the results of operations for the periods presented.

2 Restatement of Prior Period Results

The Company has restated previously issued financial results for each of the
quarters and for the full years ended December 31, 1994, 1993 and 1992. The
restated financial results reflect errors in its accounting procedures primarily
related to accrued inventory liabilities and trade payables. The following
summarizes the impact of the restatement.

                                              1994          1993          1992
                                              ----          ----          ----
Costs of goods sold                                                    
   As previously reported                   $626,684      $361,481      $217,078
   As restated                               639,717       363,636       218,219
                                                                       
Gross profit                                                           
   As previously reported                   $149,693      $ 88,904      $ 52,556
   As restated                               136,660        86,749        51,415
                                                                       
Selling, general and administrative                                    
  expenses                                                             
   As previously reported                   $104,341      $ 63,407      $ 39,021
   As restated                               104,408        64,596        39,732
                                                                       
Income from operations                                                 
   As previously reported                   $ 45,352      $ 25,497      $  4,760
   As restated                                32,252        22,153         2,908
                                                                       
Net income*                                                            
   As previously reported                   $ 28,017      $ 14,999      $  6,945
   As restated                                20,223        13,009         5,869
                                                                       
Net income per share*                                                  
   As previously reported                   $   1.01      $   0.64      $   0.39
   As restated                                  0.73          0.55          0.33
                                                                       
Accounts payable - trade                                               
   As previously reported                   $ 30,535      $ 28,921      $  9,669
   As restated                                48,831        34,117        11,521
                                                                       
Retained earnings                                                      
   As previously reported                   $ 46,687      $ 18,670      $  3,671
   As restated                                36,605        16,382         3,373

*Pro forma for 1992                                                 


                                       16
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

3 Property, Plant and Equipment

Property, plant and equipment consists of:
                                                        1994         1993
-------------------------------------------------------------------------
Computer equipment                                   $18,816      $10,856
Furniture and fixtures                                 3,479        1,416
Leasehold improvements                                 4,143        1,525
Machinery and equipment                                4,439        1,890
-------------------------------------------------------------------------
                                                      30,877       15,687
-------------------------------------------------------------------------
Less accumulated depreciation and amortization        11,201        6,375
-------------------------------------------------------------------------
                                                     $19,676      $ 9,312
=========================================================================

4 Borrowing Arrangements

Line of Credit

At December 31, 1994 and 1993, the Company had a $15,000 unused line of credit
in the United States. The line of credit provides for unsecured borrowing with
interest at the bank's prime rate minus 0.75% or LIBOR plus 1.0%.

At December 31, 1994, the Company also had a (pound)750 unused line of credit in
the United Kingdom. The line also provides for unsecured borrowing with interest
at the bank's base rate plus 1.5%.

Equipment Obligations

The Company is obligated under notes for computer equipment expiring in the year
1999. Interest on these notes is at approximately 5%.

As of December 31, 1994, future minimum lease payments are as follows:

         1995                                                        $210
         1996                                                         230
         1997                                                         230
         1998                                                         230
         1999                                                          20
         ----------------------------------------------------------------
         Total maximum lease payments                                 920
         ----------------------------------------------------------------
           Less amounts representing interest                          80
         ----------------------------------------------------------------
           Present value of net minimum lease payments                840
         ----------------------------------------------------------------
            Less current maturities                                   195
         ----------------------------------------------------------------
         Long-term portion                                           $645
         ================================================================

5 Goodwill, Deposits and Trademarks

Amounts consist of:
                                                    1994            1993
--------------------------------------------------------------------------
Goodwill                                         $ 24,155        $  2,200
Less:  amortization                                  (114)           --
--------------------------------------------------------------------------
                                                 $ 24,041        $  2,200
==========================================================================
Deposits                                         $    439        $    483
Trademarks                                          1,538             862
--------------------------------------------------------------------------
                                                    1,977           1,345
Less: amortization                                   (410)           (166)
--------------------------------------------------------------------------
                                                 $  1,567        $  1,179
==========================================================================
                                            
6 Accrued Expenses


                                       17
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

Accrued expenses at December 31, 1994 and 1993 include approximately $5,500 and
$2,900, respectively, of accrued catalog costs.

7 Stockholders' Equity

Initial and Follow-On Public Offerings

In December 1992, the Company issued 6,555,000 shares of common stock, which
included 855,000 shares issued pursuant to the underwriters over-allotment
option, at $9.00 a share in an IPO. The proceeds to the Company were $53,249 net
of the underwriting discount of $4,130 and other direct expenses of $1,616,
including $322 recorded in 1993. In August 1993, the Company issued 2,300,000
shares of common stock, which included 300,000 shares issued pursuant to the
underwriters over-allotment option, at $10.50 per share in a follow-on offering.
The proceeds to the Company were $22,562 net of the underwriting discount of
$1,207 and other direct expenses of $381. On April 18, 1994, the Company issued
2,000,000 shares of common stock at $21.25 per share in a follow-on offering.
The proceeds to the Company, net of the underwriting discount ($2,020) and other
direct expenses ($301), were $40,179. On October 21, 1994, the Company issued
2,100,000 shares of common stock at $31.00 per share in a follow-on offering.
The proceeds to the Company, net of the underwriting discount ($2,940) and other
direct expenses ($246), were $61,914.

1992 and 1994 Stock Option Plans

The 1992 and 1994 Stock Option Plans (the "Plans") provide for the grant of
stock options to officers, directors and key employees of, and consultants to,
the Company and its subsidiaries. Under the Plans, the Company may grant options
that are intended to qualify as incentive stock options ("Incentive Stock
Options") within the meaning of Section 422A of the Internal Revenue Code of
1986, as amended (the "Code"), or options not intended to qualify as Incentive
Stock Options ("Nonstatutory Stock Options"). A total of 1,500,000 shares of
common stock have been reserved for issuance upon the exercise of options
granted under the Plans.

The Plans are administered by the Compensation and Stock Option Committee of the
Board of Directors. Subject to the provisions of the Plans, the Committee has
the authority to select the employees, directors and consultants to whom options
are granted and determine the terms of each option, including (i) the number of
shares of common stock covered by the option, (ii) when the option becomes
exercisable, (iii) the option exercise price, which must be at least 100%, with
respect to Incentive Stock Options, and at least 85%, with respect to
Nonstatutory Stock Options, of the fair market value of the common stock as of
the date of grant, and (iv) the duration of the option (which may not exceed ten
years). All options are nontransferable other than by will or the laws of
descent and distribution.

Following is the activity under the Plans:

                                                            Number of Shares
                                                            1994         1993
-------------------------------------------------------------------------------
Shares:
  Outstanding at January 1                                 842,400      119,950
  Granted at $9.00 to $31.00 a share                       200,800      733,300
  Exercised at $9.00 to $11.38 a share                     (36,891)      (6,184)
  Canceled or expired at $9.00 to $22.50 a share           (45,901)      (4,666)
-------------------------------------------------------------------------------
  Outstanding, December 31 at $9.00 to $31.00 a share      960,408      842,400
===============================================================================
  Exercisable, December 31 at $9.00 to $15.94 a share      148,722
===============================================================================
  Available for grant, December 31                         496,517
===============================================================================

8 Commitments


                                       18
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

Leases

The Company rents some of its office facilities from affiliates and also
occupies office and warehouse space under various operating leases with
independent parties which provide for minimum annual rentals and escalations
based on increases in real estate taxes and other operating expenses.

Minimum annual rentals at December 31, 1994 were as follows:

                                                                Related
                                               Total             Party

1995                                          $ 3,121             $ 312
1996                                            2,977               312
1997                                            3,037               312
1998                                            2,665              --
1999                                            1,914              --
2000 and after                                  3,731              --
-----------------------------------------------------------------------
Total                                         $17,445             $ 936
=======================================================================
                                                                 
Rent expense was as follows:                                   

                                                     Rent Expense
Year Ended December 31,                        Total           Related Party
----------------------------------------------------------------------------
1994                                          $3,492              $ 312
1993                                           1,357                312
1992                                             869                312

The Company has an agreement with a consultant through December 1996 for an
annual fee of $100.

401(k) Savings Plan

Effective July 1,1992, the Company adopted a 401(k) Savings Plan which covers
substantially all full-time employees who meet the plan's eligibility
requirements. Participants may make tax deferred contributions of up to 15% of
annual compensation (subject to other limitations specified by the Internal
Revenue Code) and the Company will make a 25% matching contribution for amounts
which do not exceed 6% of participant's annual compensation. The Company may
also make discretionary profit sharing contributions to the Plan. During 1994
and 1993, the Company incurred approximately $293 and $180, respectively, of
expense related to the 401(k) matching component of this Plan.

9 Special Incentive Compensation

Effective January 1,1989, the Company entered into an agreement for marketing
services with a consultant which required (in addition to a fixed annual fee) a
special incentive payment equal to one-third of the Company's profits before
taxes. The agreement had no specific term.

An employment agreement with an executive officer entered into in August 1991
required the Company to accrue as additional incentive compensation the vested
value of phantom stock up to a maximum of 2.5% of the common shares outstanding
based on a formula.

As of January 1, 1992, the foregoing incentive arrangements were terminated. As
of that date, the consultant received an irrevocable right to receive a 30%
interest in the Company through a transfer of shares by the existing
stockholders and the executive officer received a 2.5% equity interest through
the issuance of previously unissued shares of common stock. In order to
determine the amount to be recorded as compensation expense as of the


                                       19
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

termination date, the Company engaged an independent appraiser to estimate the
fair market value per share of its common stock.

10 Income Taxes

Termination of S Corporation Status

As a result of the Company terminating its S corporation status on June 30,1992,
the C corporation assumed the tax bases of the assets and liabilities of the
(terminated) S corporation. Concurrently, the Company adopted SFAS 109 in order
to determine the components of the provision for income taxes.

Components of the net deferred tax asset relate to:

<TABLE>
<CAPTION>
                                                                              Initial
                                                          December 31         June 30,
                                                   1994      1993      1992      1992
                                                                  (Restated)
--------------------------------------------------------------------------------------
<S>                                              <C>       <C>       <C>       <C>    
Deferred tax assets:
   Value of additional incentive compensation    $  --     $  --     $   866   $ 3,402
   Valuation reserves:
     Accounts receivable                           1,004       651       451       446
     Inventory                                       850       280       178       113
     Refunds payable                                 211       182       158      --
     Investments                                     370      --        --        --
     Medical insurance                               338       249      --        --
   Required capitalization of additional cost
      into inventory for tax reporting purposes      473       273       283        68
   Other                                             860       401        76        18
   Foreign tax loss carryforwards                  2,047     1,174       298      --
   Valuation allowance for loss carryforwards     (2,047)   (1,174)     (298)     --
--------------------------------------------------------------------------------------
     Total deferred tax asset                      4,106     2,036     2,012     4,047
--------------------------------------------------------------------------------------
Deferred tax liability:
   Property, plant and equipment                    (551)     (125)     --        --
--------------------------------------------------------------------------------------
     Net deferred tax asset                      $ 3,555   $ 1,911   $ 2,012   $ 4,047
======================================================================================
</TABLE>

Provision for Income Taxes

Income before income taxes for 1994 was comprised of: U.S. - $34,927 (Restated)
and Foreign - $(1,086). The provision for income taxes for the years ended
December 31, 1994, 1993 and 1992 were as follows:

<TABLE>
<CAPTION>
                       
                         1994 (Restated)                   1993 (Restated)                   1992 (Restated)
                 Current    Deferred      Total    Current    Deferred      Total     Current   Deferred       Total
                 -------    --------      -----    -------    --------      -----     -------   --------       -----
<S>              <C>        <C>          <C>        <C>          <C>       <C>         <C>      <C>           <C>    
Federal          $13,090    $(1,472)     $11,618    $7,657       $133      $7,790      $ --     $(1,439)      $(1,439)
State              1,201       (131)       1,070     1,677         29       1,706        500       (573)          (73)
Foreign              971        (41)         930       165        (61)        104        --         --           --
---------------------------------------------------------------------------------------------------------------------
Total            $15,262    $(1,644)     $13,618    $9,499       $101      $9,600      $ 500    $(2,012)      $(1,512)
=====================================================================================================================
</TABLE>

The 1992 provision is a combination of taxes for the six months then ended
(period for which the Company was a C corporation) and the full year (state
taxes where S corporation status is not recognized).


                                       20
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

The following table accounts for the difference between the actual tax provision
and the amounts obtained by applying the statutory U.S. Federal income tax of
35% in 1994 and 1993 and 34% in 1992 to income before taxes.

Effective tax rate reconciliation (percent):

                                           1994            1993          1992*
                                      (Restated)      (Restated)     (Restated)
------------------------------------------------------------------------------
Statutory federal tax rate                 35.0            35.0           34.0
State income taxes net of 
  Federal benefit                           2.0             4.6            7.9
Tax-exempt interest income                 (2.6)           (1.0)            --
Foreign income tax                          1.3             2.6            1.4
Other, net                                  4.5             1.3             .4
------------------------------------------------------------------------------
Effective tax rate                         40.2            42.5           43.7
==============================================================================

*Pro forma

11 Investment Securities

As discussed in note 1, the Company adopted SFAS 115 and, accordingly, has
classified its securities as available for sale. As of December 31, 1994, the
Company recognized a net unrealized loss of $450 as a direct charge to equity.

The following is a summary of securities at December 31, 1994:

<TABLE>
<CAPTION>
                                                                       Gross         Gross
                                       Amortized      Unrealized     Unrealized      Fair
                                          Cost           Gains         Losses        Value
-------------------------------------------------------------------------------------------
<S>                                     <C>             <C>            <C>          <C>    
Securities available-for-sale
   Governmental obligations             $44,654         $     3        $   453      $44,204
</TABLE>

12 Supplemental Disclosures of Cash Flow Information

<TABLE>
<CAPTION>
                                                          1994           1993         1992
-------------------------------------------------------------------------------------------
<S>                                                     <C>            <C>          <C>    
Cash paid during the year for:
   Interest                                             $   249        $   122      $ 1,276
   Income taxes                                          17,407         10,252          258
Noncash investing and financing activities:                          
   Goodwill established through issuance                             
     of common stock                                     11,913           --            --
   Equipment acquired under capital lease obligations     1,021            876        1,649
</TABLE>
                                                                     
13 Acquisitions of Foreign Operations                              

During 1994, the Company acquired eight businesses with operations in Holland,
Belgium, Finland, Norway, Sweden, France, Mexico and Canada. The purchase price
composed of approximately $13,915 in cash and 335,000 common shares with an
average market value of approximately $22.50. The aggregate goodwill was
$17,580.

On December 1, 1993 the Company acquired through newly-formed foreign
subsidiaries, businesses with operations in Denmark, Norway and Sweden. The
purchase price included approximately $2,700 in cash and up to 200,000 common
shares, contingent upon the businesses achieving sales and earnings goals in
1994 and 1995. In an effort to synchronize its global operational and strategic
objectives, the Company waived the contingencies in 


                                       21
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

January 1994 and issued the full amount of the aforementioned common shares
(which are restricted as to sale). The value of these shares ($4,514) was added
to goodwill in 1994.

14 Operations by Geographic Areas

The Company operates primarily in one industry segment, the distribution of
computer hardware, software, supplies and accessories. Information about the
Company's operations in different geographic areas for the years ended December
31, 1994 and 1993 are presented below. European operations in 1992 were nominal.

                                   North America        Europe     Consolidated
1994                                  (Restated)                     (Restated)
-------------------------------------------------------------------------------
Net operating revenues                  $652,116      $124,261         $776,377
Income (loss) from operations             33,338        (1,086)          32,252
Identifiable operating assets            233,588        63,972          297,560
                                                                  
                                   North America        Europe     Consolidated
1993                                  (Restated)                     (Restated)
-------------------------------------------------------------------------------
Net operating revenues                  $417,804      $ 32,581         $450,385
Income (loss) from operations             23,955        (1,802)          22,153
Identifiable operating assets            128,086        14,741          142,827

15 Quarterly Financial Data (Unaudited)

Selected quarterly financial data for the years ended December 31, 1994, 1993
and 1992:

<TABLE>
<CAPTION>
                                                    First       Second        Third       Fourth
                                                  Quarter      Quarter      Quarter      Quarter
------------------------------------------------------------------------------------------------
<C>                                              <C>          <C>          <C>          <C>     
1994 (Restated): Net sales                       $156,839     $166,967     $201,330     $251,241
                 Gross profit                      30,592       29,558     $ 33,279       43,231
                 Net income                         5,300        5,167      $ 3,809        5,947
                 Net income per share               $0.21        $0.19        $0.14        $0.20
                 Weighted average number
                   of shares outstanding           25,488       27,246       27,846       29,606

1993 (Restated)  Net sales                        $98,783     $101,527     $109,415     $140,660
                 Gross profit                      19,039       19,936       21,251       26,523
                 Net income                         2,093        2,820        3,419        4,677
                 Net income per share               $0.09        $0.12        $0.14        $0.19
                 Weighted average number of
                   shares outstanding              22,624       22,626       23,692       25,190

1992 (Restated): Net sales                        $58,113      $61,592      $66,917      $83,012
                 Gross profit                      10,883       11,432      $12,064       17,036
                 Pro forma net income               1,440        1,261      $ 1,275        1,893
                 Pro forma net income per share     $0.08        $0.07        $0.07        $0.10
                 Weighted average number of
                   shares outstanding              17,565       17,565       17,565       18,710
</TABLE>

The four quarterly amounts of net income per share in each year do not equal
amounts for the full year due to rounding.


                                       22
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

16  Pro Forma Adjustments (Unaudited)

The following pro forma adjustments have been made to the historical results of
1992 operations to make the presentations more meaningful in relation to future
periods:

(a) Elimination of amounts of special incentive compensation - see note 9. The
amount represents the value of common stock transferred to the consultant (by
the existing stockholders) and issued to an employee (by the Company) to
terminate the incentive portion (based on income before taxes) of their
respective agreements. The value was based on an independent appraisal of the
Company's common stock at January 1, 1992.

(b) Computation of income taxes which would have been recorded had the Company
been a C corporation for the entire year and after eliminating the compensation
in (a).

The 1992 combined historical and pro forma provisions for income tax expense
were as follows:

                                   Federal                State
                             Current    Deferred    Current   Deferred   Total
-------------------------------------------------------------------------------
Historical (Restated)         $ --      $(1,439)     $ 500     $(573)   $(1,512)
Pro forma adjustment
  (Restated)                   3,415      1,271        870       506      6,062
-------------------------------------------------------------------------------
                                                                         $4,550
-------------------------------------------------------------------------------

17 Subsequent Events

Offerings of Common Stock

In October 1995, the Company sold 1,200,000 shares of common stock in its fourth
follow-on public offering which yielded net proceeds of $50,867. Funds were used
for acquisitions (see Acquisitions below) and working capital.

Acquisitions

During 1995 and 1996, the Company acquired ten businesses (seven foreign and
three domestic) in transactions accounted for as purchases. The aggregate
purchase price was $57,658, of which $56,514 was paid in cash and the balance
represented the fair value of 26,000 shares of common stock issued to the former
owners. Aggregate goodwill was $46,925. In 1996, the Company wrote off all the
remaining goodwill ($6,000) related to those Macintosh-only businesses acquired.

On January 25, 1996, the Company acquired Inmac Corp. through an exchange of
3,033,682 of its shares for all of Inmac's 10,816,836 shares in a transaction
accounted for as a pooling of interests. In connection therewith, the Company
recorded (i) $21,200 of restructuring charges, primarily for personnel and
facilities matters; (ii) $6,113 for merger costs; and (iii) an extraordinary
charge of $1,600 (net of tax benefit of $1,100) related to a mandatory
prepayment to extinguish certain Inmac indebtedness.

Under pooling of interest accounting, all of the Company's consolidated
financial statements as of and for periods prior to the acquisition of Inmac are
generally required to be restated as though the merger took place at the
beginning of the earliest period presented. Since the nature of this amendment
of the Company's Form 10-K relates to historical information, the consolidated
financial statements included herein have not been restated for the Inmac
acquisition.


                                       23
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

Legal Proceedings

During October, November and December 1996, the Company and certain of its
directors and officers were named as defendants in eleven lawsuits brought in
the United States District Court for the District of Connecticut by parties
which seek to represent classes of stockholders who purchased shares of the
Company's common stock during different periods between January 1994 and
September 1996, or exchanged shares in a merger transaction completed in January
1996. These lawsuits advance claims under various provisions of the federal
securities laws and the common law and assert that various misleading
disclosures were made concerning the Company's financial performance and
condition and other related circumstances during the periods described and seek
unspecified monetary damages and, in certain instances, rescission. The lawsuits
followed and are predicated upon the Company's announcements in September and
October 1996 that it intended to restate certain prior financial statements. The
matters are all at an initial stage. Neither the Company nor the other
defendants have responded to any of them.

In December 1996 and January 1997, the Company and certain of its directors and
officers were named as defendants in two largely identical lawsuits brought in
the Superior Court of Santa Clara County, San Jose, California. The lawsuits
arise out of the stock merger between the Company and Inmac Corp. on January 25,
1996. The claims and defendants are generally similar to those being asserted in
the various class actions described above. Neither the Company nor the other
defendants have responded to either of them.

In November 1996, a shareholder derivative action was filed in the United States
District Court for the District of Connecticut, purportedly on behalf of, and
for recovery by, the Company, which is named as a nominal defendant. The
complaint charges certain directors and officers with violation of fiduciary
duties in selling Company stock while in possession of non-public information
and in causing or permitting the exposure of the Company to damage, such as
through the class litigation described above, attributable to the same
circumstances that are the subject of the class litigation. The Company and the
individual defendants have filed a Motion to Dismiss the Complaint which is
pending before the Court.

The plaintiffs in these lawsuits seek unspecified compensatory damages, other
relief, legal fees and litigation costs. The Company is unable to predict the
outcome or potential financial impact of this litigation, and accordingly has
made no provision therefor in the consolidated financial statements.

In addition, the staff of the Securities and Exchange Commission is conducting
an informal inquiry into the events that underlie the Company's announced
intention to restate certain prior period financial statements. The Company is
cooperating with the staff in its investigation.



                                       24
<PAGE>

RESTATED - SEE "INTRODUCTORY NOTE"

                                   SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

                                        MICRO WAREHOUSE, INC.


                                        By /s/ Linwood A. Lacy, Jr.
                                           -------------------------------------
                                           Linwood A. Lacy, Jr.
                                           President, Chief Executive Officer,
                                           Acting Chief Financial Officer and
                                           Acting Chief Accounting Officer

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report on Form 10-K/A for the year ended December 31, 1994 has been signed below
by the following persons on behalf of the Registrant and in the capacities and
on the dates indicated.

   Signature                           Title                          Date
   ---------                           -----                          ----


/s/ Peter Godfrey           Chairman of the Board               February 6, 1997
--------------------------
Peter Godfrey


/s/ Linwood A. Lacy, Jr.    President, Chief Executive Officer, February 6, 1997
--------------------------  Acting Chief Financial Officer,
Linwood A. Lacy, Jr.        Acting Chief Accounting Officer
                            and Director
                            (Principal Executive Officer and
                             Principal Financial Officer)


/s/ Felix Dennis            Director                            February 6, 1997
--------------------------
Felix Dennis


/s/ Frederick H. Fruitman   Director                            February 6, 1997
--------------------------
Frederick H. Fruitman     


/s/ Melvin R. Seiler        Executive Vice President, Chief     February 6, 1997
--------------------------  Operating Officer and Director
Melvin R. Seiler          


/s/ Joseph M. Walsh         Director                            February 6, 1997
--------------------------
Joseph M. Walsh           


                                       25