MIAMI COMPUTER SUPPLY CORP, S-1/A, 1998-06-05

MIAMI COMPUTER SUPPLY CORP
S-1/A, 1998-06-05
PROFESSIONAL & COMMERCIAL EQUIPMENT & SUPPLIES

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 5, 1998

REGISTRATION NO. 333-53639

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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
TO THE
FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MIAMI COMPUTER SUPPLY CORPORATION

(Exact name of registrant as specified in its articles of incorporation)

<TABLE>
<S> <C> <C>
OHIO 5110 31-1001529
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) Number)
</TABLE>

4750 HEMPSTEAD STATION DRIVE
DAYTON, OHIO 45429
(937) 291-8282

(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

MICHAEL E. PEPPEL
PRESIDENT AND CHIEF EXECUTIVE OFFICER
MIAMI COMPUTER SUPPLY CORPORATION
4750 HEMPSTEAD STATION DRIVE
DAYTON, OHIO 45429
(937) 291-8282

(Name and address, including zip code, of agent for service)
------------------------

COPIES TO:

TIMOTHY B. MATZ, ESQ. ANDREW C. LYNCH, ESQ.
JEFFREY A. KOEPPEL, ESQ. E. LEIGH GILLETT, ESQ.
Elias, Matz, Tiernan & Herrick L.L.P. Jenkens & Gilchrist, P.C.
734 15th Street, N.W., 12th Floor 1919 Pennsylvania Avenue, N.W., Suite
Washington, D.C. 20005 600
Washington, D.C. 20006-3404

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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.

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<PAGE>

SUBJECT TO COMPLETION, DATED JUNE 4, 1998

INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>

PROSPECTUS

[LOGO]

MIAMI COMPUTER SUPPLY CORPORATION
2,100,000 SHARES OF COMMON STOCK

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

Miami Computer Supply Corporation (the "Company") is hereby offering (the
"Offering") for sale 2,100,000 shares of its common stock, without par value per
share (the "Common Stock").

The Common Stock is quoted on the Nasdaq National Market System ("Nasdaq")
under the symbol "MCSC." The last sale price of the Common Stock on June 2,
1998, as reported on Nasdaq, was $17.75 per share. See "Price Range of Common
Stock and Dividend Policy."

THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" BEGINNING ON PAGE 8 HEREOF FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED CAREFULLY BY PROSPECTIVE PURCHASERS.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
UNDERWRITING PROCEEDS TO
PRICE TO PUBLIC DISCOUNT(1) COMPANY(2)
<S> <C> <C> <C>
Per Share.......................................... $ $ $
Total(3)........................................... $ $ $
</TABLE>

(1) The Company has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended. See "Underwriting."

(2) Before deducting expenses of the Offering payable by the Company, estimated
to be $600,000.

(3) The Company has granted the Underwriters a 30-day option to purchase up to
315,000 additional shares of Common Stock to cover over-allotments. If all
such shares of Common Stock are purchased, the total Price to Public,
Underwriting Discount and Proceeds to Company will be $ , $ and $ ,
respectively. See "Underwriting."

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

The shares of Common Stock are offered by the several Underwriters, subject
to receipt and acceptance by the Underwriters, approval of certain legal matters
by counsel for the Underwriters and certain other conditions. The Underwriters
reserve the right to withdraw, cancel or modify such offers and reject orders in
whole or in part. It is expected that certificates representing the shares of
Common Stock will be available for delivery on or about , 1998, at the
offices of Friedman, Billings, Ramsey & Co., Inc. in Arlington, Virginia.
------------------------

FRIEDMAN, BILLINGS, RAMSEY & CO., INC.

WILLIAM BLAIR & COMPANY

MORGAN KEEGAN & COMPANY, INC.

The date of this Prospectus is , 1998.
<PAGE>

[Inside front cover]

[Color photograph of the various namebrand computer supplies, office
automation and projection presentation products sold by the Company.]

[Photo caption:]

Miami Computer Supply Corporation distributes more than 23,500 products from
over 500 original equipment manufacturers to its approximately 25,000 customers
throughout the United States and overseas.

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CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE SHORT COVERING
TRANSACTIONS AND THE IMPOSITION OF PENALTY BIDS. IN CONNECTION WITH THE
OFFERING, CERTAIN UNDERWRITERS AND SELLING GROUP MEMBERS MAY ENGAGE IN PASSIVE
MARKET MAKING TRANSACTIONS IN THE COMMON STOCK ON THE NASDAQ NATIONAL MARKET IN
ACCORDANCE WITH RULE 103 OF REGULATION M. SEE "UNDERWRITING."

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

The Company maintains a service mark for the name "Miami Computer Supply
Corporation"-Registered Trademark-, the logo design "Circle Logo
Design"-Registered Trademark-, the slogan "Computer Supplies. Right.
Now."-Registered Trademark-, the symbol "MCSI"-Registered Trademark- and the
trade name "Miami Computer Supply International"-Registered Trademark-. All
other trademarks or registered trademarks or service marks appearing herein are
trademarks or registered trademarks or service marks of the respective companies
that utilize them.
<PAGE>
PROSPECTUS SUMMARY

THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ IN
CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND CONSOLIDATED FINANCIAL
STATEMENTS AND THE NOTES THERETO APPEARING ELSEWHERE IN THIS PROSPECTUS. THIS
PROSPECTUS CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS WHICH INVOLVE SUBSTANTIAL
RISKS AND UNCERTAINTIES. THESE FORWARD-LOOKING STATEMENTS CAN GENERALLY BE
IDENTIFIED AS SUCH BECAUSE THE CONTEXT OF THE STATEMENT INCLUDES WORDS SUCH AS
THE COMPANY "BELIEVES," "ANTICIPATES," "EXPECTS," "ESTIMATES," "INTENDS," OR
OTHER WORDS OF SIMILAR INTENT. SIMILARLY, STATEMENTS THAT DESCRIBE THE COMPANY'S
FUTURE PLANS, OBJECTIVES AND GOALS ARE ALSO FORWARD-LOOKING STATEMENTS. THE
COMPANY'S ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS COULD DIFFER MATERIALLY
FROM THOSE EXPRESSED OR IMPLIED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT
OF CERTAIN FACTORS, INCLUDING THOSE SET FORTH IN "RISK FACTORS" AND ELSEWHERE IN
THIS PROSPECTUS. EXCEPT AS OTHERWISE INDICATED HEREIN, THE INFORMATION IN THIS
PROSPECTUS HAS BEEN ADJUSTED TO REFLECT THE 3-FOR-2 STOCK SPLIT (THE "STOCK
SPLIT") WHICH WAS PAYABLE ON APRIL 24, 1998 TO STOCKHOLDERS OF RECORD AS OF
APRIL 10, 1998. UNLESS THE CONTEXT OTHERWISE REQUIRES, REFERENCES TO MIAMI
COMPUTER SUPPLY CORPORATION OR THE COMPANY INCLUDE ITS WHOLLY OWNED
SUBSIDIARIES.

THE COMPANY

Miami Computer Supply Corporation is a leading distributor of computer and
office automation supplies and accessories, projection presentation products and
video conferencing equipment throughout the United States and in certain foreign
countries. The Company distributes over 1,800 core products to approximately
25,000 customers comprised primarily of small to medium-size businesses and, to
a lesser extent, governmental, educational and institutional customers.

Internal sales growth has primarily resulted from the high level of customer
service that the Company attributes to its experienced, knowledgeable and
motivated sales force, and to the Company's automated procedures that facilitate
the fulfillment of customer orders accurately and on an overnight basis. The
Company's internal growth has also been supported by recruitment of sales
personnel in new geographic markets.

Since 1991, the Company has acquired nine regional computer and office
automation supply companies and two projection presentation products companies,
eight of which were acquired between April 1997 and March 1998. These eight
acquisitions accounted for $19.7 million of the Company's $107.5 million in net
sales for the year ended December 31, 1997 and for $33.2 million of the
Company's $55.2 million in net sales for the three months ended March 31, 1998.
On June 3, 1998, the Company entered into a definitive agreement to acquire
Electronic Image Systems, Inc., Bellevue, Washington, a distributor and
integrator of audio-visual presentation products and services which had total
sales of $10.3 million and total assets of $3.1 million (unaudited) as of and
for the year ended December 31, 1997. This agreement is expected to be closed in
the second quarter of fiscal year 1998, but is not considered to be material to
the Company's financial condition or results of operations.

The Company believes it is currently the largest independent computer and
office automation supply and projection presentation products distributor in the
United States and the only company focused on acquiring companies exclusively in
this industry. The Company intends to continue to increase net sales through the
acquisition of other computer and office automation supply and projection
presentation products companies, by continuing to offer exceptional customer
service and by expanding into new geographic markets.

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<PAGE>
The Company sells primarily nationally-known, name-brand products
manufactured by approximately 500 original equipment manufacturers, including
Hewlett-Packard Company ("Hewlett-Packard"), Canon Corporation ("Canon"),
Lexmark International, Inc. ("Lexmark"), and Imation Corp. ("Imation"), for
computer and office automation supplies; Sharp Electronics Corporation
("Sharp"), Epson America, Inc. ("Epson"), and Proxima Corporation ("Proxima"),
for projection presentation products; and the Intel Team Station for video
conferencing products. The Company's products include consumable supplies such
as laser toner, copier toner, facsimile machine supplies, ink jet cartridges,
printer ribbons, diskettes, computer tape cartridges and accessories, computer
projection presentation hardware and video conferencing hardware and software.

The Company's primary sales and distribution center is located in Dayton,
Ohio. The Company operates thirteen smaller regional sales and distribution
centers. The Company also maintains a limited inventory of frequently ordered
products in 35 of its other sales offices in order to facilitate same day
delivery.

Industry sources estimate that in 1997 the retail computer and office
automation supply and projection presentation products market in the United
States totaled approximately $29.4 billion. The Company estimates an annual
growth rate of approximately 6.0% to 8.0% for computer and office automation
supplies over the next two years and approximately 30.0% for projection
presentation products in 1998. The Company believes that the current size and
potential growth of the industry are attributable to: (i) increasing automation
of the workplace as evidenced by the widespread use of personal computers
("PCs") and computer networks; (ii) a decline in the prices of computer hardware
and peripherals making them more affordable to small and medium-size businesses
and to individuals; (iii) the advent and growth of high quality printers that
require more consumable supplies than older, less sophisticated printers; and
(iv) improved business presentation and graphics software that results in
increased use of projection presentation hardware.

The Company's objective is to enhance its position as a leading distributor
of computer and office automation supplies and projection presentation products
and to continue to increase net sales and net income through effective
implementation of its operating and growth strategies. The Company's operating
strategies include: (i) providing superior customer service; (ii) offering broad
product selection at competitive prices; (iii) capitalizing on its niche focus
and market presence in its industry; (iv) developing and maintaining strong
vendor relationships; (v) increasing profitability through well managed growth;
and (vi) utilizing technology to improve operations. The Company's growth
strategies include: (i) pursuing complementary, accretive acquisitions; (ii)
increasing sales to existing customers; and (iii) increasing sales to new
customers in expanded geographic markets.

Much of the Company's growth in net sales has occurred subsequent to a
management transition that occurred in 1996. In May 1996, the founding
stockholders of the Company sold 70.0% of the Common Stock of the Company to an
investor group, Pittsburgh Investment Group LLC ("LLC"), that includes four
directors (including the President) of the Company, the FBR Private Equity Fund,
L.P., a Delaware limited partnership (the "FBR Fund") (in which an affiliate of
Friedman, Billings, Ramsey & Co., Inc. ("FBR"), one of the underwriters, serves
as the general partner, and the principals and employees of FBR own limited
partnership interests) and a general partnership composed of certain members of
the Company's

4
<PAGE>
special counsel. See "Certain Transactions--Related Party Transactions--Prior
Transactions." The Company completed its initial public offering of 1,150,000
shares of Common Stock in November 1996 at $8.50 per share, currently equivalent
to 1,725,000 shares at $5.67 per share after taking into account the Stock
Split.

The Company's principal executive offices are located at 4750 Hempstead
Station Drive, Dayton, Ohio, 45429 and its telephone number is (937) 291-8282.

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered.............. 2,100,000 shares(1)

Common Stock to be outstanding
after the Offering.............. 10,223,964 shares(1)(2)

Use of proceeds................... To repay indebtedness and for general corporate
purposes.

Nasdaq National Market symbol..... MCSC
</TABLE>

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(1) Assumes that the Underwriters' over-allotment option to purchase up to
315,000 shares of Common Stock is not exercised.

(2) Based on 8,123,964 shares outstanding as of June 2, 1998. Does not include
1,275,000 shares of Common Stock reserved for issuance under the Company's
employee stock option and non-employee director stock option plans including
441,525 shares of Common Stock subject to options outstanding at June 2,
1998.

5
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL DATA

The summary consolidated financial data set forth below for the years ended
December 31, 1993, 1994, 1995, 1996 and 1997 have been derived from consolidated
financial statements of the Company which have been audited by Price Waterhouse
LLP, independent accountants, whose report as of December 31, 1996 and 1997 and
for each of the three years in the period ended December 31, 1997 is included
elsewhere in this Prospectus. The summary consolidated financial data set forth
below for the three months ended March 31, 1997 and 1998 have been derived from
unaudited consolidated financial statements of the Company which, in the opinion
of management, contain all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of those financial statements.
The summary consolidated financial data set forth below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Consolidated Financial Statements of the
Company, and accompanying notes thereto, included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
Three Months Ended
Year Ended December 31, March 31,
----------------------------------------------------- -------------------------
1993 1994 1995 1996(1) 1997(2) 1997 1998(2)
--------- --------- --------- --------- --------- --------- --------------
(Dollars in thousands, except per share data)

<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.......................... $ 29,045 $ 35,690 $ 43,321 $ 63,428 $ 107,487 $ 20,226 $ 55,164
Cost of sales...................... 23,308 28,250 34,642 52,061 88,190 16,745 42,653
--------- --------- --------- --------- --------- --------- --------------
Gross profit....................... 5,737 7,440 8,679 11,367 19,297 3,481 12,511
Selling, general and administrative
expenses......................... 5,221 6,219 7,125 8,891 15,441 2,717 10,263
Non-cash compensation expense...... -- -- -- 280 -- -- --
--------- --------- --------- --------- --------- --------- --------------
Operating income................... 516 1,221 1,554 2,196 3,856 764 2,248
Interest expense................... (141) (204) (274) (312) (180) (1) (426)
Other income (expense)............. 12 11 22 (11) 43 12 124
--------- --------- --------- --------- --------- --------- --------------
Income before income taxes......... 387 1,028 1,302 1,873 3,719 775 1,946
Provision for income taxes......... 165 418 509 756 1,507 314 860
--------- --------- --------- --------- --------- --------- --------------
Net income......................... $ 222 $ 610 $ 793 $ 1,117 $ 2,212 $ 461 $ 1,086
--------- --------- --------- --------- --------- --------- --------------
--------- --------- --------- --------- --------- --------- --------------
Earnings per share of common stock
(basic and diluted)(3)(4)........ $ 0.06 $ 0.18 $ 0.22 $ 0.29 $ 0.39 $ 0.09 $ 0.14
--------- --------- --------- --------- --------- --------- --------------
--------- --------- --------- --------- --------- --------- --------------
Weighted average number of common
shares outstanding-basic(3)(4)... 3,534,000 3,480,000 3,582,000 3,798,599 5,671,833 5,307,000 7,779,377
--------- --------- --------- --------- --------- --------- --------------
--------- --------- --------- --------- --------- --------- --------------
Weighted average number of common
shares
outstanding-diluted(3)(4)........ 3,534,000 3,480,000 3,582,000 3,814,139 5,722,440 5,341,850 7,941,116
--------- --------- --------- --------- --------- --------- --------------
--------- --------- --------- --------- --------- --------- --------------

As of
As of December 31, March 31, 1998
----------------------------------------------------- -------------------------
1993 1994 1995 1996(5) 1997(6) Actual(6) As Adjusted(7)
--------- --------- --------- --------- --------- --------- --------------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>

BALANCE SHEET DATA:
Working capital.................... $ 621 $ 944 $ 1,510 $ 10,211 $ 8,188 $ 30,901 $ 32,164
Total assets....................... 6,033 8,782 9,544 17,775 49,921 92,679 93,942
Long-term debt..................... 72 6 -- 65 113 33,758 303
Total debt......................... 2,831 3,005 3,537 100 8,208 34,061 606
Stockholders' equity............... 1,174 1,839 2,362 12,073 25,031 40,311 75,029
</TABLE>

(FOOTNOTES APPEAR ON FOLLOWING PAGE)

6
<PAGE>
(CONTINUED FROM PRIOR PAGE)

(1) Includes the results of operations of Diversified Data Products, Inc.
("DDP") subsequent to its acquisition on May 30, 1996. See Note 3 to the
Consolidated Financial Statements.

(2) The data for the year ended December 31, 1997 includes the results of
operations of DDP, Imperial Data Supply Corporation ("IDS") subsequent to
its acquisition on April 30, 1997, Data Associates, Inc. ("DA") subsequent
to its acquisition on July 1, 1997, Force 4 D.P. Supplies, Inc. ("Force 4")
subsequent to its acquisition on July 15, 1997, NTI Data Products, Inc.
("NTI") subsequent to its acquisition on October 7, 1997, and Britco, Inc.
("Britco") subsequent to its acquisition on December 5, 1997. TBS Printware
Corporation ("TBS") is not included in the statement of operations data, but
is included in the balance sheet data due to its acquisition occurring on
December 31, 1997. The data for the three months ended March 31, 1998
includes the results of operations of DDP, IDS, DA, Force 4, NTI, Britco and
TBS and of Minnesota Western/Creative Office Products, Inc. ("MW")
subsequent to its acquisition effective January 1, 1998 and the results of
operations of Computer Showcase, Inc. ("CS") subsequent to its acquisition
effective March 1, 1998. See Note 3 to the Consolidated Financial
Statements.

(3) Earnings per share of common stock data has been restated for all periods in
accordance with Statement of Financial Accounting Standard ("SFAS") No. 128,
Earnings Per Share. See Note 2 to the Consolidated Financial Statements.

(4) Adjusted to give effect to the Stock Split payable April 24, 1998 to
stockholders of record on April 10, 1998. See Note 2 to the Consolidated
Financial Statements.

(5) The data for December 31, 1996 includes DDP. See Note 3 to the Consolidated
Financial Statements.

(6) The data for December 31, 1997 includes DDP, IDS, DA, Force 4, NTI, Britco
and TBS. The data for March 31, 1998 includes DDP, IDS, DA, Force 4, NTI,
Britco, TBS, MW and CS. See Note 3 to the Consolidated Financial Statements.

(7) Gives pro forma effect to the sale by the Company of 2,100,000 shares of
Common Stock pursuant to the Offering and the application of the net
proceeds therefrom as described under "Use of Proceeds" as if such
transaction had occurred on such date.

7
<PAGE>
RISK FACTORS

IN ADDITION TO OTHER INFORMATION IN THIS PROSPECTUS, THE FOLLOWING FACTORS
SHOULD BE CONSIDERED CAREFULLY BY PROSPECTIVE INVESTORS BEFORE PURCHASING ANY OF
THE COMMON STOCK OFFERED BY THIS PROSPECTUS. THE CAUTIONARY STATEMENTS SET FORTH
BELOW AND ELSEWHERE IN THIS PROSPECTUS SHOULD BE READ AS ACCOMPANYING
FORWARD-LOOKING STATEMENTS INCLUDED HEREIN. THE RISKS DESCRIBED IN THE
STATEMENTS SET FORTH BELOW COULD CAUSE THE COMPANY'S RESULTS TO DIFFER
MATERIALLY FROM THOSE EXPRESSED IN OR INDICATED BY SUCH FORWARD-LOOKING
STATEMENTS.

FINANCING FOR ACQUISITIONS; ADDITIONAL DILUTION

The Company intends to aggressively pursue the acquisition of computer and
office automation supply and projection presentation products companies. If
acquisitions are funded by the issuance of additional Common Stock, such
issuance may be without stockholder approval and will dilute current
stockholders and stockholders who purchase shares of Common Stock in the
Offering. Stockholders have no preemptive rights and, therefore, no stockholder
has the right to acquire additional Common Stock in such a circumstance in order
to prevent such dilution. Moreover, the issuance of additional shares of Common
Stock may have a negative impact on earnings per share and may negatively impact
the market price of the Common Stock.

FINANCING FOR ACQUISITIONS; LEVERAGE

If acquisitions are consummated involving a cash component, it is likely
that the Company will borrow the necessary funds. The Company may become highly
leveraged as a result of such borrowing. High leverage could make the Company
more vulnerable to extended economic downturns and reduce the Company's ability
to respond to changing economic and industry conditions. High leverage could
have important adverse consequences to purchasers of the Common Stock, including
the impairment of the Company's ability to obtain additional financing needed
for working capital, capital expenditures, acquisitions or general corporate
purposes.

NEED FOR ADDITIONAL FINANCING TO IMPLEMENT ACQUISITION STRATEGY

All or substantially all of the net proceeds of the Offering will be used to
repay indebtedness of the Company under its $50.0 million credit facility (the
"Credit Facility"). See "Use of Proceeds." Therefore, the Company will require
additional funds to implement its acquisition strategy. Borrowings under the
Company's Credit Facility may be utilized to finance acquisitions, however, such
borrowings are subject to the satisfaction of terms and conditions contained in
the Credit Facility, including financial covenants and certain restrictions on
"permitted acquisitions." Under the Credit Facility, at least 40.0% of the
consideration for an acquisition must be Common Stock and certain pro forma
indebtedness to earnings ratios must be satisfied in order for an acquisition to
be a "permitted acquisition." In addition, the covenants in the Credit Facility
limit the Company's ability to obtain debt financing other than pursuant to the
Credit Facility. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations-- Credit Facility." Accordingly, there can
be no assurance that the Company will have borrowing capacity or the ability to
raise equity capital sufficient to implement its acquisition strategy.

RESTRICTIONS IMPOSED BY CREDIT FACILITY

The Company's outstanding indebtedness consists primarily of borrowings
under the Credit Facility. The Credit Facility contains covenants that may
restrict the Company's operations in the future. The Credit Facility provides,
among other things, that the Company will not: (i) change the nature of its
business; (ii) acquire the property or assets of any person, other than
permitted acquisitions that comply with the financial covenants of the Credit
Facility; (iii) incur other indebtedness, except for certain capital leases up
to $3.0 million, certain guaranties and certain existing indebtedness; (iv) pay
cash dividends or

8
<PAGE>
repurchase its capital stock; or (v) violate certain financial covenants. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Credit Facility."

FAILURE TO IMPLEMENT ACQUISITION STRATEGY

The Company expects competition for acquisitions in major metropolitan
markets to increase. No assurance can be given that the Company will be able to
identify attractive acquisition candidates, that acquisitions can be completed
at reasonable prices or that acquisitions can be completed in a timely manner or
at all. A failure to identify and complete acquisitions could have a material
adverse effect on the Company's future growth and the market price of its Common
Stock. See "Business--Acquisitions."

INTEGRATION OF ACQUISITIONS

The Company has acquired nine computer and office automation supply
companies and two projection presentation products businesses in the past seven
years, eight of which occurred between April 1997 and March 1998. The Company
intends to continue to actively pursue additional acquisitions. No assurance can
be given that the Company will be able to successfully integrate acquisitions
with the Company's existing systems and operations without substantial costs,
delays or other problems. The integration of acquired businesses may also lead
to the resignation of key employees of the acquired companies and diversion of
management attention from other ongoing business concerns of the Company. Any or
all of these factors could have a material adverse effect on the Company's
operating results and financial condition. See "Business--Acquisitions."

RISKS RELATING TO INTERNATIONAL ACQUISITIONS

Expansion into international markets may involve additional risks relating
to such things as currency exchange rates, new and different legal and
regulatory requirements, political and economic risks relating to the stability
of foreign governments and their trading relationship with the United States,
difficulties in staffing and managing foreign operations, differences in
financial reporting, differences in the manner in which different cultures do
business, operating difficulties and other factors. Although the Company's
operations are not currently subject to material risks associated with
international operations, the Company intends to expand the size and scope of
its international operations, and such risks may be present in the future by
virtue of such expansion.

ABILITY TO MANAGE GROWTH

The Company expects to experience continued rapid growth resulting in new
and increased responsibilities for management personnel and increased demands on
the Company's operating and financial systems and resources. To effectively
manage future growth, the Company will be required to continue to expand its
operational, financial and management information systems and to train, motivate
and manage its work force. There can be no assurance that the Company's
operational, financial and management information systems will be adequate to
support the Company's future operations. Failure to expand the Company's
operational, financial and management information systems or to train, motivate
or manage employees could have a material adverse effect on the Company's
operating results and financial condition. See "Business."

DEPENDENCE ON CERTAIN KEY SUPPLIERS

Although the Company regularly carries products and accessories manufactured
by approximately 500 original equipment manufacturers, 51.9% and 64.0%,
respectively, of the Company's net sales for the year ended December 31, 1997
and for the three months ended March 31, 1998, were derived from products
supplied by the Company's ten largest suppliers, with the sale of products
supplied by Hewlett-Packard, Canon and Lexmark accounting for approximately
14.6%, 12.4% and 7.8% of total net sales, respectively,

9
<PAGE>
for the year ended December 31, 1997. In addition, the Company's business is
dependent upon terms provided by its key suppliers, including pricing and
related provisions, product availability and dealer authorizations. While the
Company considers its relationships with its key suppliers, including Hewlett-
Packard, Canon and Lexmark, to be good, there can be no assurance that such
relationships will continue. In addition, a material change by a key supplier
relating to distributors, volume discount schedules or marketing programs
applicable to the Company, could have a material adverse effect on the Company's
operating results and financial condition. See "Business--Products."

DEPENDENCE ON KEY PERSONNEL

The Company relies on certain key executives, including its President and
other senior management, and has entered into employment agreements that contain
non-competition provisions with such key executives. There can be no assurance
that the Company will be able to retain its executive officers and key personnel
or attract additional qualified management in the future. In addition, the
success of certain of the Company's acquisitions may depend, in part, on the
Company's ability to retain management personnel of the acquired companies. The
loss of services of one or more of the Company's key executives could disrupt
and have a material adverse effect on the Company's operating results and
financial condition.

DEPENDENCE ON COMPUTER SYSTEMS

The Company's operations depend, to a large extent, on the Company's
management information systems ("MIS"). Modifications to the Company's computer
systems and application software will be necessary as the Company grows and
responds to customer needs, technological developments, electronic commerce
requirements and other factors. The Company intends to upgrade its internal
accounting and inventory control and distribution software programs during
fiscal year 1998. The upgrade is expected to cost approximately $2.5 million.
Such modifications may cause disruptions in the operations of the Company, delay
the schedule for integrating newly acquired companies, or cost more to design,
implement or operate than currently budgeted. Any such disruptions, delays or
costs could have a material adverse effect on the Company's operating results
and financial condition.

The Company does not currently have redundant computer systems or redundant
dedicated communication lines linking its computers to its warehouses. The
Company has safeguards against certain events that could interrupt its
operations, including back-up power supplies that allow the Company's computer
system to function in the event of a power outage, redundant storage of data,
off-site storage of back-up data, physical security systems and an early warning
detection and fire extinguishing system. The failure of the Company's computer
or communication systems could have a material adverse effect on the Company's
operating results and financial condition.

The Company is utilizing internal resources and outside consultants to
upgrade its software for year 2000 ("Year 2000") compliance. The Company's
computer hardware and operating system are already Year 2000 compliant. New
software to be acquired in response to the Company's expansion and acquisition
program will be Year 2000 compliant. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations--Year 2000" and
"Business--Management Information Systems."

HIGHLY COMPETITIVE INDUSTRY

The computer and office automation supply industry is highly competitive.
The Company competes with major full-service office products distributors, other
national and regional computer supply distributors, office products superstores,
direct mail order companies, and, to a lesser extent, non-specialized retailers.
Certain of the Company's competitors, such as office products superstores and
major full-service office products distributors, are larger and have
substantially greater financial and other resources and purchasing power than
the Company. The Company believes that the computer supply industry will become
more consolidated in the future and consequently more competitive. Increased
competition may

10
<PAGE>
result in greater price discounting which will continue to have a negative
impact on the industry's gross margins. See "Business--Competition."

POTENTIAL VOLATILITY OF STOCK PRICE

Stock prices of growth companies such as the Company may fluctuate widely,
often for reasons that are unrelated to the actual operating performance of the
particular company. In addition, the market price of the Company's Common Stock
is subject to significant fluctuation due to variations in stock market
conditions, changes in financial estimates by securities analysts or failures by
the Company to meet such estimates, variations in quarterly operating results,
general conditions affecting all participants in the computer supply industry,
announcements by the Company or its competition, regulatory developments, and
economic or other external factors.

NO DIVIDENDS

The Company has not paid a cash dividend on its Common Stock since its
initial public offering and currently expects to retain its future earnings, if
any, for use in the operation and expansion of its business. The Company does
not anticipate paying any cash dividends in the foreseeable future. In addition,
the Credit Facility prohibits the payment of cash dividends.

AVAILABILITY OF COMMON STOCK AND PREFERRED STOCK FOR ISSUANCE

The Company's Board of Directors has the authority to issue up to 5,000,000
shares of the Company's preferred stock, no par value per share (the "Preferred
Stock"), and to determine the price, rights, preferences, privileges and
restrictions thereof, including voting rights of the Preferred Stock, without
any further vote or action by the Company's stockholders. The voting and other
rights of the holders of Common Stock will be subject to, and may be adversely
affected by, the rights of the holders of any Preferred Stock that may be issued
in the future. The Company's Board may similarly issue additional shares of
Common Stock without any further vote or action by stockholders, under certain
circumstances. Such an issuance could occur in the context of another public or
private offering of shares of Common Stock or Preferred Stock or in a situation
where the Common Stock or Preferred Stock is used to acquire the assets or stock
of another company. The issuance of Common Stock or Preferred Stock, while
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes could have the effect of delaying, deferring or
preventing a change in control of the Company.

CONTROL OF EXISTING MANAGEMENT AND CERTAIN STOCKHOLDERS

Directors and executive officers of the Company and officers of the
subsidiaries of the Company currently beneficially own 4,571,212 shares of
Common Stock (including vested stock options but not including shares owned
beneficially by LLC) representing approximately 55.5% of the outstanding shares
of Common Stock (representing approximately 44.2% subsequent to the Offering, or
42.9%, if the Underwriters' over-allotment option is exercised in full).
Consequently, management is in a position to exert significant influence over
material matters relating to the Company's business, including decisions
regarding the election of the Company's Board of Directors, the acquisition or
disposition of assets (in the ordinary course of the Company's business or
otherwise), future issuances of Common Stock or other securities of the Company,
and the declaration and payment of dividends on the Common Stock. Management
also may be able to delay, make more difficult or prevent any business
combination involving the Company. See "Principal Stockholders."

ANTITAKEOVER PROVISIONS

The Amended and Restated Articles of Incorporation ("Articles") and Amended
and Restated Code of Regulations ("Code of Regulations") of the Company contain
certain provisions which, among other things, permit the establishment of a
"staggered" Board of Directors, limit the personal liability of, and provide
indemnification for, the directors of the Company, require that stockholders
comply with certain

11
<PAGE>
requirements in order to nominate a director or submit a proposal before a
meeting of stockholders, limit the ability of stockholders to act by written
consent and require a supermajority vote of stockholders in the event that a
"related person" (as defined) attempts to engage in a business combination with
the Company. The Ohio General Corporation Law (the "OGCL"), which is applicable
to the Company, has certain other provisions which may be deemed to have
antitakeover effects, including statutes which deal with control share
acquisitions, control bids and the disgorgement of trading profits. See
"Restrictions on Acquisition of the Company."

SHARES ELIGIBLE FOR FUTURE SALE

Future sales of Common Stock by existing stockholders could adversely affect
the prevailing market price of the Common Stock. Upon completion of the
Offering, the Company will have 10,223,964 shares of Common Stock outstanding
(10,538,964 shares if the Underwriters' over-allotment option is exercised in
full). All of the 2,100,000 shares offered hereby will be freely tradeable by
persons other than "affiliates" of the Company, as that term is defined in the
Securities Act of 1933 as amended (the "Securities Act"). Upon the expiration of
a lock-up agreement between the Underwriters, certain affiliates of the Company,
the Company's officers and directors and an affiliate of FBR, beginning 180 days
after the date of the Offering, or earlier if the Underwriters consent,
approximately 2,185,356 additional shares will be eligible for immediate sale in
the public market, subject to compliance with Rule 144 promulgated under the
Securities Act. In connection with the acquisitions of computer supply and
projection presentation products companies in fiscal year 1997 and through March
31, 1998, the Company issued 2,818,483 shares of Common Stock which were subject
to restrictions on resale. Of such amount, 586,662 shares are no longer subject
to restrictions, 2,051,553 shares will cease to be subject to such restrictions
after October 1, 1998 and the remaining 180,268 shares will not be subject to
such restrictions after November 28, 1998. The Company has agreed to register
1,777,820 of such shares and 278,119 shares owned by the FBR Fund and upon the
effective date of that registration statement, subsequent to the restrictive
periods, those shares will also be freely tradeable. The remaining shares issued
in such acquisitions will be eligible for resale pursuant to the provisions of
Rule 144. In addition, the Company presently intends to register an additional
2,000,000 shares of its Common Stock with the Commission in a "shelf"
registration under Rule 415 of the Securities Act, as soon as possible, for use
by the Company as all or a portion of the consideration to be paid in future
acquisitions. It is anticipated that these shares will be subject to contractual
restrictions on resale for approximately twelve months after their issuance in
connection with such acquisitions; thereafter such shares will generally be
freely tradeable. If a large number of shares are sold by stockholders in the
market after various restrictions on transfer cease, the price of the Common
Stock could be adversely affected. See "Shares Eligible for Future Sale."

USE OF PROCEEDS

The net proceeds to be received by the Company from the sale of the Common
Stock offered hereby, after deducting the underwriting discount and estimated
offering expenses, are estimated to be approximately $34.7 million (or
approximately $40.0 million, assuming the Underwriters exercise their over-
allotment option in full). The Company intends to use the net proceeds to repay
all indebtedness outstanding under the Company's Credit Facility. The
indebtedness outstanding under the Credit Facility was approximately $33.5
million at March 31, 1998. The indebtedness outstanding under the Credit
Facility matures on December 29, 2000 and bears interest at various rates from
7.56% to 8.50% per annum. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Credit Facility." The amounts borrowed
under the Credit Facility were used by the Company to fund the Company's
acquisitions in fiscal years 1997 and 1998 and for working capital. Any net
proceeds not applied to repay indebtedness will be used for general corporate
purposes, including working capital. Pending application to repayment of such
indebtedness, the net proceeds will be invested in short-term, interest-bearing
investment grade securities.

12
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The Company's Common Stock is listed and trades on the Nasdaq National
Market tier of the Nasdaq Stock Market under the symbol "MCSC." The following
table sets forth for the periods indicated the high and low closing sale price
for the Common Stock as reported by the Nasdaq National Market. All closing
prices have been adjusted for the Stock Split.

<TABLE>
<CAPTION>
1996 1997 1998
----------------- ----------------- -----------------
QUARTER HIGH LOW HIGH LOW HIGH LOW
- ------------------------------------------------------ ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
First................................................. $ -- $ -- $ 9 1/8 $ 6 1/8 $17 2/3 $ 8 2/3
Second................................................ -- -- 8 1/3 6
Third................................................. -- -- 10 7 7/8
Fourth................................................ 6 7/8 5 7/8 10 8 1/2
Year.................................................. 6 7/8 5 7/8 10 6
</TABLE>

On June 2, 1998, the last reported sale price of the Common Stock on the
Nasdaq National Market was $17.75. As of June 2, 1998, there were approximately
932 stockholders, of which 122 were holders of record of the Company's Common
Stock.

The declaration of cash dividends is at the discretion of the Board of
Directors of the Company, and is currently prohibited by the Company's Credit
Facility. No cash dividends on the Common Stock have been declared or paid by
the Company since the date of the Company's initial public offering. The Company
does not anticipate paying cash dividends in the foreseeable future.

13
<PAGE>
CAPITALIZATION

The following table sets forth the capitalization of the Company at March
31, 1998, on an actual basis and as adjusted to give effect to the sale of
2,100,000 shares of Common Stock by the Company in the Offering and after
deducting the Underwriters' discount and estimated offering expenses. See "Use
of Proceeds." The following data should be read in conjunction with the
Consolidated Financial Statements of the Company and the notes thereto included
elsewhere in this Prospectus. See also "Selected Consolidated Financial Data"
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations."

<TABLE>
<CAPTION>
MARCH 31, 1998
----------------------------
ACTUAL AS ADJUSTED
------------- -------------
<S> <C> <C>
Short-term debt:
Current portion of long-term debt................................................ $ 302,823 $ 302,823(1)
------------- -------------
Long-term debt..................................................................... 33,757,942 302,942(1)
------------- -------------
Stockholders' equity:
Preferred stock, no par value, 5,000,000 shares authorized; none outstanding
actual; 5,000,000 shares authorized; none outstanding as adjusted.............. -- --
Common stock, no par value, 30,000,000 shares authorized; 8,123,964 shares issued
and outstanding actual; 30,000,000 shares authorized; 10,223,964 shares issued
and outstanding as adjusted(2)................................................. -- --
Additional paid-in capital......................................................... 33,289,370 68,007,432
Retained earnings.................................................................. 7,036,332 7,036,332
Less: Treasury stock............................................................... (15,000) (15,000)
------------- -------------
Total stockholders' equity....................................................... 40,310,702 75,028,764
------------- -------------
Total capitalization........................................................... $ 74,371,467 $ 75,634,529
------------- -------------
------------- -------------
</TABLE>

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

(1) Represents capital lease obligations.

(2) Excludes 1,275,000 shares of Common Stock reserved for future issuance under
the Company's stock option plans. See "Management--Employee Benefit Plans."

14
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA

The selected consolidated financial data set forth below for the years ended
December 31, 1993, 1994, 1995, 1996 and 1997 have been derived from consolidated
financial statements of the Company which have been audited by Price Waterhouse
LLP, independent accountants, whose report as of December 31, 1996 and 1997 and
for each of the three years in the period ended December 31, 1997 is included
elsewhere in this Prospectus. The selected consolidated financial data set forth
below for the three months ended March 31, 1997 and 1998 have been derived from
unaudited consolidated financial statements of the Company which, in the opinion
of management, contain all adjustments, consisting only of normal recurring
adjustments, necessary for a fair presentation of those financial statements.
The selected consolidated financial data set forth below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Consolidated Financial Statements of the
Company, and accompanying notes thereto, included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
YEAR ENDED DECEMBER 31, 31,
----------------------------------------------------- -------------------------
1993 1994 1995 1996(1) 1997(2) 1997 1998(2)
--------- --------- --------- --------- --------- --------- --------------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net sales.............................. $ 29,045 $ 35,690 $ 43,321 $ 63,428 $ 107,487 $ 20,226 $ 55,164

Cost of sales.......................... 23,308 28,250 34,642 52,061 88,190 16,745 42,653
--------- --------- --------- --------- --------- --------- --------------

Gross profit........................... 5,737 7,440 8,679 11,367 19,297 3,481 12,511

Selling, general and administrative
expenses............................. 5,221 6,219 7,125 8,891 15,441 2,717 10,263

Non-cash compensation expense.......... -- -- -- 280 -- -- --
--------- --------- --------- --------- --------- --------- --------------

Operating income....................... 516 1,221 1,554 2,196 3,856 764 2,248

Interest expense....................... (141) (204) (274) (312) (180) (1) (426)

Other income (expense)................. 12 11 22 (11) 43 12 124
--------- --------- --------- --------- --------- --------- --------------

Income before income
taxes................................ 387 1,028 1,302 1,873 3,719 775 1,946

Provision for income taxes............. 165 418 509 756 1,507 314 860
--------- --------- --------- --------- --------- --------- --------------

Net income............................. $ 222 $ 610 $ 793 $ 1,117 $ 2,212 $ 461 $ 1,086
--------- --------- --------- --------- --------- --------- --------------
--------- --------- --------- --------- --------- --------- --------------

Earnings per share of common stock
(basic and diluted)(3)(4)............ $ 0.06 $ 0.18 $ 0.22 $ 0.29 $ 0.39 $ 0.09 $ 0.14
--------- --------- --------- --------- --------- --------- --------------
--------- --------- --------- --------- --------- --------- --------------

Weighted average number of common
shares outstanding--basic(3)(4)...... 3,534,000 3,480,000 3,582,000 3,798,599 5,671,833 5,307,000 7,779,377
--------- --------- --------- --------- --------- --------- --------------
--------- --------- --------- --------- --------- --------- --------------

Weighted average number of common
shares outstanding--diluted(3)(4).... 3,534,000 3,480,000 3,582,000 3,814,139 5,722,440 5,341,850 7,941,116
--------- --------- --------- --------- --------- --------- --------------
--------- --------- --------- --------- --------- --------- --------------

AS OF
AS OF DECEMBER 31, MARCH 31, 1998
----------------------------------------------------- -------------------------
1993 1994 1995 1996(5) 1997(6) ACTUAL(6) AS ADJUSTED(7)
--------- --------- --------- --------- --------- --------- --------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Working capital........................ $ 621 $ 944 $ 1,510 $ 10,211 $ 8,188 $ 30,901 $ 32,164
Total assets........................... 6,033 8,782 9,544 17,775 49,921 92,679 93,942
Long-term debt......................... 72 6 -- 65 113 33,758 303
Total debt............................. 2,831 3,005 3,537 100 8,208 34,061 606
Stockholders' equity................... 1,174 1,839 2,632 12,073 25,031 40,311 75,029
</TABLE>

(FOOTNOTES APPEAR ON FOLLOWING PAGE)

15
<PAGE>

(CONTINUED FROM PRIOR PAGE)

(1) Includes the results of operations of DDP subsequent to its acquisition on
May 30, 1996. See Note 3 to the Consolidated Financial Statements.

(2) The data for the year ended December 31, 1997 includes the results of
operations of DDP, IDS subsequent to its acquisition on April 30, 1997, DA
subsequent to its acquisition on July 1, 1997, Force 4 subsequent to its
acquisition on July 15, 1997, NTI subsequent to its acquisition on October
7, 1997, and Britco subsequent to its acquisition on December 5, 1997. TBS
is not included in the statement of operations data, but is included in the
balance sheet data due to its acquisition occurring on December 31, 1997.
The data for the three months ended March 31, 1998 includes the results of
operations of DDP, IDS, DA, Force 4, NTI, Britco and TBS and of MW
subsequent to its acquisition effective January 1, 1998 and the results of
operations of CS subsequent to its acquisition effective March 1, 1998. See
Note 3 to the Consolidated Financial Statements.

(3) Earnings per share of common stock data has been restated for all periods in
accordance with SFAS No. 128, Earnings Per Share. See Note 2 to the
Consolidated Financial Statements.

(4) Adjusted to give effect to the Stock Split payable April 24, 1998 to
stockholders of record on April 10, 1998. See Note 2 to the Consolidated
Financial Statements.

(5) The data for December 31, 1996 includes DDP. See Note 3 to the Consolidated
Financial Statements.

16
<PAGE>
UNAUDITED PRO FORMA FINANCIAL DATA

The Company is involved in an active acquisition program. During the year
ended December 31, 1997, the Company completed acquisitions of IDS, DA, Force 4,
NTI, Britco and TBS and, during the three months ended March 31, 1998, completed
acquisitions of MW and CS. Each of these transactions were accounted for as
purchase business combinations.

The following unaudited pro forma statement of operations for the year ended
December 31, 1997 gives effect to the foregoing business combinations (except
for CS, which was not material) as if they had occurred on January 1, 1997. The
unaudited pro forma statement of operations is based upon the historical
financial statements of the Company and the foregoing acquired entities (except
CS) and the assumptions and adjustments described in the accompanying notes. The
unaudited pro forma statement of operations for the year ended December 31, 1997
has been further adjusted to reflect the effect of the use of proceeds of the
Common Stock to be sold in the Offering to repay debt, the majority of which was
incurred to finance the foregoing acquisitions. The pro forma data reflects
adjustments directly related to the acquisitions, and does not include
adjustments that may arise as a consequence of the acquisitions, such as cost
savings, improved efficiencies, etc. Therefore, the pro forma data is not
necessarily indicative of operating results that would have occurred for the
year ended December 31, 1997, or in future periods, had the acquisitions
actually occurred on January 1, 1997.

The Company's consolidated balance sheet at March 31, 1998 reflects the
acquisitions closed during fiscal years 1997 and 1998. Further, an unaudited pro
forma statement of operations for the three months ended March 31, 1998 is not
presented because MW was acquired effective January 1, 1998 and the acquisition
of CS was not material.

17
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997

<TABLE>
<CAPTION>
AS ADJUSTED
THE ACQUIRED ACQUISITION PRO FORMA OFFERING FOR THE
COMPANY ENTITIES(1) ADJUSTMENTS COMBINED ADJUSTMENTS(6) OFFERING
---------- ----------- ------------- ---------- -------------- -----------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C>
Net sales..................... $ 107,487 $ 102,262 $ -- $ 209,749 $ -- $ 209,749
---------- ----------- ------------- ---------- -------------- -----------
Cost of sales................. 88,190 78,868 -- 167,058 -- 167,058
Selling, general and
administrative expenses..... 15,441 21,215 801(2) 37,457 -- 37,457
---------- ----------- ------------- ---------- -------------- -----------
Total operating expenses...... 103,631 100,083 801 204,515 -- 204,515
---------- ----------- ------------- ---------- -------------- -----------
Operating income.............. 3,856 2,179 (801) 5,234 -- 5,234
Interest expense.............. (180) (519) (1,342)(3) (2,041) 2,041 --
Other income.................. 43 407 -- 450 -- 450
---------- ----------- ------------- ---------- -------------- -----------
Income before income taxes.... 3,719 2,067 (2,143) 3,643 2,041 5,684
Provision for income taxes.... 1,507 510 (218)(4) 1,799 827 2,626
---------- ----------- ------------- ---------- -------------- -----------
Net income.................... $ 2,212 $ 1,557 $ (1,925) $ 1,844 $ 1,214 $ 3,058
---------- ----------- ------------- ---------- -------------- -----------
---------- ----------- ------------- ---------- -------------- -----------
Earnings per share of common
stock (basic and diluted)... $ 0.39 $ 0.23 $ 0.31
---------- ---------- -----------
---------- ---------- -----------
Average common shares
outstanding-basic........... 5,671,833 2,271,885(5) 7,943,718 2,024,899(7) 9,968,617
---------- ------------- ---------- -------------- -----------
---------- ------------- ---------- -------------- -----------
Average common shares
outstanding-diluted......... 5,722,440 2,271,885(5) 7,994,325 2,024,899(7) 10,019,224
---------- ------------- ---------- -------------- -----------
---------- ------------- ---------- -------------- -----------
</TABLE>

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

(1) Includes the results of operations of the acquired entities from January 1,
1997 to the date of their respective acquisition by the Company. Because TBS
and MW were acquired effective December 31, 1997 and January 1, 1998,
respectively, amounts related to these two entities are for the year ended
December 31, 1997.

(2) Reflects the additional amortization of goodwill arising from the
acquisitions over an estimated useful life of 40 years.

(3) Reflects additional interest expense arising from the acquisitions based on
the Company's use of its Credit Facility to fund the cash portion of the
purchase price of the respective acquisitions at 8.0% per annum.

(4) Adjusts estimated income taxes to reflect the Company's income tax rate of
40.5% on the income of the acquired entities, along with the tax benefit of
increased interest expense, at an estimated effective rate of 40.5%. There
is no tax benefit for goodwill amortization based upon the tax structure of
the acquisitions.

(5) Reflects the impact of the additional shares issued pursuant to the
acquisitions and the resultant impact on average common shares outstanding.

(6) Reflects the use of proceeds of the Common Stock covered by the Offering to
reduce debt and related interest expense, net of the applicable income
taxes.

(7) Adjusts average common shares outstanding for the number of shares, net of
related offering expenses, covered by the Offering required to retire the
Company's indebtedness on a pro forma basis. Although pro forma data for the
three month period ended March 31, 1998 is not presented, the effect on
earnings per share of common stock arising from the planned use of proceeds
is not material to the three month period then ended.

18
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH "SELECTED
CONSOLIDATED FINANCIAL DATA" AND THE CONSOLIDATED FINANCIAL STATEMENTS AND NOTES
THERETO OF THE COMPANY INCLUDED ELSEWHERE HEREIN. THE FOLLOWING INFORMATION
CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE CERTAIN RISKS AND
UNCERTAINTIES. ACTUAL RESULTS AND EVENTS MAY DIFFER SIGNIFICANTLY FROM THOSE
DISCUSSED IN THE FORWARD-LOOKING STATEMENTS.

GENERAL

The Company is a leading distributor of computer and office automation
supplies and accessories, projection presentation products and video
conferencing equipment throughout the United States and in certain foreign
countries. The Company distributes over 1,800 core products primarily to middle
market and smaller businesses and, to a lesser extent, to governmental,
educational and institutional customers.

The Company's net sales increased from $29.0 million in fiscal year 1993 to
$107.5 million in fiscal year 1997, a compound annual growth rate of 38.8%. Over
the same period, earnings per share increased from $0.06 to $0.39, a compound
annual growth rate of 59.7%. Net sales and earnings per share were $55.2 million
and $0.14, respectively, for the quarter ended March 31, 1998. The Company's
growth in sales is due primarily to the acquisition of nine regional computer
and office automation supply companies and two projection presentation products
companies over the past seven years, eight of which were acquired between April
1997 and March 1998. These eight acquisitions accounted for $19.7 million of the
Company's $107.5 million in net sales for the year ended December 31, 1997 and
for $33.2 million of the Company's $55.2 million in net sales for the three
months ended March 31, 1998.

The Company, in the normal course of its business, continues to identify,
evaluate and hold preliminary discussions with potential acquisition candidates.
Except as set forth below and for confidentiality agreements and/or non-binding
letters of intent by and between the Company and one or more computer supply or
projection presentation products distributors relating to the acquisition of the
assets and liabilities, or the stock, of such other distributors which may be
entered into from time to time, there are, as of the date of this Prospectus, no
definitive agreements between the Company and any other party relating thereto.
There can be no assurance that any future acquisition can or will be negotiated
or consummated on terms favorable to the Company, or at all. On June 3, 1998,
the Company entered into a definitive agreement to acquire Electronic Image
Systems, Inc., Bellevue, Washington, a distributor and integrator of
audio-visual presentation products and services which had total sales of $10.3
million and total assets of $3.1 million (unaudited) for and as of the year
ended December 31, 1997. This agreement is expected to be closed in the second
quarter of fiscal year 1998.

19
<PAGE>
RESULTS OF OPERATIONS

The following table presents certain information concerning the Company's
results of operations for the years ended December 31, 1995, 1996 and 1997 and
for the three months ended March 31, 1997 and 1998.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, THREE MONTHS ENDED MARCH 31,
------------------------------------------------------- -----------------------------------
1995 1996 1997 1997 1998
---------------- ---------------- ----------------- ---------------- ----------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
------- ------- ------- ------- -------- ------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales........................... $43,321 100.0% $63,428 100.0% $107,487 100.0% $20,226 100.0% $55,164 100.0%
Cost of sales....................... 34,642 80.0 52,061 82.1 88,190 82.0 16,745 82.8 42,653 77.3
------- ------- ------- ------- -------- ------- ------- ------- ------- -------
Gross profit........................ 8,679 20.0 11,367 17.9 19,297 18.0 3,481 17.2 12,511 22.7
Selling, general and administrative
expenses.......................... 7,125 16.4 8,891 14.0 15,441 14.4 2,717 13.4 10,263 18.6
Non-cash compensation expense....... -- -- 280 0.4 -- -- -- -- -- --
------- ------- ------- ------- -------- ------- ------- ------- ------- -------
Operating income.................... 1,554 3.6 2,196 3.5 3,856 3.6 764 3.8 2,248 4.1
Interest expense.................... (274 ) (0.6) (312 ) (0.5) (180) (0.2) (1 ) -- (426 ) (0.8)
Other income (expense).............. 22 -- (11 ) -- 43 -- 12 -- 124 0.2
------- ------- ------- ------- -------- ------- ------- ------- ------- -------
Income before income taxes.......... 1,302 3.0 1,873 3.0 3,719 3.4 775 3.8 1,946 3.5
Provision for income taxes.......... 509 1.2 756 1.2 1,507 1.4 314 1.5 860 1.5
------- ------- ------- ------- -------- ------- ------- ------- ------- -------
Net income.......................... $ 793 1.8% $1,117 1.8% $ 2,212 2.0% $ 461 2.3% $1,086 2.0%
------- ------- ------- ------- -------- ------- ------- ------- ------- -------
------- ------- ------- ------- -------- ------- ------- ------- ------- -------
</TABLE>

THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO MARCH 31, 1997

NET SALES. Net sales for the three months ended March 31, 1998 increased by
$34.9 million, or 172.7%, to $55.2 million from $20.2 million for the three
months ended March 31, 1997. Of the increase, $1.8 million was a result of
increased sales to the Company's current customer base and $33.2 million of the
increase resulted from the entities acquired in fiscal years 1997 and 1998.

GROSS PROFIT. Gross profit for the three months ended March 31, 1998
increased by $9.0 million, or 259.4%, to $12.5 million from $3.5 million for the
three months ended March 31, 1997. Gross profit as a percentage of net sales for
the three months ended March 31, 1998 was 22.7% compared to 17.2% for the three
months ended March 31, 1997. The increase in the gross profit percentage was due
primarily to the result of the higher margins of MW, which was acquired
effective January 1, 1998.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for the three months ended March 31, 1998 increased by
$7.5 million to $10.3 million from $2.7 million for the three months ended March
31, 1997. The majority of the increase resulted from the eight acquisitions the
Company has completed since March 31, 1997. As a percentage of net sales,
selling, general and administrative expenses were 18.6% for the three months
ended March 31, 1998 compared to 13.4% for the three months ended March 31,
1997. This increase as a percentage of sales results primarily from the results
of MW, which has a higher selling, general and administrative expense
percentage, while maintaining a higher gross profit percentage.

OPERATING INCOME. Operating income for the three months ended March 31,
1998 increased by $1.5 million to $2.2 million from $0.8 million for the three
months ended March 31, 1997 for the reasons stated above. Operating margin
increased to 4.1% in 1998 compared to 3.8% in 1997.

20
<PAGE>
INTEREST EXPENSE. Interest expense for the three months ended March 31,
1998 increased by $425,409 to $426,280 from $871 for the three months ended
March 31, 1997, due primarily to the increased level of indebtedness during
1998, in order to fund business combinations and growth in working capital. See
"--Credit Facility."

PROVISION FOR INCOME TAXES. The provision for income taxes for the three
months ended March 31, 1998 increased $546,168 to $860,000 from $313,832 for the
three months ended March 31, 1997. The Company's effective tax rate was 44.2%
for the three months ended March 31, 1998 and 40.5% for the three months ended
March 31, 1997. Increased amortization of goodwill, most of which is not
deductible for tax purposes, was the reason for the higher tax rate during the
1998 quarter.

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

NET SALES. Net sales for the year ended December 31, 1997 increased by
$44.1 million, or 69.5%, to $107.5 million from $63.4 million for the year ended
December 31, 1996. Of this net sales increase, 44.0% was attributable to the
Company's acquisitions in fiscal year 1997, 35.3% was attributable to the
Company's acquisition of DDP in May 1996 and the remaining 20.7% of the increase
was primarily a result of increased sales penetration, product offerings to
existing customers and expanding the sales force.

GROSS PROFIT. Gross profit for the year ended December 31, 1997 increased
by $7.9 million, or 69.8%, to $19.3 million from $11.4 million for the year
ended December 31, 1996. Gross profit as a percentage of net sales for the year
ended December 31, 1997 was 18.0% compared to 17.9% for the year ended December
31, 1996. Margins improved in 1997 as a result of the Company's acquisition
program. Even though DDP has lower margins than the other businesses of the
Company, the improvements in margin were offset by a full year of DDP's
operations.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for the year ended December 31, 1997 increased by $6.5
million, or 73.7%, to $15.4 million from $8.9 million for the year ended
December 31, 1996. Approximately 54.3% of this increase was due to the
acquisitions in fiscal year 1997, 13.0% of this increase was due to the
acquisition of DDP in May 1996 and approximately 32.7% of this increase was due
to increased salary, bonus, commission and rent expenses. As a percentage of net
sales, selling, general and administrative expenses were 14.4% for the year
ended December 31, 1997 compared to 14.0% for the year ended December 31, 1996.
The 0.4% increase was due primarily to increased selling, general and
administrative expenses resulting from the acquired entities.

OPERATING INCOME. Operating income for the year ended December 31, 1997 was
$3.9 million as compared to $2.2 million for the year ended December 31, 1996,
an increase of $1.7 million, or 75.6%. This increase was primarily due to
increased sales volume and the acquisitions that the Company completed in fiscal
year 1997.

INTEREST EXPENSE. Interest expense for the year ended December 31, 1997
decreased $131,954 to $180,373 from $312,327 for the year ended December 31,
1996, due primarily to the decreased level of average indebtedness in fiscal
year 1997, made possible from the Company's sale of stock through the Company's
initial public offering in November 1996. See "--Credit Facility."

PROVISION FOR INCOME TAXES. Provision for income taxes for the year ended
December 31, 1997 increased by $751,327 to $1,507,020 from $755,693 for the year
ended December 31, 1996. The Company's effective tax rate was 40.5% for the year
ended December 31, 1997 compared to 40.3% for the year ended December 31, 1996.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

NET SALES. Net sales for the year ended December 31, 1996 increased by
$20.1 million, or 46.4%, to $63.4 million from $43.3 million for the year ended
December 31, 1995. Of this net sales increase, 64.6%

21
<PAGE>
was attributable to the Company's acquisition of DDP in May 1996, while 5.2% of
the increase was primarily a result of increased sales of projection
presentation products. The remaining increase was primarily a result of
increased sales penetration and product offerings to existing customers. DDP's
sales for the three months ended December 31, 1996 were higher than normal due
to several one time sales transactions totaling $1.7 million.

GROSS PROFIT. Gross profit for the year ended December 31, 1996 increased
by $2.7 million, or 31.0%, to $11.4 million from $8.7 million for the year ended
December 31, 1995. Gross profit as a percentage of net sales for the year ended
December 31, 1996 was 17.9% compared to 20.0% for the year ended December 31,
1995. The decrease in the gross profit percentage was due primarily to the
acquisition of DDP which has lower operating gross margins, primarily due to
DDP's sales to other computer supply dealers and export businesses.

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses for the year ended December 31, 1996 increased by $1.8
million, or 24.8%, to $8.9 million from $7.1 million for the year ended December
31, 1995. Approximately 38.5% of this increase was due to increased salary,
bonus and profit sharing expenses and approximately 20.9% was due to increased
commissions expense resulting from the Company's increased sales volume. As a
percentage of net sales, selling, general and administrative expenses were 14.0%
for the year ended December 31, 1996 compared to 16.4% for the year ended
December 31, 1995. The decrease as a percentage of sales relates to spreading
the fixed portion of these costs over a larger sales base.

NON-CASH COMPENSATION EXPENSE. Non-cash compensation expense for the year
ended December 31, 1996 was $0.3 million. This compensation expense related to
stock awards granted to the three selling stockholders of DDP. See Note 10 to
the Consolidated Financial Statements.

OPERATING INCOME. Operating income for the year ended December 31, 1996 was
$2.2 million as compared to $1.6 million for the year ended December 31, 1995,
an increase of $0.6 million or 41.3%. This increase was primarily due to
increased sales volume, the acquisition of DDP and improved operating
efficiencies.

INTEREST EXPENSE. Interest expense for the year ended December 31, 1996
increased $38,250 to $312,327 from $274,077 for the year ended December 31,
1995. This increase was due primarily to the higher level of indebtedness during
fiscal year 1996. See "--Credit Facility."

PROVISION FOR INCOME TAXES. Provision for income taxes for the year ended
December 31, 1996 increased by $0.2 million to $0.8 million from $0.5 million
for the year ended December 31, 1995. The Company's effective tax rate was 40.3%
for the year ended December 31, 1996 compared to 39.1% for the year ended
December 31, 1995.

LIQUIDITY AND CAPITAL RESOURCES

Net cash flows used in operating activities totaled $4.0 million for the
first three months of fiscal year 1998 compared to $1.4 million used by
operating activities during the first three months of fiscal year 1997. The
change in net cash flows from operating activities in the first three months of
fiscal year 1998, compared to the first three months of fiscal year 1997, was
due primarily to an increase in accounts receivable and inventories and a
reduction of trade accounts payable. Working capital approximated $30.9 million
at March 31, 1998 and $8.2 million at December 31, 1997 because the Company's
new borrowing arrangements do not require repayment of the debt until December
29, 2000.

Net cash used in investing activities was $14.5 million for the three months
ended March 31, 1998 versus $0.1 million for the three months ended March 31,
1997. The net cash used in investing activities primarily reflected the
acquisitions completed during the quarter. Net cash provided by financing
activities

22
<PAGE>
totaled $17.7 million for the three months ended March 31, 1998 compared with
$0.8 million for the three months ended March 31, 1997. This increase was due
primarily to increased borrowing levels.

Net cash flows used in operating activities were $0.3 million and $1.3
million for the years ended December 31, 1997 and 1996, respectively. For the
year ended December 31, 1995, net cash flows used in operating activities were
$0.1 million. Cash flows used in operations in fiscal years 1997 and 1996
related to the Company's expansion and the resultant increases in receivables
and inventories. Working capital amounted to $8.2 million at December 31, 1997
compared to $10.2 million at December 31, 1996; the Company's use of a short
term line of credit for acquisitions was the primary reason for this decline.

Capital expenditures for the three months ended March 31, 1998 of $0.6
million and capital expenditures for the year ended December 31, 1997 of $0.6
million were used primarily to upgrade and enhance computer systems.

For fiscal year 1998, the Company expects capital expenditures of
approximately $2.5 million to be used for upgrading and enhancing the Company's
MIS. Actual capital expenditures for fiscal year 1998 may be greater than
budgeted amounts depending on the level of acquisition activity and other
factors.

The Company believes that its cash on hand and borrowing capacity under the
Credit Facility will be sufficient to fund its ongoing operations and budgeted
capital expenditures for the next twelve months, although actual capital needs
may change, particularly in connection with acquisitions which the Company may
make in the future. The Company's long-term requirements, including capital
expenditures and acquisitions, are expected to be financed by a combination of
internally generated funds, additional borrowings and other sources of external
financing (including possible public or private debt or equity offerings) as
needed.

CREDIT FACILITY

During 1997, the Company's outstanding indebtedness consisted primarily of
borrowings under a $15.0 million secured term and revolving credit facility
provided by National City Bank, Dayton, Ohio (the "Bank").

On January 8, 1998, the Company entered into a new credit facility with the
Bank, Key Corporate Capital, Inc. and PNC Bank, N.A. for a secured general
revolving line of credit of $50.0 million. Loans under the Credit Facility may
be incurred by the Company from time to time to finance "permitted acquisitions"
and may be made at the Bank's prime rate (as defined) or at the defined
published eurodollar rate plus a "eurodollar margin" that ranges from 150 to 225
basis points based on certain indebtedness ratios of the Company. Borrowings
under the Credit Facility are secured by substantially all of the assets and
property of the Company and its subsidiaries, including accounts receivable,
equipment and inventory. The loan commitment terminates on the earlier of the
maturity date (December 29, 2000) or the date on which a "change in control" (as
defined) of the Company occurs. The Company may voluntarily prepay any advance
without penalty or premium at any time or from time to time.

The Credit Facility contains restrictive covenants which may have an adverse
effect on the Company's operations in the future. The Company has covenanted
that, among other things, it will not: (i) change the nature of its business;
(ii) liquidate or dissolve its affairs, merge, consolidate or acquire the
property or assets of any person, other than permitted acquisitions that comply
with the financial covenants of the Credit Facility, certain intercompany
mergers, permitted investments, permitted dispositions, certain capital
expenditures and leases; (iii) permit the incurrence of any lien on the
Company's property and assets; (iv) incur other indebtedness, except for certain
capital leases up to $3.0 million, certain guaranties and existing indebtedness;
(v) pay cash dividends or repurchase its capital stock; (vi) violate certain
financial covenants; or (vii) engage in certain other transactions.

23
<PAGE>
INFLATION

Certain of the Company's product offerings, particularly paper products,
have been and are expected to continue to be subject to significant price
fluctuations due to inflationary and other market conditions. The Company is
generally able to pass such increased costs on to its customers through price
increases, although the Company may not be able to adjust its prices
immediately. In general, the Company does not believe that inflation has had a
material effect on its results of operations in recent years.

YEAR 2000

The Company is aware of the issues associated with the programming code in
existing computer systems as the millennium approaches. The Year 2000 problem is
pervasive and complex as virtually every computer operation will be affected in
some way by the rollover of the two digit year value to 00. The issue is whether
computer systems will properly recognize date-sensitive information when the
year changes to 2000. Systems that do not properly recognize such information
could generate erroneous data or cause a system to fail.

The Company is utilizing internal resources and outside consultants to
upgrade the Company's software for Year 2000 compliance. The Company's AS/400
hardware and operating system are already compliant. The Company is in the
process of selecting and installing new software in response to the Company's
expansion and acquisition program which will be Year 2000 compliant.

NEW ACCOUNTING PRONOUNCEMENTS

In June 1997, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 131, "Disclosures about Segments of an Enterprise and Related Information"
(the "Statement") which establishes standards for the way that public business
enterprises report information about operating segments in annual financial
statements and requires that those enterprises report selected information about
operating segments in interim financial reports issued to stockholders. The
Statement also establishes standards for related disclosures about products and
services, geographic area and major customers. The Statement requires that
enterprises report financial and descriptive information about its reportable
operating segments for annual periods beginning after December 15, 1997. The
Company is currently assessing the effects of SFAS No. 131 but does not expect
the standard to have a significant impact on the Company's financial condition
or results of operations.

24
<PAGE>
BUSINESS

OVERVIEW

The Company is a leading distributor of computer and office automation
supplies and accessories, projection presentation products and video
conferencing equipment throughout the United States and in certain foreign
countries. The Company distributes over 1,800 core products to approximately
25,000 customers comprised primarily of small to medium-size businesses and, to
a lesser extent, governmental, educational and institutional customers.

The Company sells primarily nationally-known, name-brand products
manufactured by approximately 500 original equipment manufacturers, including
Hewlett-Packard, Canon, Lexmark, and Imation for computer and office automation
supplies; Sharp, Epson and Proxima for projection presentation products; and the
Intel Team Station for video conferencing products. The Company's products
include consumable supplies such as laser toner, copier toner, facsimile machine
supplies, ink jet cartridges, printer ribbons, diskettes, computer tape
cartridges and accessories, paper, computer projection presentation hardware and
video conferencing hardware and software. The Company's products are used in, or
in conjunction with, a broad range of computer and office automation products
such as mainframe, mini, personal, laptop and LAN computers, laser and ink jet
printers, photocopiers, fax machines and data storage products.

The Company sells its products primarily through its 215 person direct sales
force, as opposed to through catalogue sales or retail outlets as is common in
its industry. The Company compensates its sales force primarily on a commission
basis. This compensation system provides the opportunity for individual sales
representatives to earn substantial incomes and has allowed the Company to
attract a highly professional and driven sales force. The direct sales force
model allows the Company to offer a high level of customer service to its
customer base, including detailed product advice, post-sale support and
customized account histories and billing. The Company's typical customers are
small to medium size corporate end-users that rely on distributors, such as the
Company, to provide a high level of value-added service. No single customer
accounted for more than 6.4% of the Company's fiscal year 1997 net sales or 1.8%
of net sales for the quarter ended March 31, 1998.

Internal sales growth has primarily resulted from the high level of customer
service that the Company attributes to its experienced, knowledgeable and
motivated sales force and to the Company's automated procedures that facilitate
the fulfillment of customer orders accurately and on an overnight basis. The
Company's internal growth has also been supported by recruitment of sales
personnel in new geographic markets.

25
<PAGE>
net sales through the acquisition of other computer and office automation supply
and projection presentation products companies, by continuing to offer
exceptional customer service and by expanding into new geographic markets.

THE COMPUTER SUPPLY AND PRESENTATION PRODUCTS INDUSTRY

The Company estimates that in 1997 the retail computer and office automation
supply market in the United States totaled approximately $28.4 billion. Industry
sources estimate that the U.S. market for computer and office automation
supplies will grow at a compound annual rate of approximately 6.0% to 8.0% over
the next two years. The Company believes that the current size and growth
potential of the industry are attributable to: (i) increasing automation of the
workplace as evidenced by the widespread use of PCs and computer networks, (ii)
a decline in the unit prices of computer hardware and peripherals making them
more affordable to small and medium-size businesses and to individuals, and
(iii) the advent and growth of high quality printers that require more
consumable supplies than older, less sophisticated printers.

In recent years, printer manufacturers have lowered prices in order to
establish a large installed base. The Company believes that the greater
availability of affordable printers will further increase the demand for
consumable computer supplies. Industry sources indicate that a customer that
purchases a printer may spend, over the life of the printer, twice as much on
consumable goods as the cost of the printer.

The Company estimates that the retail market for projection presentation
products was approximately $1.0 billion in 1997 and is expected to grow at a
rate of approximately 30.0% in 1998. The Company believes industry growth is
currently driven by improved business presentation and graphics software that
results in increased use of projection presentation hardware. While advances in
technology continue to result in lower prices in this market, projection
presentation products are priced at retail in the range of $2,500 to $30,000 and
currently provide for gross margins higher than other products sold by the
Company.

The Company believes that the computer and office automation supply segment
of its business is not generally subject to the risk of rapid technological
advance and product obsolescence associated with the computer hardware or office
equipment industries. In general, the demand for computer and office automation
supplies is not dependent on new computer hardware or office equipment sales in
any particular year, but rather reflects the installed base of equipment already
in use. As a result, the consumable needs for any particular computer or office
equipment will generally continue for an extended period of time, even after the
manufacture of the particular computer or office equipment has been
discontinued. Nevertheless, the Company attempts to insulate itself from the
risk of technological obsolescence faced by original equipment manufacturers by
(i) distributing a wide range of brand-name products, (ii) carrying primarily
consumable supplies for computer or office equipment that the Company believes
has a substantial installed base, and (iii) entering into agreements with major
suppliers that allow the Company to return slow-moving inventory. See
"--Inventory Management."

The Company believes that the role of distributors in the computer and
office automation supply and projection presentation products industry has
increased in importance in recent years as demand for these products has
increased dramatically and the number of products to choose from and the issues
of compatibility of products have proliferated. The Company serves the needs of
customers through its knowledgeable sales and customer service personnel and
timely and accurate order fulfillment.

THE COMPANY'S MARKET

While the Company operates in all business segments of the computer and
office automation supply and projection presentation products distribution
industry, its primary market is small and medium-size businesses and, to a
lesser extent, large businesses, governments and institutions.

26
<PAGE>
The small business segment consists of businesses having 50 or fewer
white-collar employees. This segment has traditionally been served by small
independent retailers located in close proximity to the customer and that sell
generally at manufacturers' suggested list prices. More recently, the segment
has been targeted by the retail office products superstores and direct mail
order companies that seek large market share by offering lower prices and a wide
product selection.

The medium-size business segment consists of a broad range of product users
having 50 to 500 white-collar employees. This segment historically has been
serviced by traditional contract stationers and full-service office products
distributors, and to a lesser extent by small local retailers and direct mail
order companies. The Company believes that such competitors do not provide all
of the services that small and medium size businesses need or desire, such as
customized account histories, customized billing, customized packing and
shipping, and the technical expertise of a knowledgeable sales force. The
Company provides these services to customers in the normal course of its
business.

The large business segment of the market consists of businesses, governments
and institutions having more than 500 white-collar employees. This segment
historically has been served by traditional contract stationers and full service
office products distributors. These customers, many of whom have multiple
locations, seek competitively priced products, a high level of value-added
service, account relationship management and other information services.
Although many of these organizations have a centralized purchasing function for
office and computer supplies, the Company has found through experience that
certain purchasing authority is decentralized. As a result, the Company's sales
force attempts to visit not only the central purchasing manager, but also the
computer network manager, the PC coordinator, the facilities manager and the
office manager at such businesses, each of whom may have different computer
supply needs and purchasing or budgetary authority.

Historically, the corporate computer supply and office automation
distribution segment has consisted of numerous contract stationers and computer
supply companies, most of which operate in only one metropolitan area and have
annual sales of less than $15.0 million. However, the computer and office
automation and projection presentation products distribution industry is rapidly
consolidating and the Company believes that many small companies will be unable
to effectively compete, will be acquired by larger companies or will be closed.
Based upon annual sales, the Company believes it is the largest independent
computer and office automation and projection presentation products distribution
company in the United States.

BUSINESS STRATEGY

The Company's objective is to enhance its position as a leading distributor
of computer and office automation supplies and projection presentation products,
and to continue to increase net sales and net income through effective
implementation of its operating and growth strategies.

OPERATING STRATEGIES

- PROVIDE SUPERIOR CUSTOMER SERVICE. Customer service is at the core of the
Company's operating philosophy. The Company provides its customers with
high quality service and support through: its knowledgeable and motivated
sales force, database and software capabilities that allow sales personnel
real-time access to account histories and product pricing information,
accurate and efficient delivery programs that fulfill most orders on an
overnight basis, and effective post-sale service and product return
programs.

- OFFER BROAD PRODUCT SELECTION AT COMPETITIVE PRICES. The Company
distributes over 23,500 different computer and office automation supplies
and related products at competitive price points. The Company maintains a
wide selection of name-brand products in stock to be shipped on a same day
basis and delivered overnight.

27
<PAGE>
- CAPITALIZE ON INDUSTRY FOCUS. The Company has focused solely on the
computer supply and office automation and projection presentation products
industry and believes it has grown to be the largest such independent
company in the industry. The Company believes its industry specialization
provides an advantage over many of the Company's competitors, who are
either substantially smaller businesses or who serve multiple or broader
markets. The Company's niche focus allows the Company to effectively
evaluate industry trends and opportunities, provide specialized customer
service, establish and maintain advantageous vendor relationships and
evaluate and capitalize on acquisition opportunities.

- DEVELOP AND MAINTAIN STRONG VENDOR RELATIONSHIPS. The Company's size and
position in the industry permit it to negotiate attractive pricing and
volume discounts from vendors. These discounts enable the Company to
maintain its gross margin and also give the Company a competitive
advantage, since such discounts are generally unavailable to smaller
competitors. The Company believes that continued growth will strengthen
its vendor relationships.

- INCREASE PROFITABILITY THROUGH WELL MANAGED GROWTH. The Company has
successfully completed eleven acquisitions and generated substantial
internal growth while concurrently achieving increases in earnings per
share. The Company's success has resulted from the careful selection and
management of acquisitions, effective selling strategies and effective
management of operating costs.

- UTILIZE TECHNOLOGY TO IMPROVE OPERATIONS. The Company has continuously
upgraded its MIS and telecommunications systems to support its growth and
expansion. The Company anticipates that it will install new financial,
inventory control and distribution software in fiscal year 1998.

GROWTH STRATEGIES

- PURSUE COMPLEMENTARY, ACCRETIVE ACQUISITIONS. The Company believes that
the domestic and certain foreign computer supply and projection
presentation markets are highly fragmented and consist primarily of
relatively smaller companies that sell within limited geographical areas.
The Company believes that a significant consolidation opportunity exists
and the Company intends to continue its aggressive program of consummating
accretive acquisitions with companies in this industry.

- INCREASE SALES TO EXISTING CUSTOMERS. The Company intends to increase
sales to existing customers by emphasizing vertical marketing,
cross-selling and add-on sales in order to increase the average order
size. This effort will be supported by providing sales personnel with
additional information about customer needs, customer purchasing patterns
and product pricing options at the time of the sales call through the use
of the Company's MIS.

- INCREASE REVENUES THROUGH SALES TO NEW CUSTOMERS IN EXPANDED GEOGRAPHIC
MARKETS. The Company intends to develop relationships with new customers
in geographic locations not currently served by the Company by increasing
the size of its sales force and by providing its sales representatives
with greater training, support and sales leads relevant to the opening of
new customer accounts.

28
<PAGE>
ACQUISITIONS

Since fiscal year 1991, the Company has acquired nine regional computer and
office automation supply companies and two projection presentation products
companies, eight of which were acquired between April 1997 and March 1998.

The following table sets forth certain information concerning the businesses
acquired by the Company since inception:

<TABLE>
<CAPTION>
APPROXIMATE NET SALES
OF ACQUIRED BUSINESS IN PRIMARY
FISCAL YEAR PRIOR TO U.S. GEOGRAPHIC
NAME OF BUSINESS ACQUIRED DATE OF ACQUISITION ACQUISITION ($000)(1) AREA
- ------------------------------------------- ---------------------- ----------------------- -------------------
<S> <C> <C> <C>
Datron Computer Products, Inc.............. May 1, 1993 $ 2,500 Northeast

Paper Rolls and Computer Supplies, Inc..... July 1, 1994 3,200 Midwest

Diversified Data Products, Inc............. May 30, 1996 13,300 Midwest

Imperial Data Supply Corporation........... April 30, 1997 6,400 Northwest

Data Associates, Inc....................... July 1, 1997 5,900 Southeast

Force 4 D.P. Supplies, Inc................. July 15, 1997 11,400 Northwest

NTI Data Products, Inc..................... October 7, 1997 5,600 Northeast

Britco, Inc................................ December 5, 1997 15,700 Southwest

TBS Printware Corporation.................. December 31, 1997 21,800 Western

Minnesota Western/Creative Office Products,
Inc...................................... January 15, 1998 49,300 Western

Computer Showcase, Inc..................... March 3, 1998 6,000 Southeast
</TABLE>

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

(1) The information presented is solely for the purposes of illustrating the
relative size of the companies acquired and (except for Britco and TBS) is
based on the unaudited financial statements of such companies.

The Company intends to continue to implement its aggressive strategy of
acquiring computer supply and office automation and projection presentation
products companies. The typical acquisition candidate of the Company has a
middle-market corporate end-user customer base in a major metropolitan area and
sales of between $5.0 and $75.0 million. Management believes that attractive
acquisition opportunities exist due to the need of these companies to affiliate
with larger organizations in order to remain competitive. The Company's broad
supplier relationships, cross-selling opportunities, expanded product line and
in-house technical support enable such companies to realize additional net sales
and higher gross margins after the acquisition.

Although other larger, better-financed companies are currently engaged in
the rapid consolidation of the office supply industry, and to a lesser extent,
of computer supply distributors, the Company believes that it can continue to
effectively compete for acquisitions it its market. The Company believes its
competitive advantages are related to the Company's existing relationships with
many of its potential acquisition targets, the Company's ability to offer such
targets growth potential and operating support, and an acquisition philosophy
that is attractive to acquisition candidates. The acquisition philosophy of the
Company is to retain management and the sales force of the target and not to
undertake employee terminations or compensation adjustments. The Company also
provides its sales representatives with significant autonomy. The Company
believes that it is the only company currently focusing on acquiring

29
<PAGE>
exclusively computer and office automation supply and projection presentation
products distribution companies.

The Company's acquisitions are typically funded with a combination of cash
and Common Stock. The cash portion of the purchase consideration is generally
borrowed by the Company under the Credit Facility, or, to a lesser extent,
generated from operations. The Company intends to file a registration statement
with the Commission as soon as practicable to register up to 2,000,000 shares of
Common Stock for use in future acquisitions. See "Risk Factors--Financing for
Acquisitions; Additional Dilution," "-- Financing for Acquisitions--Leverage"
and "--Need for Additional Financing to Implement Acquisition Strategy" for
additional information relating to the financing of such acquisitions.

PRODUCTS

The Company distributes an aggregate of over 23,500 computer and office
automation supplies and related products and more than 1,800 core products out
of inventory. The Company regularly updates its product line to reflect advances
in technology and to avoid product obsolescence. The Company's major product
categories may generally be classified as follows:

NON-IMPACT PRINTER SUPPLIES. Non-impact printer supplies include toner
cartridges, ink jet cartridges, optical photo conductor kits and copier and fax
supplies. Non-impact printers, such as laser printers, copiers and fax machines,
are rapidly growing in popularity and have a wide range of applications. Sales
of non-impact printer supplies accounted for approximately 55.8% and 36.0%,
respectively, of the Company's total net sales for its fiscal year 1997 and for
the three months ended March 31, 1998.

IMPACT PRINTER SUPPLIES. Impact printer supplies include printwheels,
ribbons, elements, fonts and other consumable supplies used in impact printers,
ranging from electronic typewriters to high speed dot matrix printers. While new
technology is moving toward non-impact printing, a substantial installed base of
impact printers still exists and requires consumable computer supplies. Sales of
impact printer supplies accounted for approximately 6.6% and 4.4%, respectively,
of the Company's total net sales for its fiscal year 1997 and for the three
months ended March 31, 1998.

MAGNETIC MEDIA PRODUCTS. Magnetic media products include computer tapes,
data cartridges, diskettes, optical disks, recordable compact disks and other
products which store or record computer information. These products are used in
a variety of computers ranging from notebook and personal computers to large
mainframe computer systems. Sales of magnetic media products accounted for
approximately 11.0% and 8.8%, respectively, of the Company's total net sales for
its fiscal year 1997 and for the three months ended March 31, 1998.

PROJECTION PRESENTATION PRODUCTS. Projection presentation products sold by
the Company include overhead projectors, LCD projection panels, LCD portable
projectors, laser pointers, projection screens and other projection presentation
accessories. Projection presentation products permit the large-scale,

30
<PAGE>
high resolution projection of computer generated slides for presentations to
multi-person meetings. Sales of projection presentation products accounted for
approximately 8.0% and 28.9%, respectively, of the Company's total net sales for
its fiscal year 1997 and for the three months ended March 31, 1998.

ACCESSORIES AND OTHER PRODUCTS. Accessories sold by the Company include
cleaning supplies, hardware peripherals, disk and data cartridge storage, point
of sale and bar code supplies, racks, surge protection devices and workstation
accessories. The Company also sells a limited number of other products such as
paper, transparencies, banking supplies and selected business machines. Sales of
accessories and other products accounted for approximately 18.6% and 21.9%,
respectively, of the Company's total net sales for its fiscal year 1997 and for
the three months ended March 31, 1998.

SUPPLIERS

The Company's computer supply and office automation products are
manufactured by approximately 500 original equipment manufacturers, including
Hewlett-Packard, Canon, Lexmark and Imation. The Company's projection
presentation products are manufactured by three major original equipment
manufacturers, Sharp, Epson and Proxima. Approximately 51.9% and 64.0%,
respectively, of the Company's total net sales were derived from products
supplied by the Company's ten largest original equipment manufacturers for its
fiscal year 1997 and for the three months ended March 31, 1998. The sales of
products supplied by Hewlett-Packard, Canon and Lexmark accounted for
approximately 14.6%, 12.4% and 7.8%, respectively, of total net sales for fiscal
year 1997.

The Company has entered into written distribution agreements with a majority
of the major suppliers of the products it distributes including Hewlett-Packard,
Lexmark, Imation, Sharp, Epson and Proxima. As is customary in the industry,
these agreements generally provide non-exclusive distribution rights, have one
year renewable terms, are terminable by either party at any time (with or
without cause) and require notice of certain events such as a change in control
of the Company. The Company considers its relationship with its major suppliers
to be good and has recently renewed its direct purchasing agreements with
Hewlett-Packard and several other suppliers. The Company is also discussing
expanded direct purchasing arrangements with several major suppliers that would
provide the Company with a broader product line and increased customer base.
There can be no assurance, however, that a material change in the Company's
relationship with one or more of its major suppliers will not occur and if it
does occur, that it will not have a material adverse effect on the Company's
business. See "Risk Factors--Dependence on Certain Key Suppliers."

Certain of the Company's major suppliers offer rebate programs under which,
subject to the Company purchasing certain predetermined amounts of product, the
Company receives rebates of the dollar volume of total rebate program purchases.
The Company also takes advantage of several other programs offered by
substantially all of its suppliers. These programs include price protection
plans under which the Company receives credits against future purchases if the
supplier lowers prices on previously purchased inventory and stock rotation, or
stock balancing privileges, under which the Company can return slow moving
inventory in exchange for other products.

Although the Company purchases most of its products directly from authorized
U.S. manufacturers, the Company also purchases products from foreign and other
domestic sources, such as wholesalers and selected dealers. Approximately 41.6%
and 17.1%, respectively, of the Company's total net sales were derived from the
sale of products purchased from sources other than the direct manufacturer for
its fiscal year 1997 and for the three months ended March 31, 1998. The Company
purchases products from these sources to maintain its gross margin and provide
its customers with competitive prices. To avoid purchasing imported and
secondary sourced products produced by unauthorized manufacturers, the Company
has established various procedures to identify unauthorized products. There can
be no assurance, however, that the Company will be completely successful in such
efforts or that such imported and secondary source products will continue to be
available.

31
<PAGE>
SALES AND MARKETING

The Company sells its products to approximately 25,000 small and medium-size
businesses and, to a lesser extent, governmental, educational and institutional
customers. The Company's typical customer is a small or medium size corporate
end-user who relies on distributors, such as the Company, that provide a high
level of value-added service. No single customer accounted for more than 6.4% or
1.8%, respectively, of the Company's sales for its fiscal year 1997 and for the
three months ended March 31, 1998. The Company's international sales accounted
for approximately 3.0% and 1.1%, respectively, of the Company's total net sales
for its fiscal year 1997 and for the three months ended March 31, 1998.

The Company's sales force provides national sales coverage and, as of March
31, 1998, consisted of 215 full-time sales representatives that work out of the
Company's headquarters in Dayton, Ohio and from its 48 other sales offices,
located in numerous geographic locations throughout the United States. The
Company relies on its direct sales force to initiate sales contacts, follow up
on leads provided by manufacturers and to engage in face-to-face contact with
its customers to solicit orders and provide service. The Company also employs a
telemarketing staff which focuses on federal government and other corporate
customers.

The Company's sales representatives have the ability to quote a competitive
price to the customer within a range that maintains an acceptable margin for the
Company. In addition, the sales force works with the Company's customers to
simplify and reduce the cost of the product procurement process by providing
customized facsimile order forms, EDI processing and customized billing and
shipping.

The Company believes that its ability to maintain and grow its customer and
net sales base will depend, in part, on its ability to maintain a high level of
customer satisfaction, as well as competitive prices. The Company believes that
its customers typically purchase computer supply and office automation products
based on an established long-term business relationship with their primary
suppliers. The Company establishes and maintains its relationships with
customers by assigning a sales and an in-house customer service representative
to most customers. Sales representatives have frequent contact with their
customers and are responsible for increasing account penetration and providing
customer service. Sales representatives also are responsible for marketing
efforts directed to prospective customers and for responding to all bid and/or
contract requests for their existing and prospective customers. Sales
representatives are compensated almost exclusively on a commission basis and
also receive Company benefits such as incentive recognition trips if quotas are
met. This compensation system provides the opportunity for individual sales
representatives to earn substantial incomes and has allowed the Company to
attract a highly professional and driven sales force. The direct sales force
model allows the Company to offer a high level of customer service to its
customer base, including detailed product advice, post-sale support and
customized account histories and billing. In order to maintain relationships,
the Company ensures its sales force is highly knowledgeable about its products
through the use of training programs and cross promotion. The Company also
endeavors to locate and supply "difficult to find" items for its customers and
to provide post-sale technical support. The Company believes that its
personalized marketing strategy offers it a competitive advantage in responding
to the needs of each customer.

In order to ensure that the sales force is performing to its potential, the
Company and each individual salesperson annually reviews and sets sales goals.
The Company regularly monitors the performance of its sales staff by reviewing
sales and margin profitability. The Company pre-screens qualified applicants,
emphasizes continual training and sets realistic sales goals.

DISTRIBUTION

The Company's primary sales and distribution center is located in Dayton,
Ohio. The Company operates thirteen smaller regional sales and distribution
centers located in Rochester, New York, Louisville, Kentucky, Chicago, Illinois,
Salt Lake City, Utah, Ann Arbor, Michigan, Spokane, Washington, Atlanta,
Georgia, Portland, Oregon, Houston, Texas, Berkeley, California, Fremont,
California and Leeds,

32
<PAGE>
England. The Company also maintains a limited inventory of frequently ordered
products in 35 of its other sales offices in order to facilitate same day
delivery. This distribution network allows the Company to ship products to every
state in the United States and to its international customers on a timely basis.

The Company believes that the automation achieved through its MIS has
resulted in: (i) more efficient management of its inventory; (ii) a consistently
high picking accuracy rate that has reduced shipping errors and the associated
costs of returned merchandise; (iii) significant savings as a result of
customized packaging which takes advantage of weight discounts and provides for
less frequent deliveries; and (iv) improved customer service which includes
order acceptance times as late as 7:00 p.m. Eastern Time.

The Company ships its products primarily with United Parcel Service ("UPS")
or Roadway Package System ("RPS"). The Company's arrangements with UPS and RPS
enable it to offer to its customers a competitive shipping rate and next
business day delivery to most areas within the United States. When the Company
ships packages with UPS or RPS, it will label the package with a UPS or RPS bar
code for tracking purposes, enabling the Company to track a customer's package
from the time it is put on the courier's vehicle until delivery. Some of the
Company's products are shipped from the manufacturer directly to the Company's
customers.

INVENTORY MANAGEMENT

The Company manages its inventory by maintaining sufficient quantities of
the most frequently ordered products to achieve high order fill rates while at
the same time attempting to maximize inventory turns. Items not maintained in
inventory are drop-shipped (i.e., shipped from the manufacturer's loading dock)
directly to the Company's customers. While the Company sells more than 23,500
stock keeping units ("SKUs") or items of merchandise, approximately 550 SKUs
account for approximately 70.0% of the Company's net sales. Consequently, the
Company continually attempts to identify slow moving inventory by use of its
computer software applications and removes those SKUs whenever possible in order
to maximize inventory turns. Inventory balances will fluctuate as the Company
adds new product lines, when it makes large purchases from suppliers to take
advantage of attractive terms and when certain inventory items are deleted.
Inventory turns on an annual basis remained consistent at 12 times for the years
ended December 31, 1996 and 1997.

The Company permits its customers to return defective products (most of
which are then returned by the Company to the manufacturer) and incorrect
shipments for credit against other purchases. To date, the Company's net expense
for returns of the Company's consumable supply products has not been material.
To reduce the risk of loss to the Company due to manufacturer price reductions
and slow moving or obsolete inventory, the Company's agreements with certain
manufacturers, including most of its major suppliers, contain provisions which
permit "stock balancing" and, subject to certain restrictions, price protection.
See "--Suppliers."

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<PAGE>
FACILITIES

The Company's principal executive offices are located in Dayton, Ohio. The
Company leases all of its office and warehouse space for use in the ordinary
course of business. The leases expire at various times through 2006 and some of
the Company's leases contain options to renew. The Company expects that it will
be able to renew leases expiring in 1998 at rents which are substantially
similar to current rent payments on a square footage basis.

The Company's material leased properties are its warehouse locations which
are described in the table below:

<TABLE>
<CAPTION>
LEASE
----------------------------
LOCATION SQUARE FEET EXPIRATION DATE
- ---------------------------------------------------------------- ----------- ---------------
<S> <C> <C>
Ann Arbor, Michigan............................................. 5,500 1998
Atlanta, Georgia................................................ 7,789 2000
Berkeley, California............................................ 36,000 2004
Dayton, Ohio.................................................... 30,000 2006
Fremont, California............................................. 1,850 2001
Houston, Texas.................................................. 9,140 1998
Leeds, England.................................................. 500 monthly
Louisville, Kentucky............................................ 7,500 2004
Norcross, Georgia............................................... 3,810 1998
Portland, Oregon................................................ 6,000 1998
Rochester, New York............................................. 12,032 2000
Seattle, Washington............................................. 1,100 2000
Spokane, Washington............................................. 15,000 1999
Spokane, Washington............................................. 5,070 2000
Tustin, California.............................................. 16,300 2002
</TABLE>

MANAGEMENT INFORMATION SYSTEMS

Between January 1, 1992 and March 31, 1998, the Company invested
approximately $1.5 million in hardware, software and programming upgrades to its
MIS, which is run from an IBM AS/400 computer located at its Dayton, Ohio
headquarters, and has automated a large number of key business functions using
on-line, real time systems. These on-line systems provide management with real
time information concerning sales, inventory levels, customer payments and other
operations which are essential for the Company to operate as a low cost, high
efficiency distributor. Each of the Company's offices have either a direct,
full-time dedicated link to the Company's in-house computer system, or may
obtain such access through the Internet. The Company maintains seven full-time
computer programmers to administer and upgrade the Company's software
capability. The "down time" for the Company's computer system has been
negligible to date. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Liquidity and Capital Resources."

EMPLOYEES

As of March 31, 1998, the Company had 490 full-time employees and 13
part-time employees, of which 243 were in executive and administrative
positions, including accounting, marketing, purchasing, credit and management
information systems, 215 were in sales and 45 were in warehousing and related
functions. None of the Company's employees are represented by a labor union, and
the Company has never suffered an interruption of business as a result of a
labor dispute. The Company considers its relations with its employees to be
excellent.

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<PAGE>
COMPETITION

The Company believes that most, if not all, of its customers maintain
several sources of supply for their product requirements. Accordingly, the
Company competes with major full-service office products distributors, other
national and regional computer supply distributors, office products superstores,
direct mail order companies, and to a lesser extent, non-specialized retailers.
Certain of the Company's competitors, such as office products superstores and
major full-service office products distributors, are larger and have
substantially greater financial and other resources and purchasing power than
the Company. Competition in the Company's industry is generally based on price,
breadth of product lines, product and credit availability, a knowledgeable sales
force, delivery time and the level and quality of customer service. The Company
believes that the computer supply industry will become more consolidated in the
future and thereby more competitive. Increasing competition may result in
greater price discounting which will continue to have a negative impact on the
industry's gross margins.

The Company believes its competitive advantage over other distributors
includes its ability to efficiently maintain a wide selection of name-brand
products in stock ready to be shipped on a same day basis and delivered
overnight, to efficiently distribute its products, to provide innovative and
high quality value-added customer service programs and to respond to changing
customer demand and product development.

ENVIRONMENTAL MATTERS

The Company is subject to federal, state and local laws, regulations and
ordinances that: govern activities or operations that may have adverse
environmental effects, such as discharges to air and water as well as handling
and disposal practices for solid and hazardous wastes or impose liability for
the costs of cleaning up, and certain damages resulting from, sites of past
spills, disposals or other releases of hazardous substances.

The Company currently is not aware of any environmental conditions relating
to present or past waste generation at or from its facilities or operations,
that would be likely to have a material adverse effect on the financial
condition or results of operations of the Company. However, there can be no
assurance that environmental liabilities in the future will not have a material
adverse effect on the financial condition or results of operations of the
Company.

LEGAL PROCEEDINGS

The Company is a party to commercial litigation from time to time. As of the
date of this Prospectus, the Company believes there is no litigation that is
material to the Company or its business.

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<PAGE>
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

The Company's Board of Directors currently consists of five members all of
whom are elected annually. The following table sets forth the name, age and
position of the directors and executive officers of the Company.

<TABLE>
<CAPTION>
NAME AGE POSITION
- --------------------------------------- --- ------------------------------------------------------------------
<S> <C> <C>
Anthony W. Liberati.................... 65 Chairman of the Board and Director
Michael E. Peppel...................... 31 President and Chief Executive Officer and Director
Robert G. Hecht........................ 57 Vice Chairman of the Board and Director
Harry F. Radcliffe..................... 47 Treasurer and Director
Thomas C. Winstel...................... 51 Secretary and Vice President--Presentation Products and Director
Roger E. Turvy......................... 58 Vice President--Product Sales and Development
John C. Huffman, III................... 40 Vice President--National Sales Manager
Mary A. Stewart........................ 41 Vice President--Operations
Ira H. Stanley......................... 46 Vice President--Finance
</TABLE>

ANTHONY W. LIBERATI. Mr. Liberati has been Chairman of the Board since May
1996, when LLC, of which he is the Manager--President and Chief Executive
Officer and a member, acquired a majority interest in the Company. Commencing in
1982 and until his retirement in August 1995, Mr. Liberati was employed by the
Edward J. DeBartolo Corporation, Youngstown, Ohio (the "DeBartolo Corporation"),
the nation's largest shopping center developer and the owner of the San
Francisco 49ers professional football team. At the time of his retirement, Mr.
Liberati was the Chief Operating Officer of the DeBartolo Corporation. Prior to
his appointment as the Chief Operating Officer, he was the DeBartolo
Corporation's Chief Financial Officer for ten years. Mr. Liberati is a director
of Hawthorne Financial Corporation, Los Angeles, California, a savings
institution holding company which is traded on the Nasdaq National Market, and
First Fidelity Bancorp, Irvine, California, a privately held thrift and loan
holding company and is a former member of the Board of Directors of DeBartolo
Realty Corporation, Youngstown, Ohio, which was a New York Stock Exchange-traded
real estate investment trust until its merger into Simon Property Group, Inc. in
November 1996. He is a current member of the Board of Directors of Imperial Land
Company, Pittsburgh, Pennsylvania, a privately held land-bank company, Quality
Aggregates, Inc., Pittsburgh, Pennsylvania, a privately held materials supply
company, and Pennsylvania Capital Bank, Pittsburgh, Pennsylvania, a privately
held Pennsylvania commercial bank. He attended Duquesne University, Pittsburgh,
Pennsylvania.

MICHAEL E. PEPPEL. Mr. Peppel joined the Company in May 1996 and served as
the Company's Chief Financial Officer from May 1996 to December 1997. He was
elected President and Chief Executive Officer of the Company as of January 1,
1998 and was elected to the Board of Directors as of February 24, 1998. Mr.
Peppel is a member of the Company's Executive Management Committee, a committee
composed of management which deals with Company operating issues. Mr. Peppel is
also an officer and member of LLC. From November 1990 to May 1996, he was a
director and Chief Financial Officer of Diversified Data Products, Inc. which
was acquired by LLC and contributed to the Company in May 1996. From April 1987
to October 1990, he was the money desk manager for the DeBartolo Corporation,
Youngstown, Ohio. Mr. Peppel received his degree in economics and finance from
the University of Notre Dame.

ROBERT G. HECHT. Mr. Hecht became a Director of the Company in May 1996 and
is also a member of LLC, a stockholder of the Company. Mr. Hecht is the Chief
Executive Officer of Trumbull Corporation, a privately held highway construction
company, President of Allegheny Asphalt Manufacturing, Inc., a privately held
material supply company, is the Executive Vice President for P.J. Dick
Incorporated, a privately held construction company and is the Executive Vice
President of Lindy Paving, Inc., a privately

36
<PAGE>
held paving company, all of which are located in Pittsburgh, Pennsylvania. Mr.
Hecht is also a director of Essex Bancorp, Virginia Beach, Virginia, a savings
institution holding company which is traded on the American Stock Exchange. Mr.
Hecht received his Juris Doctor degree from the University of Pittsburgh,
Pittsburgh, Pennsylvania and his undergraduate degree in engineering from the
U.S. Naval Academy. Mr. Hecht is the Co-Chairman of the Washington County
Southwestern Pennsylvania Growth Alliance and a member of the Board of Directors
of the Children's Home of Pittsburgh.

HARRY F. RADCLIFFE. Mr. Radcliffe, an officer and member of LLC, was
elected as a Director in May 1996. He has been the President and Chief Executive
Officer of Fort Pitt Capital Management, Pittsburgh, Pennsylvania, a private
investment management company, since September 1995 and was the President and
Chief Executive Officer of First Home Bancorp, Inc., a privately-held savings
institution holding company until its sale in April 1996. He is a director of
Essex Bancorp, Virginia Beach, Virginia, a savings institution holding company
which is traded on the American Stock Exchange, of Hawthorne Financial
Corporation, Los Angeles, California, a savings institution holding company
which is traded on the Nasdaq National Market, and First Fidelity Bancorp,
Irvine, California, a privately held thrift and loan holding company. From 1989
to 1993, Mr. Radcliffe was the President and Chief Executive Officer of First
South Savings Association, a Pennsylvania-chartered stock savings association
located in Pittsburgh, Pennsylvania. Mr. Radcliffe received his degree in
economics from Ohio Wesleyan University.

THOMAS C. WINSTEL. Mr. Winstel co-founded the Company in 1981 and has been
a Director, the Company's Secretary, and a Vice President of the Company since
that time. Mr. Winstel has been the corporate Secretary of the Company since May
1996. Mr. Winstel is a member of the Company's Executive Management Committee.
Mr. Winstel received his marketing degree from the University of Dayton, Ohio.

ROGER E. TURVY. Mr. Turvy joined the Company in 1981 and has been the Vice
President--Product Sales and Development since that time. Mr. Turvy is a member
of the Company's Executive Management Committee. Mr. Turvy received his degree
in mathematics and business from Miami University, Oxford, Ohio and his MBA from
Ohio State University. Mr. Turvy is the brother-in-law of Albert L. Schwarz, who
retired effective January 1, 1998.

JOHN C. HUFFMAN, III. Mr. Huffman joined the Company in 1981 and is the
Company's Vice President--National Sales Manager. He is a member of the
Company's Executive Management Committee. Mr. Huffman was the General Manager of
the Company from 1985 to 1987, the Dayton Sales Manager from 1987 to 1989 and
has been the National Sales Manager since 1989. Mr. Huffman received his degree
in business management from Wright State University, Fairborn, Ohio.

MARY A. STEWART. Ms. Stewart joined the Company in 1989 as a staff
accountant and is currently the Company's Vice President--Operations. From 1991
to May 1996, Ms. Stewart served the Company as Controller. She is a member of
the Company's Executive Management Committee.

IRA H. STANLEY. Mr. Stanley joined the Company as Vice President--Finance
on April 1, 1998. Prior thereto, from 1990 to March 1998, Mr. Stanley was the
Vice President of Finance and Treasurer of Gosiger, Inc., a privately held
importer and distributor of machine tools, located in Dayton, Ohio. Mr.
Stanley's position prior thereto was as Corporate Controller of Price Brothers
Company, a manufacturer and distributor of construction products, located in
Dayton, Ohio. Mr. Stanley received his MBA from the University of Dayton,
Dayton, Ohio, and his undergraduate degree in business from Wright State
University, Dayton, Ohio. He is a member of the Company's Executive Management
Committee.

THE BOARD OF DIRECTORS

The Articles and Code of Regulations of the Company provide that the Board
may, by resolution of a majority of the continuing directors (as defined by the
Articles) then in office, divide the Board into two or three classes as nearly
equal in number as possible, each class having not less than three directors,
with one class to be elected annually for a term of two or three years,
respectively. Such "staggering" of the terms of

37
<PAGE>
the members of the Board of Directors could make it easier for incumbent Board
members to retain their status and make it more difficult for stockholders to
replace the entire Board of Directors at one meeting of stockholders. For
certain other terms and conditions in the Articles and the Code of Regulations
which also may have an antitakeover effect, see "Restrictions on Acquisition of
the Company." Officers are elected annually by the Board of Directors and serve
at the discretion of the Board.

COMMITTEES OF THE BOARD

The Board of Directors has an Executive Committee, Compensation Committee
and Audit Committee. The Executive Committee is composed of all members of the
Board of Directors and has the authority to act as the Board of Directors when
the Board is not in session. Actions of the Executive Committee may be taken
upon the affirmative vote of any three of the five directors provided that of
the three directors who are so acting, one must be a non-employee director.
Executive Committee decisions must be ratified by the Board of Directors at its
next regularly scheduled meeting. The Compensation Committee, currently
comprised of Messrs. Liberati, Hecht and Radcliffe, has the authority to approve
salaries and bonuses and other compensation matters for executive officers of
the Company and reviews and approves employee health and benefit plans. The
Audit Committee, currently comprised of Messrs. Liberati, Hecht and Radcliffe,
has the authority to recommend the appointment of the Company's independent
accountants and review the results and scope of audits, internal accounting
controls and tax and other accounting-related matters.

DIRECTOR COMPENSATION

The Board of Directors currently meets monthly and is required to meet not
less than quarterly. Non-employee directors currently receive a retainer of
$2,500 per quarter, $1,000 per Board meeting attended and $250 per committee
meeting attended for serving on the Board or any committee of the Board, and are
reimbursed for their out-of-pocket expenses arising from attendance at Board or
committee meetings. They also participate in the Non-employee Directors Stock
Option Plan. See "--Employee Benefit Plans--Non-employee Directors Stock Option
Plan." Directors who are also employees receive no compensation for attending
such meetings other than their stated compensation.

EXECUTIVE COMPENSATION

The following table sets forth a summary of certain information concerning
the compensation paid by the Company for services rendered in all capacities
during the years ended December 31, 1997, 1996 and 1995 to the President and to
each of the three most highly compensated executive officers (other than the
President) of the Company (the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
ANNUAL COMPENSATION SECURITIES
--------------------------------- UNDERLYING ALL OTHER
NAME AND POSITION YEAR SALARY(1) BONUS(2) OPTIONS(#) COMPENSATION(3)
- --------------------------------------------------- --------- ---------- ---------- ----------- ----------------
<S> <C> <C> <C> <C> <C>

Albert L. Schwarz(1) .............................. 1997 $ 180,000 $ 180,000 -- $ 16,349
President 1996 110,235 239,536 38,250 25,651
1995 102,000 164,579 -- 19,650

Michael E. Peppel(1) .............................. 1997 130,452 130,452 -- 14,295
Vice President--Chief Financial Officer 1996 46,669 146,578 67,500 4,218

Thomas C. Winstel ................................. 1997 211,510 -- -- 15,014
Vice President--Presentation Products 1996 194,011 -- 22,500 20,293
1995 172,215 23,520 -- 16,650

John C. Huffman, III .............................. 1997 128,400 47,319 -- 13,297
Vice President--National Sales Manager 1996 118,800 9,063 -- 20,361
1995 92,000 13,975 -- 15,825
</TABLE>

(FOOTNOTES APPEAR ON NEXT PAGE)

38
<PAGE>
(CONTINUED FROM PRIOR PAGE)

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

(1) Effective January 1, 1998, Michael E. Peppel became the Company's President
and Chief Executive Officer upon the resignation of Albert L. Schwarz for
personal/health reasons, effective that date. See "--Employment Contracts."

(2) Bonuses shown for the fiscal years 1995 and 1996 were paid during fiscal
years 1996 and 1997, respectively, and bonuses for fiscal year 1997 were
paid during fiscal years 1997 and 1998. The fiscal year 1997 bonuses paid to
Messrs. Schwarz, Peppel, Winstel and Huffman were based on their employment
agreements. For fiscal years 1995 and 1996, Mr. Schwarz's bonuses were based
upon his prior employment agreement with the Company pursuant to which he
received 10.0% of the total sum of (i) the pre-tax net income, (ii) other
officers' bonus expenses, and (iii) the accrued profit sharing expense. Mr.
Winstel's fiscal year 1995 bonus was determined by the President (Mr.
Schwarz) of the Company. Mr. Huffman's fiscal year 1995 bonus was based upon
attaining business plan margin goals. Messrs. Schwarz's, Winstel's and
Huffman's previous employment agreements were terminated on May 30, 1996.
See "--Employment Contracts."

(3) All Other Compensation includes director's fees (for fiscal year 1995 and
through the second quarter of 1996) and expense reimbursement, car
allowance, premiums for split dollar life insurance coverage, sporting event
tickets, annual medical examination expenses, taxable relocation, temporary
housing and/or other executive or employee benefits. There was no stock
option plan in effect during fiscal year 1995 or the years prior thereto.

EMPLOYMENT CONTRACTS

On May 30, 1996, in conjunction with the acquisition of the controlling
interest in the Company by LLC, the Company entered into employment contracts
with Messrs. Schwarz, Peppel, Winstel, Huffman, and certain other employees,
which agreements are substantially similar except for compensation provisions.
Each such agreement terminates on December 31, 1999 unless sooner terminated for
death, physical or mental incapacity or cause (which is defined as the uncured
refusal to perform, or substantial neglect of, or an intentional failure to
perform, a material portion of the Named Executive Officer's duties, willful
misconduct, breach of a fiduciary duty involving personal gain, a material
breach of the employment agreement, or a felony conviction), or terminated by
the Named Executive Officer for the failure of the Company to provide the
resources necessary to the fulfillment of his responsibilities, the express
direction by the Board of Directors to have the Named Executive Officer perform
any illegal action, the threatened or actual insolvency of the Company or the
failure of the Company to perform its obligations to the Named Executive Officer
under the employment agreement. Mr. Peppel's agreement was amended by resolution
of the Board of Directors as to his salary only as of January, 1998. Mr.
Schwarz's agreement was terminated effective January 1, 1998.

In addition to, or in lieu of, a base salary, each such Named Executive
Officer is entitled to a bonus, or commission, as follows: (i) for fiscal year
1997 only, Mr. Schwarz received a bonus of 10.0% of pre-tax profits before
employee profit sharing or any other bonuses, which did not exceed the amount of
his base salary; (ii) Mr. Peppel is entitled to a bonus equal to 9.0% of the
pre-tax profits of the Company before employee profit sharing or any other
bonuses, which cash bonus will not exceed the amount of his base salary; (iii)
Mr. Winstel will receive a monthly commission in the amount of 40.0% of the
Gross Margin (as defined below) of all sales to certain accounts set forth in
Mr. Winstel's agreement plus the sum of $3,000 plus 5.0% of the Gross Margin on
sales of all presentation products, which commission will be paid only when the
amount of commission exceeds his monthly base salary and will be paid in lieu of
a monthly base salary; and (iv) Mr. Huffman will be paid a bonus of 0.5% of
Gross Margin over $9.0 million in any calendar year. "Gross Margin" is defined
by the employment agreements to mean the difference of the aggregate unit sales
price of products and the aggregate actual cost of the products to the Company.

39
<PAGE>
In addition, for fiscal year 1997, each of the Named Executive Officers
utilized a Company automobile for Company business having a retail value of up
to $35,000, for which the Company pays rent, insurance, repairs, gas, oil and
fees, of up to $1,200 per month.

The Named Executive Officers are granted up to six weeks vacation annually
and are entitled to participate in and receive the benefits of any pension or
other retirement benefit plan, profit sharing, stock options, employee stock
ownership, or other plans, benefits and privileges given to employees and
executives of the Company, to the extent commensurate with his then duties and
responsibilities, as fixed by the Board of Directors. Moreover, the Named
Executive Officers are eligible to participate in and may be covered by all
plans effective generally for executives of the Company with respect to life,
accident or health insurance, hospitalization, disability and other benefits.
The Company will pay or reimburse the Named Executive Officers for all
reasonable out-of-pocket expenses incurred or paid by him in connection with the
performance of his duties under the agreement. The contracts also provide for
the indemnification of the Named Executive Officers to the extent permitted by
the Company's Articles, Code of Regulations and applicable law, and the
valuation and purchase of the Executive's shares of Common Stock of the Company
if he is terminated for cause prior to December 31, 1999 and the Common Stock is
not, at the time of termination, publicly traded.

In consideration of the above, each of the Named Executive Officers also has
agreed, during the term of the agreement and for 12 months after the termination
of the agreement, not to compete with the Company in any area which is within a
100-mile radius of any existing office of the Company. All disputes are to be
resolved using alternative dispute resolution procedures (such as arbitration)
rather than litigation.

The Company has, in the past, entered into employment and non-competition
agreements with the senior management of the companies it has acquired and may
do so in the future.

On December 23, 1997, the Company entered into a Severance Agreement with
Albert L. Schwarz, then the President and a director of the Company. Pursuant to
the Severance Agreement, Mr. Schwarz retired from his position as President and
resigned as a member of the Board as of January 1, 1998. His Employment
Agreement, Split Dollar Life Insurance Agreement and Stock Option Agreement were
terminated. The Company accelerated the vesting of certain stock options so that
the number immediately exercisable at January 1, 1998 would be 38,250 (all other
granted options were cancelled) and agreed to use its best efforts to continue
health insurance benefits for Mr. Schwarz and his spouse until he reaches 65
years of age. The Company agreed to indemnify Mr. Schwarz as a former director
and officer and both parties agreed to release the other from or for claims
during Mr. Schwarz's time of employment. The Company will pay Mr. Schwarz
$20,000 per month from January 1, 1998 through December 31, 1999 and Mr. Schwarz
has agreed not to compete with the Company and to serve as a consultant to
assist and advise the Company in matters of transition and defense of the
Company's interest. During the transition period, management will consult with
Mr. Schwarz in matters of transition, defense of the Company's interest,
acquisitions, vendor relationships and other strategic matters.

EMPLOYEE BENEFIT PLANS

1996 STOCK OPTION PLAN. Effective September 19, 1996, the Board of
Directors of the Company adopted the 1996 Stock Option Plan (the "Stock Option
Plan") which was approved by the stockholders of the Company by the unanimous
written consent of the stockholders as of October 25, 1996. The Stock Option
Plan is designed to attract and retain qualified personnel in key positions,
provide officers and key employees with a proprietary interest in the Company as
an incentive to contribute to the success of the Company and to reward key
employees for outstanding performance and the attainment of targeted goals. The
Stock Option Plan provides for the grant of incentive stock options intended to
comply with the requirements of Section 422 of the Internal Revenue Code, as
amended (the "Code"). The Company reserved 375,000 shares of Common Stock for
issuance pursuant to the exercise of options ("Options")

40
<PAGE>

granted under the Stock Option Plan, subject to adjustment. The Stock Option
Plan is administered and interpreted by a committee of the Board of Directors
composed of non-employee directors ("Option Committee"). Unless sooner
terminated, the Stock Option Plan will be in effect until September 19, 2006,
ten years from the date of the adoption of the Stock Option Plan by the Board of
Directors. Options become vested and exercisable in the manner specified by the
Option Committee and all Options will become fully vested and exercisable in the
event of a change in control of the Company, as defined in the Stock Option
Plan.

Under current provisions of the Code, the federal income tax treatment of
incentive stock options is as follows. An optionee who meets certain holding
period requirements will not recognize income at the time the Option is granted
or at the time the Option is exercised, and a federal income tax deduction
generally will not be available to the Company at any time as a result of such
grant or exercise.

In fiscal year 1997, no Options to purchase shares of Common Stock were
granted to the Named Executive Officers and Options to purchase an aggregate of
9,900 shares of Common Stock were granted to three non-executive employees of
the Company. In January 1998, the remaining options in the Stock Option Plan
were granted to certain employees of the Company and its subsidiaries. On
January 15, 1998, Options to purchase 70,500 and 4,500 shares of Common Stock at
an exercise price of $9.17 per share were granted to Michael E. Peppel and John
C. Huffman, III, respectively. As of the date of this Prospectus, the Stock
Option Plan had 975 shares reserved for which Options had not been granted.

1998 STOCK OPTION PLAN. The Board of Directors adopted, and on April 29,
1998, the Company's stockholders approved the 1998 Stock Option Plan which is
designed to attract and retain qualified officers and other employees, provide
officers and other employees with a proprietary interest in the Company as an
incentive to contribute to the success of the Company and reward officers and
other employees for outstanding performance. The 1998 Stock Option Plan provides
for the grant of incentive stock options intended to comply with the
requirements of Section 422 of the Code and non-qualified or compensatory stock
options (together, the "1998 Options").

The 1998 Stock Option Plan is administered and interpreted by the Option
Committee, which is composed of non-employee directors. Under the 1998 Stock
Option Plan, the Option Committee will determine, among other things, which
officers and other employees will be granted 1998 Options, the performance goals
which must be met to receive 1998 Options, the number of shares subject to 1998
Options, the exercise price of the 1998 Option, whether such options may be
exercised by delivering other shares of Common Stock or other consideration and
when such options become exercisable. The per share exercise price of incentive
stock options is required by the Code to be at least equal to the fair market
value of a share of Common Stock on the date the option is granted. Compensatory
or non-qualified 1998 Options may have an exercise price no less than 85.0% of
the fair market value of a share of Common Stock on the date of grant.

The 1998 Options become vested and exercisable in the manner specified by
the Option Committee and all options will become fully vested and exercisable in
the event of a change in control of the Company, as defined in the 1998 Stock
Option Plan. Each 1998 Option or portion thereof will be exercisable at any time
on or after it vests and is exercisable until ten years after its date of grant
or three months after the date on which the optionee's employment terminates,
unless extended by the Option Committee to a period not to exceed five years
from such termination.

A total of 750,000 shares of Common Stock has been reserved for issuance
pursuant to the 1998 Stock Option Plan, subject to adjustment to reflect certain
increases or decreases in the total number of shares of Common Stock
outstanding. Unless sooner terminated, the 1998 Stock Option Plan shall continue
in effect for a period of ten years from the effective date, which is January
28, 1998, the date the 1998 Stock Option Plan was adopted by the Board and
became effective by its terms. The Board of Directors may at any time terminate
or amend the 1998 Stock Option Plan with respect to any shares of Common Stock
as to which options have not been granted, subject to any required stockholder
approval.

41
<PAGE>
Under current provisions of the Code, the federal income tax treatment of
incentive stock options and compensatory or non-qualified stock options is
different. With respect to incentive stock options, an optionee who meets
certain holding period requirements will not recognize income at the time the
option is granted or at the time the option is exercised, and a federal income
tax deduction generally will not be available to the Company at any time as a
result of such grant or exercise. With respect to compensatory or non-qualified
stock options, the difference between the fair market value on the date of
exercise and the option exercise price generally will be treated as compensation
income upon exercise, and the Company will be entitled to a deduction in the
amount of income so recognized by the optionee.

So long as an option is granted at fair market value on the date of grant,
neither the grant nor the exercise of an incentive stock option or a
compensatory or non-qualified stock option under the 1998 Stock Option Plan
currently requires any charge against earnings under generally accepted
accounting principles. If a non-qualified option has an exercise price of less
than fair market value, the Company would be required to accrue a charge of
compensation. In certain circumstances, shares issuable pursuant to outstanding
options under the 1998 Stock Option Plan might be considered outstanding for
purposes of calculating diluted earnings per share.

No 1998 Options to purchase shares of Common Stock have been granted to date
under the 1998 Stock Option Plan.

NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN. The Company's Non-employee
Directors Stock Option Plan (the "Directors Plan") provides for automatic grants
of non-qualified stock options on the date of each annual meeting of
stockholders, commencing with the 1997 annual stockholders meeting, to each
non-employee director of the Company, so long as shares of Common Stock remain
available under the Directors Plan. The Directors Plan calls for the grant of
options covering 22,500 shares of Common Stock to each person who was then a
non-employee director at the first annual meeting of stockholders following the
closing of the Company's initial public offering, which options will vest in
7,500 share increments. The first increment vested immediately, the second
increment vested on April 29, 1998 and the last increment will vest on the date
of the annual meeting of stockholders in 1999, except that all such options
shall become immediately vested if the Company engages in a Business
Combination, as defined by the Articles. Commencing on the date of the 1998
annual meeting of stockholders, and on the date of each such meeting thereafter,
each person who is a non-employee director, other than the non-employee
directors who received the 22,500 share grants at the 1997 annual meeting, will
be automatically granted a non-qualified stock option to purchase 7,500 shares
of Common Stock, not to exceed 22,500 shares for any director. All of the
options granted thereunder, except for the options granted on the date of the
1997 annual meeting, shall become immediately exercisable in full on the date of
grant. The exercise price of each option is the fair market value of the Common
Stock on the date of grant. Each option expires upon the earlier of ten years
after grant or one year after the recipient director ceases to serve as a
director. A total of 150,000 shares of Common Stock has been reserved for future
grants of options under the Directors Plan. In 1997, 67,500 options were granted
under the Directors Plan; none of such options have been exercised.

STOCK OPTION VALUES. As of December 31, 1997, the following number of
options were outstanding to the following executive officers of the Company with
an exercise price equal to $5.67 per share: 38,250 to Mr. Schwarz, 67,500 to Mr.
Peppel and 22,500 to Mr. Winstel. Except for Mr. Schwarz, these options are
subject to a three year vesting schedule which provides that one-third of such
options will vest annually beginning on November 15, 1997.

42
<PAGE>

AGGREGATE OPTION EXERCISES IN FISCAL YEAR
1997 AND DECEMBER 31, 1997 OPTION VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES ACQUIRED VALUE DECEMBER 31, 1997(#) DECEMBER 31, 1997($)(1)
ON EXERCISE REALIZED --------------------------- ---------------------------
NAME (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------------ --------------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Michael E. Peppel(2)................ -- $ -- 22,500 45,000 $88,110 $176,220

Albert L. Schwarz................... -- -- 38,250 -- 149,787 --

Thomas C. Winstel................... -- -- 7,500 15,000 29,370 58,740

John C. Huffman, III(3)............. -- -- -- -- -- --
</TABLE>

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

(1) Calculated by determining the difference between the fair market value of
the securities underlying the options at December 31, 1997, as quoted by
Nasdaq, and the exercise price of the options.

(2) Does not include options granted in January 1998 to Mr. Peppel for 70,500
shares of Common Stock at an exercise price of $9.17.

(3) Does not include options granted in January 1998 to Mr. Huffman for 4,500
shares of Common Stock at an exercise price of $9.17.

OTHER EMPLOYEE BENEFIT PLANS

SPLIT DOLLAR LIFE INSURANCE AGREEMENTS. In December 1995, the Company
entered into "split dollar" life insurance agreements, which were amended on May
30, 1996 in conjunction with the acquisition of control of the Company by LLC
(the "Split Dollar Agreements"), with Messrs. Schwarz, Winstel, Turvy and
another employee of the Company (the "Insureds") pursuant to which the Company
purchased, and currently pays the premiums on, and the income tax gross-up at a
40.0% tax rate for, term life insurance policies in the face amounts of
$1,550,000, $2,300,000, $1,600,000 and $1,050,000, respectively. While the
Company is the owner of the policies, the Split Dollar Agreements state that the
beneficiaries of the Insureds will be entitled to receive the face value of the
policies upon the death of the Insureds, less the policies' cash value, which,
at December 31, 1997, approximated $194,554, $134,082, $172,328 and $137,056,
respectively. The Insureds have the right to purchase the policies from the
Company when they reach age 65 for their then cash surrender values. (Mr.
Schwarz, pursuant to his Severance Agreement, purchased his policy on January
23, 1998, for its cash value of $195,928). The cost to the Company for the
premiums for fiscal year 1997 was $40,000 for Mr. Schwarz, $30,000 for Mr.
Winstel, $30,000 for Mr. Turvy and $30,000 for the other employee. The Split
Dollar Agreements will terminate during the Insureds' lifetimes upon: (i) the
total cessation of the Company's business, (ii) the bankruptcy, receivership or
dissolution of the Company, or (iii) written notice by the Insureds at any time.

EMPLOYEE BENEFIT PLANS. The Company has a 401(k) plan (the "401(k) Plan")
for all employees, age 21 or older, with one year of service. The 401(k) Plan is
a contributory defined contribution plan which is intended to qualify under
Section 401(k) of the Code. Participants may contribute to the 401(k) Plan by
salary reduction up to 20.0% of annual compensation for the year. The Company
may, in its discretion, determine each year to make a matching contribution out
of current or accumulated pre-tax profit equal to up to 50.0% of the amount
deferred by the employee, with a maximum contribution of 1.5% of the employee's
compensation. An employee's contributions to the 401(k) Plan vest immediately
while all employer matching contributions are vested after three years for
employees whose employment began in 1998 or thereafter. For all employees
employed prior to January 1, 1998, both the employee and employer contributions
vest immediately. Contributions by the Company to the 401(k) Plan were $93,452
for the year ended December 31, 1997.

43
<PAGE>
All Company employees (excluding officers, sales personnel of the Company
and employees of the Company's subsidiaries) who have been employed for the
calendar year and through the date of distribution (March 15 of the following
year) are eligible to participate in the Company's profit sharing plan (the
"Profit Sharing Plan") which sets aside 3.0% of the Company's (not including its
subsidiaries) pre-tax income for distribution under a set formula. The Company
recorded an expense of $46,332 for the Profit Sharing Plan in 1997.

Effective February 24, 1998, the Company's Board of Directors adopted the
1998 Employee Payroll Deduction Stock Purchase Plan (the "Stock Purchase Plan")
pursuant to which employees of the Company have the opportunity to purchase
shares of Common Stock on a regular basis. The purpose of the Stock Purchase
Plan is to contribute to the Company's growth and profitability by allowing
employees to purchase Common Stock which will provide them with an incentive to
work towards the success of the Company. The Stock Purchase Plan provides that
an employee participating in the Stock Purchase Plan (a "Participant") may
authorize the deduction from his or her compensation an amount per semi-monthly
payroll period for the purchase of shares of Common Stock. In connection with
such deductions, the Company, each month, will make a contribution equal to ten
percent (10%) of each Participant's authorized payroll deduction ("Company
Contribution"). Each Participant's account will be credited by an independent
agent of the Company with the number of shares (rounded down to the nearest
whole number) of Common Stock purchased based upon such Participant's authorized
payroll deduction plus the Company Contribution divided by the prevailing market
price of the Common Stock on the last trading day of the month. The Common Stock
purchasable under the Stock Purchase Plan may be shares of authorized but
unissued shares, treasury shares or shares purchased by the Company on the open
market or from private sources for use under the Stock Purchase Plan. The
maximum number of shares which may be issued over the term of the Stock Purchase
Plan is 450,000, which number is subject to the anti-dilution provisions of the
Stock Purchase Plan.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The Compensation Committee of the Company's Board of Directors reviews the
compensation and benefits for the Company's employees and recommends to the
Board adjustments in such compensation. During fiscal year 1997, the members of
the Compensation Committee were Messrs. Harry F. Radcliffe (Chairman), Anthony
W. Liberati and Robert G. Hecht.

None of the executive officers of the Company currently serves on the
compensation committee of another entity or on any other committee of the board
of directors of another entity performing similar functions. Except for the
granting of options under the Directors Plan, no transactions effecting the
members of the Compensation Committee, or their affiliates, occurred during
fiscal year 1997.

44
<PAGE>
CERTAIN TRANSACTIONS

RELATED PARTY TRANSACTIONS

LEASE AGREEMENTS. The Company has entered into a lease with Draft
Partnership ("Lessor") for a 30,000 square foot office and warehouse building in
Dayton, Ohio. The general partners of Draft Partnership are James F. Rowland
(owning a 50.0% partnership interest), and Messrs. Schwarz, Winstel and Turvy,
each of whom own a 12.5% partnership interest. The lease is for a term of ten
years commencing on November 1, 1996 for a base monthly rental of $23,799. The
Company is responsible for paying all taxes, public liability insurance but not
fire and property damage insurance, and all utilities on the leased premises.
Provided that the Company is not in default under the lease, it has the option
to renew the term of the lease for two successive terms of five years each,
commencing on the expiration of the initial term. The Lessor has agreed to
maintain the exterior of the building, all structural components and the parking
lot, while the Company has agreed to maintain the interior, including glass,
mechanical, electrical, plumbing, heating and air conditioning, as well as
grounds maintenance. In addition, the Company has indemnified the Lessor against
any claims which may arise out of the Company's occupancy of the leased premises
or any act of the Company or its employees, agents, invitees or licensees.

In July 1994, MW entered into a ten year lease for its corporate
headquarters, and in August 1996, MW entered into a five and one half year lease
for its southern California offices, both of which were with general
partnerships consisting of Messrs. Gilson, Pereira and Goodman, the former
owners of MW. The leases require monthly rental payments of $15,000 and $17,000,
respectively. Beginning in year 1999 for the corporate headquarters lease and
October 1997 for the southern California office space lease, annual rent
increases are scheduled based on the consumer price index. MW is responsible for
the payment of all property expenses, insurance and taxes under both lease
agreements.

Management of the Company believes that the terms and conditions of such
leases are no less favorable than those that could be obtained from
non-affiliated third parties in the respective local real estate markets for
similar office/warehouse structures and the Company believes that the rental and
other payments under such leases are at or below current comparable rates in the
respective local markets.

In fiscal year 1997, the Company purchased inventory in an amount equal to
$237,000 from Cranel, Inc., Columbus, Ohio, a computer supply wholesaler. The
brother of John C. Huffman, III, Vice President--National Sales Manager of the
Company, is a sales representative for Cranel, Inc. The purchase price for the
inventory was determined through arm's length negotiations. Management believes
that the terms of the purchases were at least as favorable to the Company as
could have been obtained in an arm's length transaction with an unaffiliated
third party.

PRIOR TRANSACTIONS. In connection with the acquisition of control of the
Company in May 1996, LLC purchased 70.0% of the issued and outstanding shares of
voting and non-voting common stock of the Company for $8.0 million in cash and
notes (which notes were paid in November 1996) or $3.19 per share. Messrs.
Liberati, Hecht, Radcliffe, Peppel, and two employees of DDP and the FBR Fund
(of which an affiliate of FBR serves as general partner and of which principals
and employees of FBR own limited partnership interests) and a partnership
composed of certain members of Elias, Matz, Tiernan & Herrick L.L.P., special
counsel to the Company) were members of LLC. The stockholders of the Company who
sold shares to LLC included Messrs. Schwarz, Winstel, Turvy, Huffman and a
family limited partnership affiliated with Mr. Schwarz.

LIMITATIONS ON LIABILITY AND INDEMNIFICATION MATTERS. The Company has
adopted provisions in its Articles that eliminate to the fullest extent
permissible under Ohio law the liability of its directors to the Company or its
stockholders for monetary damages except to the extent that it is proved by
clear and convincing evidence that the director took or failed to take action,
and that such action or failure to act involved an act or omission undertaken
with the deliberate intent to cause injury to the Company or was undertaken with
reckless disregard for the best interests of the Company. This limitation of
liability

45
<PAGE>
provision is designed to ensure that the ability of the Company's directors to
exercise their best business judgment in managing the Company's affairs, subject
to their continuing fiduciary duties to the Company and its stockholders, is not
unreasonably impeded by exposure to potentially high personal costs or other
uncertainties of litigation.

The Articles also provide that the Company shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, because such person is or was a director, officer, employee or
agent of the Company. Such indemnification is furnished to the full extent
provided by law against expenses (including attorneys' fees), judgments, fines,
excise taxes and amounts paid in settlement actually and reasonably incurred in
connection with such action, suit or proceeding; if such person acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Company, and with respect to a criminal action, if he had no
reasonable cause to believe his conduct was unlawful. The indemnification
provisions also permit the Company to pay reasonable expenses in advance of the
final disposition of any action, suit or proceeding as authorized by the
Company's Board of Directors, provided that the indemnified person provides an
undertaking to repay the Company if it is ultimately proved by clear and
convincing evidence in court that his action or failure to act involved an act
or omission undertaken with the deliberate intent to cause injury to the Company
or undertaken with reckless disregard for the best interests of the Company and
to reasonably cooperate with the Company concerning the action, suit or
proceeding. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, it is the published opinion of
the Commission that such indemnification is against public policy as expressed
in the Securities Act and is therefore unenforceable. At the present time, there
is no pending litigation or proceedings involving a director, officer, employee
or other agent of the Company in which indemnification would be required or
permitted. The Company is not presently aware of any other threatened litigation
or proceeding which may result in a claim for such indemnification.

The rights of indemnification provided in the Company's Articles are not
exclusive of any other rights which may be available under the Articles or Code
of Regulations of the Company, any insurance or other agreement, by vote of
stockholders or disinterested directors or otherwise. The Company maintains
director and officer liability insurance coverage.

46
<PAGE>
PRINCIPAL STOCKHOLDERS

The following table sets forth, as of June 2, 1998, certain information as
to the Common Stock beneficially owned by (i) each person or entity, including
any "group" as that term is used in Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), who or which was known to the
Company to be the beneficial owner of more than 5.0% of the issued and
outstanding Common Stock, (ii) the directors of the Company, (iii) the President
and the three most highly compensated executive officers of the Company (other
than the President), and (iv) all directors and executive officers of the
Company as a group.

<TABLE>
<CAPTION>
SHARES
NAME OF BENEFICIAL BENEFICIALLY PERCENT OF PERCENT OF COMMON
OWNER OR NUMBER OF OWNED AS OF COMMON STOCK STOCK
PERSONS IN GROUP JUNE 2, 1998(1) BEFORE OFFERING AFTER OFFERING(2)
- ---------------------------------------------------------- ----------------- ---------------- --------------------
<S> <C> <C> <C>
Value Partners, Ltd.(3)................................... 1,225,690 14.88% 11.99%

Anthony W. Liberati(4)(5)................................. 244,345 2.97 2.39

Albert L. Schwarz(6)...................................... 64,650 0.78 0.63

Robert G. Hecht(4)(7)..................................... 247,345 3.00 2.42

Harry F. Radcliffe(4)(8).................................. 244,345 2.97 2.39

Thomas C. Winstel(4)(9)................................... 298,590 3.62 2.92

Michael E. Peppel(4)(10).................................. 282,531 3.43 2.76

John C. Huffman, III(4)(14)............................... 30,937 0.38 0.30

H. Clark Gilson as Trustee of the Gilson Trust(11)........ 440,851 5.35 4.31

Ruy J. Pereira as Trustee of the Pereira Trust(11)........ 440,851 5.35 4.31

Larry R. Goodman as Trustee of the Goodman Trust(11)...... 440,851 5.35 4.31

The Schwarz Family Limited Partnership(12)................ 225,000 2.77 2.20

All directors and executive officers as a group
(9 persons)(13)......................................... 1,518,718 18.44% 14.85%
</TABLE>

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

(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from June 2, 1998, upon the exercise
of options or warrants. Each beneficial owner's percentage ownership is
determined by assuming that options or warrants that are held by such
person (but not those held by any other person) and that are exercisable
within 60 days from June 2, 1998 have been exercised. Unless otherwise
noted, the Company believes that all persons named in the table have sole
voting and dispositive power with respect to all shares of Common Stock
beneficially owned by them.

(2) Assumes that the persons listed in the table do not purchase any shares of
Common Stock in the Offering and that the Underwriters do not exercise the
over-allotment option.

(3) The business address for Value Partners, Ltd. is 2200 Ross Avenue, Suite
4660 West, Dallas, Texas 75201. Includes 43,803 shares owned by the general
partner of the general partner of Value Partners, Ltd.

(4) This person's business address is 4750 Hempstead Station Drive, Dayton,
Ohio 45429.

(5) Includes options to purchase 15,000 shares of Company Common Stock, which
are immediately exercisable but does not include options to purchase 7,500
shares of Company Common Stock which will become exercisable on the date of
the 1999 Annual Meeting in accordance with the Directors Plan. Mr. Liberati
is the Manager-- President and Chief Executive Officer of LLC and, as such,
may be deemed to have the power to vote or direct the voting of, and to
dispose and direct the disposition of, the shares of Company Common Stock
owned by LLC. The number of shares set forth in the table does not include
the 388,519 shares of Common Stock owned by LLC; but if included, Mr.
Liberati would be deemed to be the beneficial owner of 632,864, or 7.68%,
of the issued and outstanding Common Stock as of June 2, 1998.

(FOOTNOTES CONTINUED ON FOLLOWING PAGE)

47
<PAGE>
(CONTINUED FROM PRIOR PAGE)

(6) Does not include the shares owned by the Schwarz Family Limited
Partnership. The general partner of the Schwarz Family Partnership is the
Albert L. Schwarz Family Trust, of which Mr. Schwarz is the sole trustee
and members of his immediate family are the beneficiaries. See footnote
(12), below. Mr. Schwarz is a limited partner of Schwarz Family Limited
Partnership. Includes options to purchase 38,250 shares of Common Stock
granted to Mr. Schwarz pursuant to the Stock Option Plan, all of which
shares are presently exercisable. Mr. Schwarz resigned as a director and
President of the Company as of January 1, 1998. See "Management--
Employment Contracts."

(7) Includes 3,000 shares held in a custodial account for two minor children
both of whom share the same household with Mr. Hecht, who disclaims
beneficial ownership of such shares. Includes options to purchase 15,000
shares of Company Common Stock which are immediately exercisable but does
not include options to purchase 7,500 shares of Company Common Stock which
will become exercisable on April 29, 1999 in accordance with the Directors
Plan. Mr. Hecht is a member, but not an officer, of LLC. The number of
shares set forth in the table does not include the 388,519 shares of Common
Stock owned by LLC.

(8) Includes 6,750 shares held by Mr. Radcliffe's three children. Also includes
options to purchase 15,000 shares of Company Common Stock which are
immediately exercisable but does not include options to purchase 7,500
shares of Company Common Stock which will become exercisable on the date of
the 1999 Annual Meeting in accordance with the Directors Plan. Mr.
Radcliffe is the Manager--Secretary of LLC and, as such, may be deemed to
have the power to vote or direct the voting of, and to dispose and direct
the disposition of, the shares of the Common Stock owned by LLC. The number
of shares set forth in the table does not include the 388,519 shares of
Common Stock by LLC; but if included, Mr. Radcliffe would be deemed to be
the beneficial owner of 632,864, or 7.68%, of the issued and outstanding
Common Stock as of June 2, 1998.

(9) Does not include options to purchase 15,000 shares of Common Stock granted
to Mr. Winstel pursuant to the Stock Option Plan as of November 15, 1996,
of which 7,500 shares become exercisable on November 15, 1998 and 1999.
Includes options to purchase 7,500 shares of Company Common Stock which
became exercisable on November 15, 1997 pursuant to the Stock Option Plan.

(10) Includes 4,500 shares held as custodian for Mr. Peppel's two minor
children. Does not include options to purchase 45,000 shares of Common
Stock granted to Mr. Peppel pursuant to the Stock Option Plan as of
November 15, 1996, of which 22,500 shares become exercisable on November
15, 1998 and 1999 or options to purchase 70,500 shares granted to Mr.
Peppel pursuant to the Stock Option Plan as of January 15, 1998,
exercisable in three equal annual installments beginning December 31, 1998.
Includes options to purchase 22,500 shares of Common Stock which became
exercisable on November 15, 1997 pursuant to the Stock Option Plan. Mr.
Peppel is the Manager-Treasurer of LLC and, as such, may be deemed to have
the power to vote or direct the voting of, and to dispose or direct the
disposition of, the shares of Company Common Stock owned by LLC. The number
of shares set forth in the table does not include the 388,519 shares of
Common Stock owned by LLC; but if included, Mr. Peppel would be deemed to
be the beneficial owner of 671,050, or 8.15%, of the issued and outstanding
Common Stock as of June 2, 1998.

(11) The business address for the Gilson Trust, the Pereira Trust and the
Goodman Trust is 921 Parker Street, Berkeley, California 94710.

(12) Does not include shares of Common Stock owned individually by Albert L.
Schwarz, who is the trustee of the Schwarz Family Trust, an inter vivos
revocable Ohio trust, which is the general partner of the Schwarz Family
Limited Partnership, an Ohio limited partnership. The address for the
Schwarz Family Limited Partnership is 453 Rolling Timber Trail, Kettering,
Ohio 45429.

(13) Does not include the 388,519 shares of Common Stock owned by LLC.

(14) Does not include options to purchase 4,500 shares of Common Stock granted
to Mr. Huffman pursuant to the 1996 Stock Option Plan in January 1998,
which become exercisable in January 1999.

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<PAGE>
DESCRIPTION OF CAPITAL STOCK

GENERAL

The Company is authorized to issue 30,000,000 shares of Common Stock, no par
value per share, and 5,000,000 shares of Preferred Stock, no par value per
share. As of June 2, 1998, there were 8,123,964 shares of Common Stock
outstanding and no shares of Preferred Stock outstanding.

The following summary description of the Company's capital stock does not
purport to be complete and is subject to, and qualified in its entirety by, the
description of the Company's capital stock contained in the Company's Articles,
a copy of which has been filed with the Commission. Reference is made to the
Articles for a detailed description of the provisions summarized below.

COMMON STOCK

Subject to the prior rights of the holders of any shares of Preferred Stock
that may be outstanding, the Company may pay dividends on the Common Stock as
declared from time to time by the Board of Directors out of funds legally
available therefor. The holders of Common Stock will be entitled to receive and
share equally in such dividends as may be declared by the Board of Directors.
Except as provided in any resolution or resolutions adopted by the Board of
Directors establishing any series of Preferred Stock, the holders of Common
Stock possess exclusive voting rights in the Company. Each holder of shares of
Common Stock is entitled to one vote for each share held on all matters voted
upon by stockholders. No holder of the capital stock of the Company shall be
permitted to cumulate his votes in the election of directors. Subject to the
prior rights of the holders of any shares of Preferred Stock that may be
outstanding, in the event of any liquidation, dissolution or winding up of the
Company, whether voluntary or involuntary, the holders of the Common Stock would
generally be entitled to receive pro rata, after payment of all debts and
liabilities of the Company, all remaining assets of the Company available for
distribution. Holders of the Common Stock do not have any preemptive rights with
respect to any shares of capital stock of the Company. In addition, the Common
Stock is not subject to any redemption provisions.

PREFERRED STOCK

The Board of Directors has the authority to issue the Preferred Stock in one
or more series and to fix the price, rights, preferences, privileges and
restrictions thereof, including dividend rights, dividend rates, conversion
rights, voting rights, terms of redemption, redemption prices, liquidation
preferences and the number of shares constituting a series or the designation of
such series, without any further vote or action by the Company's stockholders.
The Preferred Stock may be issued in distinctly designated series, may be
convertible into Common Stock and may rank prior to the Common Stock as to
dividend rights, liquidation preferences, or both, and may have full or limited
voting rights. Accordingly, the issuance of Preferred Stock could adversely
affect the voting and other rights of holders of Common Stock.

The authorized but unissued shares of Preferred Stock and the authorized but
unissued and unreserved shares of Common Stock are available for issuance in
future mergers or acquisitions, in a future underwritten public offering or
private placement or for other general corporate purposes. Except as otherwise
required to approve a transaction in which the additional authorized shares of
Preferred Stock would be issued or as may be required by the National
Association of Securities Dealers, Inc. (the "NASD") to maintain the quotation
of the Common Stock on the Nasdaq National Market, no stockholder approval would
be required for the issuance of these shares. The issuance of Common or
Preferred Stock, while providing desirable flexibility in connection with
possible acquisitions and other corporate purposes, could have the effect of
delaying, deferring or preventing a change in control of the Company without
further action by the stockholders and may adversely affect the market price of,
and the voting and other rights of, the holders of Common Stock. Except for the
Offering, and in connection with future acquisitions of computer and office
automation supply and projection presentation products companies, the Company
has no current plans to issue any shares of Common or Preferred Stock.

TRANSFER AGENT

The transfer agent for the Common Stock is the Registrar and Transfer
Company, Cranford, New Jersey.

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RESTRICTIONS ON ACQUISITION OF THE COMPANY

AMENDED AND RESTATED ARTICLES OF INCORPORATION, CODE OF REGULATIONS AND OTHER
PROVISIONS

GENERAL. The following discussion is a general summary of certain
provisions of the Articles and Code of Regulations relating to nominations and
stockholder proposals, special meetings of stockholders, business combinations
and amendments to the Articles and Code of Regulations, which may be deemed to
have an anti-takeover effect. The following description of certain of the
provisions of the Articles and Code of Regulations of the Company is necessarily
general and reference should be made in each case to such Articles and Code of
Regulations, each of which is set forth as an exhibit to the Company's
Registration Statement filed with the Commission. See "Additional Information."
Capitalized terms not otherwise defined shall have the meanings set forth in the
Articles and Code of Regulations.

NOMINATIONS AND STOCKHOLDER PROPOSALS. The Articles govern nominations for
election to the Board of Directors, and require that all nominations for
election to the Board of Directors, other than those made by the Board, be made
by a stockholder who has complied with the notice provisions in that section.
The Articles further provide that only such business as shall have been properly
brought before an annual meeting of stockholders shall be conducted at the
annual meeting. Business may be brought before the meeting by or at the
direction of the Board of Directors or otherwise must be properly brought before
the meeting by a stockholder. Each such notice must be reviewed by the Company
by a date certain and must include specified matters set forth in the Articles,
including information relating to the proposal or the nominee or nominees and to
the stockholder who has made the nomination or proposal and any stockholder
known to be supporting such nomination or proposal. These procedures will
provide incumbent directors advance notice of a dissident slate of nominees for
director or of a business proposal which may not be favored by the Board, and
will make it easier for the Board to solicit proxies resisting such nominees or
business proposal. These procedures may make it easier for the incumbent
directors to retain their status as directors or to defeat a stockholder
proposal, even when certain stockholders view the dissident nominations or
business proposal as in the best interests of the Company or its stockholders.
This provision may be advantageous to incumbent management and may discourage
takeover attempts.

SPECIAL MEETINGS OF STOCKHOLDERS. The Articles also provide that special
meetings of the Company's stockholders may only be called by the Chairman of the
Board, the President or a majority of the Whole Board of Directors and a
majority of the Continuing Directors (as defined), or by holders of not less
than 50.0% of all votes entitled to be cast on any issue proposed to be
considered at such special meeting. The provisions in the Articles accordingly
effectively require a majority vote of the stockholders or enable the Chairman
of the Board, the President or a majority of the Whole Board of Directors and a
majority of the Continuing Directors to determine if it is appropriate for the
Company to incur the expense of a special meeting in order to present a proposal
to stockholders.

BUSINESS COMBINATIONS. The Articles govern any proposed "Business
Combination" (defined generally to include certain sales, purchases, exchanges,
leases, transfers, dispositions or acquisitions of assets, mergers or
consolidations, or certain reclassifications of securities of the Company)
between the Company, on the one hand, and a Related Person, on the other hand. A
"Related Person" is defined generally to include any person, partnership,
corporation, group or other entity (other than the Company or LLC) which is the
Beneficial Owner (as defined) of 10.0% or more of the shares of the Company
entitled to vote ("Voting Shares") generally in an election of directors (i.e.,
control). If certain specified conditions set forth in the Articles are not met,
the Company may not become a party to any Business Combination without the prior
affirmative vote at a meeting of the Company's stockholders by the holders of at
least 80.0% of the Voting Shares, voting separately as a class, and by an
Independent Majority of Stockholders, which is defined to mean the holders of a
majority of the outstanding Voting Shares that are not Beneficially Owned (as
defined), directly or indirectly, by a Related Person. If such approval were
obtained, the specified conditions would not have to be met. Such conditions
also would not have to be

50
<PAGE>
met if the Board of Directors approved the Business Combination at times and by
votes specified in the Articles.

These provisions are intended to provide minimum safeguards for stockholders
who do not accept a takeover attempt and continue to hold their shares after the
attempt succeeds and the control of the Company is acquired by a Related Person.
The requirement of an 80.0% stockholder vote probably means that a Business
Combination which fails to meet the minimum price and other conditions might not
be accomplished against the opposition of the incumbent Board of Directors,
members of which, along with the executive officers of the Company and officers
of subsidiaries of the Company, will beneficially own 4,571,212 shares or 44.2%
of the Common Stock after the Offering (or 42.9%, if the Underwriters' over-
allotment option is exercised in full), which includes shares of Common Stock
which may be immediately acquired upon the vesting of outstanding stock options
but does not include shares owned beneficially by LLC. See "Principal
Stockholders."

The provisions would not restrict another company which merely desired to
exercise control over the Company and did not intend to effect a subsequent
Business Combination. Moreover, these provisions may not apply to an attempted
combination with a person not a Related Person. On the other hand, if another
company obtaining control over the Company were not willing to meet the price
and other conditions of the Articles, the holders of just over one-fifth of the
outstanding Voting Shares could block a Business Combination supported by the
remaining stockholders. The result is that Business Combinations favored by a
majority of stockholders might not be approved. This provision might also
discourage a tender offer for the Company's stock because of the resulting need
either to observe the minimum price requirements or to obtain an 80.0%
stockholder vote as a precondition to any subsequent Business Combination. This
might have the effect of preventing temporary fluctuations in the market price
of the stock of the Company which could result from actual or rumored takeover
attempts.

AMENDMENT OF ARTICLES AND CODE OF REGULATIONS. The Company's Articles
provide that any amendment of the Articles must be first approved by a majority
of the Board of Directors and thereafter by the holders of two-thirds of the
shares of the Company entitled to vote in an election of directors, but the
approval of 75.0% of the shares of the Company entitled to vote in an election
of directors is required for any amendment relating to pre-emptive rights,
directors, indemnification, meetings of stockholders, and amendments to the
Articles. In addition, the Company's Articles further provide that the
provisions relating to Business Combinations may not be changed, amended or
repealed without the affirmative vote of the holders of at least 80.0% of the
Voting Shares and by an Independent Majority of Stockholders (as such terms are
defined). However, any such change, amendment or repeal to the provisions
relating to Business Combinations which is approved by two-thirds of the Whole
Board of Directors and a majority of the Continuing Directors, as defined, is
not subject to the 80.0% approval requirements.

The Articles also state that the Code of Regulations of the Company may be
adopted, altered, amended or repealed by the affirmative vote of a majority of
the stockholders of the Company at any regular or special meeting of the
stockholders called for that purpose.

OHIO GENERAL CORPORATION LAW. The General Corporation Law of the State of
Ohio, the state in which the Company is incorporated and maintains its principal
executive office, contains certain provisions that may have the effect of
delaying, deterring or preventing a change in control of the Company. All
information set forth below regarding the OGCL is necessarily general in nature
and reference should be made to the OGCL for more specific, detailed
information.

CONTROL SHARE ACQUISITION. Because the Articles are silent on this matter,
the OGCL regarding stockholder review of control share acquisitions will apply
to the Company. A "control share acquisition" is defined as the acquisition,
directly or indirectly, by any person of shares of an Ohio corporation having
fifty or more stockholders (an "Ohio Public Company") that, when added to all
other shares of the corporation in respect of which such person may exercise or
direct the exercise of voting power, would

51
<PAGE>
entitle such person, immediately after such acquisition, directly or indirectly,
alone or with others, to exercise or direct the exercise of the voting power of
the corporation in the election of directors within any of the following ranges
of voting power: (i) one fifth or more, but less than one third; (ii) one third
or more, but less than a majority; or (iii) a majority or more. No person may
make a control share acquisition unless: (i) the stockholders of the corporation
by a majority vote (excluding the shares held by the person proposing the
control share acquisition), at a special meeting held for such purpose, vote to
authorize such acquisition, and (ii) such acquisition is consummated no later
than 360 days following such stockholder authorization. The special meeting of
stockholders must be preceded by the filing by the person proposing the control
share acquisition of a statement which details the proposed acquisition and
notice of the special meeting.

CONTROL BIDS. No person may make a control bid for the Common Stock of the
Company pursuant to a tender offer or a request or invitation for tenders until
such person has filed with the Ohio Division of Securities (the "Division") and
the Company a control bid information statement. A "control bid" is defined by
the OGCL as the purchase or offer to purchase any equity security of a company
located in Ohio, which has more than 10.0% of its record equity security holders
who are residents of such state, from a resident of Ohio where, after such
purchase, the offeror would own more than 10.0% of any class of the issued and
outstanding equity securities of such issuer. Within three calendar days of the
filing of the control bid information statement, the Division may summarily
suspend the continuation of the control bid if the Division determines that the
information given in the information statement does not provide full disclosure
to offerees of all material information relating to the control bid. A hearing
will be scheduled on such suspension. In addition, no offeror may make a control
bid that is not made to all holders residing in Ohio, or that is not made to
such holders on the same terms as the control bid made to holders residing
outside of the state of Ohio. Further, no offeror may acquire from any resident
of Ohio any equity security within two years following the last acquisition of
any security of the same class pursuant to a control bid by such offeror unless
the resident is afforded, at the time of the later acquisition, a reasonable
opportunity to dispose of the security to the offeror upon substantially the
same terms as those provided in the earlier control bid.

DISGORGEMENT. For the purpose of preventing manipulative practices by a
person who makes a proposal, or publicly discloses the intention or possibility
of making a proposal, to acquire control of the Company, the OGCL states that
any profit in excess of $250,000 realized, directly or indirectly, from the
disposition of any equity securities of the Company by a person who, within 18
months before the disposition, directly or indirectly, alone or in concert with
others, made a proposal, or publicly disclosed the intention or possibility of
making a proposal, to acquire control of the Company, inures to the Company and
is recoverable by the Company by an action brought within two years after the
date of the disposition of such securities.

ANTI-TAKEOVER EFFECTS. The Board of Directors believes that the foregoing
provisions in the Articles of the Company are prudent and, together with
applicable state law, will reduce vulnerability to takeover attempts and certain
other transactions that are not negotiated with and approved by the Board of
Directors of the Company. In the Board of Directors' judgment, the Board of
Directors is in the best position to determine the true value of the Company and
to negotiate more effectively for what may be in the best interests of its
stockholders. Accordingly, the Board of Directors believes that it is in the
best interests of the Company and its current and future stockholders to
encourage potential acquirors to negotiate directly with the Board of Directors
and that these provisions will encourage such negotiations and discourage
hostile takeover attempts. It is also the Board of Directors' view that these
provisions should not discourage persons from proposing a merger or other
transaction at prices reflective of the true value of the Company and where the
transaction is in the best interests of all stockholders.

Despite the Board of Directors' belief as to the benefits to the Company's
stockholders of the foregoing provisions, these provisions also may have the
effect of discouraging a future takeover attempt in

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<PAGE>
which stockholders might receive a substantial premium for their shares over
then current market prices. As a result, stockholders who might desire to
participate in such a transaction may not have an opportunity to do so. The
Board of Directors, however, has concluded that the potential benefits of these
provisions outweigh their possible disadvantages. The Board of Directors of the
Company is not aware of any present effort that might be made to acquire control
of the Company.

SHARES ELIGIBLE FOR FUTURE SALE

The Company's Articles authorizes the issuance of 35,000,000 shares of
capital stock, consisting of 30,000,000 shares of Common Stock and 5,000,000
shares of Preferred Stock. Upon completion of the Offering, there will be
10,223,964 shares of Common Stock outstanding (10,538,964 shares if the
Underwriters' over-allotment option is exercised in full).

The 2,100,000 shares of Common Stock to be sold in the Offering (2,415,000
shares if the Underwriters' over-allotment option is exercised in full) will be
available to the public without restriction or further registration under the
Securities Act, except for shares purchased by affiliates of the Company (in
general, any person who has a control relationship with the Company), which
shares will be subject to the resale limitations of Rule 144 promulgated under
the Securities Act ("Rule 144"). The Company, certain of its affiliates, its
executive officers and directors, and the FBR Fund have agreed not to offer,
sell or contract to sell or otherwise dispose of Common Stock (or Common Stock
underlying vested options) without the prior consent of the Underwriters for a
period of 180 days following the conclusion of the Offering (the "lock-up
period"). See "Underwriting."

In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated) who has beneficially owned shares for at least one
year is entitled to sell, within any three month period, a number of shares
which does not exceed the greater of 1.0% of the then outstanding shares of the
Common Stock or the average weekly trading volume of the Common Stock during the
four calendar weeks preceding the date on which notice of the sale is filed with
the Commission. Sales under Rule 144 may also be subject to certain manner of
sale provisions, notice requirements and the availability of current public
information about the Company. Any person (or persons whose share are
aggregated) who is not deemed to have been an affiliate of the Company at any
time during the three months preceding a sale, and who has beneficially owned
shares within the definition of "restricted securities" under Rule 144 for at
least two years, is entitled to sell such shares under Rule 144(k) without
regard to the volume limitation, manner of sale provisions, public information
requirements or notice requirements.

In connection with the acquisitions of computer supply and projection
presentation products companies in fiscal year 1997 and in 1998 to the date of
this Prospectus, the Company has issued 2,818,483 shares of Common Stock which
are subject to restrictions on resale. Of that amount 2,638,215 shares will not
be subject to such restrictions after October 1, 1998 and the remaining 180,268
shares will not be subject to such restrictions after November 28, 1998. The
Company has agreed to register 1,777,820 of such shares and upon the effective
date of that registration statement, subsequent to the restrictive periods,
those shares will also be freely tradeable. The remaining shares issued in such
acquisitions will be eligible for resale pursuant to the provisions of Rule 144.
In addition, the Company intends to register an additional 2,000,000 shares of
its Common Stock with the Commission in a "shelf" registration under Rule 415 of
the Securities Act for use by the Company as all or a portion of the
consideration to be paid in future acquisitions. It is anticipated that these
shares will be subject to contractual restrictions on resale for approximately
twelve months after their issuance in connection with such acquisitions;
thereafter, such shares will generally be freely tradeable.

At the request of the FBR Fund, the Company intends to file a registration
statement with the Commission in order to register the resale of an aggregate of
278,119 shares of Common Stock by the FBR Fund. At the expiration of the lock-up
period, the FBR Fund may sell all or a portion of the shares included in the
registration statement to the public without restriction, at the discretion of
the FBR Fund.

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<PAGE>
The FBR Fund has informed the Company that it has no present intent to sell the
shares of Common Stock which have been registered.

There are currently outstanding options held by officers and directors of
the Company to purchase 234,300 shares of Common Stock.

In 1998, the Company reserved an additional 750,000 shares of Common Stock
for future option grants.

No prediction can be made as to the effect, if any, that future sales of
shares of Common Stock or availability of such shares for future sale will have
on the market price of the Common Stock prevailing from time to time. Sales of
substantial amounts of Common Stock (including shares issued upon the exercise
of outstanding options), or the perception that such sales could occur, could
adversely affect prevailing market prices for the Common Stock.

54
<PAGE>
UNDERWRITING

Subject to the terms and conditions set forth in the Underwriting Agreement,
the Underwriters named below (the "Underwriters"), through FBR, William Blair &
Company, L.L.C. and Morgan Keegan & Company, Inc., as their representatives (the
"Representatives"), have severally agreed to purchase from the Company the
following respective number of shares of Common Stock at the offering price less
the underwriting discount set forth on the cover page of this Prospectus.

<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
- --------------------------------------------------------------------------- ---------------------
<S> <C>
Friedman, Billings, Ramsey & Co., Inc......................................
William Blair & Company, L.L.C.............................................
Morgan Keegan & Company, Inc...............................................
Total....................................................................
</TABLE>

The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will
purchase all of the shares offered hereby (other than those covered by the
over-allotment option described below), if any of such shares are purchased.

The Company has been advised by the Underwriters that the Underwriters
propose to offer the shares of Common Stock to the public at the offering price
set forth on the cover page of this Prospectus and to certain dealers at such
price less a concession not in excess of $ per share. The Underwriters may
allow, and such dealers may reallow, a concession not in excess of $ per
share to certain other dealers. After the initial offering, the offering price
and other selling terms may be changed by the Representatives. The Company has
agreed to pay the Underwriters an expense allowance equal to 100.0% of the
Underwriters' out-of-pocket expenses in excess of $75,000 up to a maximum of
$75,000, 100.0% of such expenses in excess of $187,500 up to a maximum of
$37,500, and 50.0% of such expenses in excess of $225,000.

The Company has granted to the Underwriters an option, exercisable not later
than 30 days after the date of this Prospectus, to purchase up to 315,000
additional shares of Common Stock at the offering price less the underwriting
discount set forth on the cover page of this Prospectus. To the extent that the
Underwriters exercise such option, each of the Underwriters will have a firm
commitment to purchase approximately the same percentage thereof that the number
of shares of Common Stock to be purchased by it shown in the above table bears
to 315,000, and the Company will be obligated, pursuant to the option, to sell
such shares to the Underwriters. The Underwriters may exercise such option only
to cover over-allotments made in connection with the sale of Common Stock
offered hereby. If purchased, the Underwriters will offer such additional shares
on the same terms as those on which the 2,100,000 shares are being offered.

The Company, its executive officers and directors, certain affiliates of the
Company, and the FBR Fund have agreed not to offer, sell or contract to sell or
otherwise dispose of any shares of Common Stock without the prior consent of the
Underwriters for a period of 180 days following the conclusion of the Offering.

The Company has agreed to indemnify the Underwriters against certain
liabilities including liabilities under the Securities Act.

In connection with the Offering, the Underwriters may engage in transactions
that stabilize, maintain or otherwise affect the market price of the Common
Stock. Such transactions may include stabilization transactions pursuant to
which the Representatives may bid for or purchase Common Stock for the purpose
of stabilizing its market price. The Underwriters also may create a short
position for the account of the Underwriters by selling more Common Stock in
connection with the Offering than they are committed to purchase from the
Company and in such case the Representatives may purchase Common Stock in the
open market following completion of the Offering to cover all or a portion of
such short

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<PAGE>
position. The Underwriters may also cover all or a portion of such short
position by exercising the Underwriters' over-allotment option referred to
above. In addition, the Representatives on behalf of the Underwriters, may
impose "penalty bids" under contractual arrangements with the Underwriters
whereby they may reclaim from an Underwriter (or dealer participating in the
Offering), for the account of other Underwriters, the selling concession with
respect to Common Stock that is distributed in the Offering but subsequently
purchased for the account of the Underwriters in the open market. Any of the
transactions described in this paragraph may result in the maintenance of the
price of the Common Stock at a level above that which might otherwise prevail in
the open market. The imposition of a penalty bid might also affect the price of
the Common Stock to the extent that it could discourage resales of the security.
Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Common Stock. In addition, neither
the Company nor any of the Underwriters makes any representation that the
Underwriters will engage in such transactions or that such transactions, once
commenced, will not be discontinued without notice.

The Underwriters and dealers may engage in passive market making
transactions in the Common Stock in accordance with Rule 103 of Regulation M
promulgated by the Commission. In general, a passive market maker may not bid
for or purchase shares of Common Stock at a price that exceeds the highest
independent bid. Passive market making may stabilize or maintain the market
price of the Common Stock above independent market levels. The Underwriters and
dealers are not required to engage in passive market making and may end passive
market making activities at any time.

The Representatives have informed the Company that the Underwriters do not
intend to confirm sales of the Common Stock offered hereby to any accounts over
which they exercise discretionary authority.

As of June 2, 1998, the FBR Fund, in which an affiliate of FBR serves as
general partner and principals and employees of FBR own limited partnership
interests, was the beneficial owner of 278,119 shares of the Common Stock,
representing 3.4% of all Common Stock issued and outstanding.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company by Elias, Matz, Tiernan & Herrick L.L.P., Washington, D.C. Certain legal
matters will be passed upon for the Underwriters by Jenkens & Gilchrist, P.C.,
Washington, D.C. As of the date of this Prospectus, a general partnership
composed of certain members of Elias, Matz, Tiernan & Herrick L.L.P.
beneficially owned 20.4% of LLC (approximately 79,258 shares of Common Stock)
and certain members of such firm owned approximately 240,540 shares of Company
Common Stock.

INDEPENDENT ACCOUNTANTS

The consolidated financial statements of the Company as of December 31, 1996
and 1997 and for each of the three years in the period ended December 31, 1997,
the financial statements of MW as of October 31, 1996 and September 30, 1997 and
for each of the two years in the period ended October 31, 1996 and for the
eleven month period ended September 30, 1997, the financial statements of TBS as
of January 3, 1997 and September 30, 1997 and for the year ended January 3, 1997
and for the nine months ended September 30, 1997, and the financial statements
of Britco as of April 30, 1997 and for the year then ended, all of which are
included in this Prospectus, have been so included in reliance on the reports of
Price Waterhouse LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting.

56
<PAGE>
AVAILABLE INFORMATION

The Company is subject to the informational requirements of the Exchange
Act, and, accordingly, files reports, proxy statements and other information
with the Commission. Such reports, proxy statements and other information filed
with the Commission are available for inspection and copying at the public
reference facilities maintained by the Commission at Room 1024, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's Regional
Offices located at Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661 and at Seven World Trade Center, New York, New York
10048. Copies of such documents may also be obtained from the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. In addition, copies of such
documents may be obtained through the Commission's Internet address at
http://www.sec.gov. The Common Stock is authorized for quotation on Nasdaq and,
accordingly, such materials and other information can also be inspected at the
offices of the NASD, 1735 K Street, N.W., Washington, D.C. 20006.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-1 (No. 333-53639)(together with any amendments thereto, the "Registration
Statement") under the Securities Act with respect to the securities offered
hereby. This Prospectus, which constitutes a part of the Registration Statement,
omits certain information contained in the Registration Statement as permitted
by the rules and regulations of the Commission. For further information with
respect to the Company and the securities offered hereby, reference is made to
the Registration Statement and the exhibits and financial statements, notes and
schedules filed as a part thereof, which may be inspected and copied at the
public reference facilities of the Commission at the address as set forth above.
Statements contained in this Prospectus concerning the contents of any documents
referred to herein are not necessarily complete and, in each instance are
qualified in all respects by reference to the copy of such document filed as an
exhibit to the Registration Statement.

57
<PAGE>
INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
MIAMI COMPUTER SUPPLY CORPORATION
<S> <C>
Report of Independent Accountants.................................................... F-2
Consolidated Balance Sheet as of December 31, 1996 and 1997 and March 31, 1998
(unaudited)........................................................................ F-3
Consolidated Statement of Operations for the years ended December 31, 1995, 1996 and
1997 and the three months ended March 31, 1997 and 1998 (unaudited)................ F-4
Consolidated Statement of Cash Flows for the years ended December 31, 1995, 1996 and
1997 and the three months ended March 31, 1997 and 1998 (unaudited)................ F-5
Notes to Consolidated Financial Statements........................................... F-6

MINNESOTA WESTERN/CREATIVE OFFICE PRODUCTS, INC.
Report of Independent Accountants.................................................... F-20
Balance Sheet as of October 31, 1996 and September 30, 1997.......................... F-21
Statement of Income and Retained Earnings for the years ended October 31, 1995 and
1996 and the eleven months ended September 30, 1997................................ F-22
Statement of Cash Flows for the years ended October 31, 1995 and 1996 and the eleven
months ended September 30, 1997.................................................... F-23
Notes to Financial Statements........................................................ F-24

TBS PRINTWARE CORPORATION
Report of Independent Accountants.................................................... F-30
Balance Sheet as of January 3, 1997 and September 30, 1997........................... F-31
Statement of Operations for the year ended January 3, 1997 and the nine months ended
September 30, 1996 (unaudited) and 1997............................................ F-32
Statement of Changes in Shareholders' Equity for the year ended January 3, 1997 and
the nine months ended September 30, 1997........................................... F-33
Statement of Cash Flows for the year ended January 3, 1997 and the nine months ended
September 30, 1996 (unaudited) and 1997............................................ F-34
Notes to Financial Statements........................................................ F-35

BRITCO, INC.
Report of Independent Accountants.................................................... F-41
Balance Sheet at April 30, 1997 and July 31, 1997 (unaudited)........................ F-42
Statement of Income and Retained Earnings for the year ended April 30, 1997 and the
three months ended July 31, 1996 and 1997 (unaudited).............................. F-43
Statement of Cash Flows for the year ended April 30, 1997 and the three months ended
July 31, 1996 and 1997 (unaudited)................................................. F-44
Notes to Financial Statements........................................................ F-45
</TABLE>

F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To The Board Of Directors And Stockholders Of Miami Computer Supply Corporation

In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of operations and cash flows present fairly, in all
material respects, the financial position of Miami Computer Supply Corporation
and its subsidiaries at December 31, 1996 and 1997 and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1997 in conformity with generally accepted accounting principles.
These 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 of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

PRICE WATERHOUSE LLP

Cincinnati, Ohio
February 23, 1998
except for Note 2
- --Earnings per share,
which is as of
April 24, 1998.

F-2
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
MARCH 31,
1996 1997 1998
---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................ $ 780,875 $1,662,420 $ 829,693
Accounts receivable (Note 4)............................. 8,636,657 21,490,282 30,131,123
Inventories.............................................. 5,894,838 9,111,620 17,658,480
Prepaid expenses......................................... 396,450 314,060 592,910
Deferred income taxes (Note 8)........................... 35,496 275,206 244,159
---------- ---------- ----------
Total current assets............................... 15,744,316 32,853,588 49,456,365
Property and equipment--net of accumulated depreciation
(Note 6)................................................. 1,016,164 1,885,131 4,102,168
Other assets:
Deposits................................................. 28,302 44,442 222,527
Cash surrender value officers' life insurance............ 571,986 729,303 535,721
Intangible assets--net of accumulated amortization of
$422,960, $650,387 and $878,837 at December 31, 1996,
December 31, 1997 and March 31, 1998 (Note 3).......... 414,440 14,408,481 38,362,152
---------- ---------- ----------
Total assets............................................... $17,775,208 $49,920,945 $92,678,933
---------- ---------- ----------
---------- ---------- ----------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line-of-credit (Note 5).................................. $ -- $8,040,313 $ --
Accounts payable--trade.................................. 4,308,785 11,338,272 13,196,885
Accrued expenses, payroll and income taxes............... 1,188,708 2,440,737 5,055,594
Notes payable relating to business combinations (Note
3)..................................................... -- 2,791,000 --
Current portion of long-term debt (Note 5)............... 35,567 55,467 302,823
---------- ---------- ----------
Total current liabilities.......................... 5,533,060 24,665,789 18,555,302
Long-term debt (Note 5).................................... 64,696 112,615 33,757,942
Other long-term liabilities................................ 43,160 -- --
Deferred income taxes (Note 8)............................. 61,249 111,644 54,987
---------- ---------- ----------
Total liabilities.................................. 5,702,165 24,890,048 52,368,231
---------- ---------- ----------
Commitments and contingencies (Note 14).................... -- -- --
Stockholders' equity (Note 10):
Preferred stock, no par value, 5,000,000 shares
authorized, none outstanding........................... -- -- --
Common stock, no par value; 30,000,000 shares authorized,
5,307,000, 6,621,164 and 8,123,964 shares outstanding
at December 31, 1996, December 31, 1997 and
March 31, 1998......................................... -- -- --
Additional paid-in capital............................... 8,349,249 19,095,494 33,289,370
Retained earnings........................................ 3,738,794 5,950,403 7,036,332
---------- ---------- ----------
12,088,043 25,045,897 40,325,702
Less--Treasury stock, at cost (shares 1800).............. 15,000 15,000 15,000
---------- ---------- ----------
Total stockholders' equity......................... 12,073,043 25,030,897 40,310,702
---------- ---------- ----------
Total liabilities and stockholders' equity................. $17,775,208 $49,920,945 $92,678,933
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-3
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

CONSOLIDATED STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------- ----------------------
1995 1996 1997 1997 1998
---------- ---------- ----------- ---------- ----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales...................... $43,320,922 $63,427,728 $107,486,652 $20,226,020 $55,164,405
Cost of sales.................. 34,641,904 52,061,042 88,190,214 16,745,304 42,653,199
---------- ---------- ----------- ---------- ----------
Gross profit................. 8,679,018 11,366,686 19,296,438 3,480,716 12,511,206
Selling, general and
administrative expenses...... 7,124,661 8,891,122 15,440,937 2,717,073 10,263,217
Non-cash compensation
expense...................... -- 279,726 -- -- --
---------- ---------- ----------- ---------- ----------
Operating income............... 1,554,357 2,195,838 3,855,501 763,643 2,247,989
Interest expense............... (274,077) (312,327) (180,373) (871) (426,280)
Other income (expense)......... 21,722 (10,587) 43,501 12,121 124,220
---------- ---------- ----------- ---------- ----------
Income before income taxes..... 1,302,002 1,872,924 3,718,629 774,893 1,945,929
Provision for income taxes
(Note 8)..................... 509,129 755,693 1,507,020 313,832 860,000
---------- ---------- ----------- ---------- ----------
Net income................... $ 792,873 $1,117,231 $ 2,211,609 $ 461,061 $1,085,929
---------- ---------- ----------- ---------- ----------
---------- ---------- ----------- ---------- ----------
Earnings per share of common
stock (basic and diluted).... $ 0.22 $ 0.29 $ 0.39 $ 0.09 $ 0.14
---------- ---------- ----------- ---------- ----------
---------- ---------- ----------- ---------- ----------
Weighted average number of
common shares
outstanding--basic........... 3,582,000 3,798,599 5,671,833 5,307,000 7,779,377
---------- ---------- ----------- ---------- ----------
---------- ---------- ----------- ---------- ----------
Weighted average number of
common shares
outstanding--diluted......... 3,582,000 3,814,139 5,722,440 5,341,850 7,941,116
---------- ---------- ----------- ---------- ----------
---------- ---------- ----------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-4
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
YEAR ENDED DECEMBER 31, 31,
------------------------------------- ------------------------
1995 1996 1997 1997 1998
----------- ----------- ----------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income.................................. $ 792,873 $ 1,117,231 $ 2,211,609 $ 461,061 $ 1,085,929
Adjustments to reconcile net income to cash
provided by (used in) operating
activities:
Depreciation and amortization............. 292,211 328,500 544,602 107,481 537,425
Non-cash compensation..................... -- 279,726 -- -- --
Non-cash compensation to former
Diversified Data Products, Inc.
owners.................................. -- 58,694 -- -- --
Deferred income taxes..................... (6,876) 32,118 (21,815) -- --
Changes in assets and liabilities net of
effects of business combinations
Accounts receivable................... (146,935) (2,637,195) (4,350,759) (709,207) (2,930,577)
Inventories........................... (611,499) (1,594,372) (228,215) (561,455) (1,278,746)
Prepaid expenses, other assets and
deposits............................ (2,147) (272,889) 221,434 259,462 (240,970)
Accounts payable--trade............... (371,359) 1,341,503 1,177,561 (910,358) (2,500,178)
Accrued expenses, payroll and income
taxes............................... (63,425) 63,986 157,898 1,588 1,313,204
----------- ----------- ----------- ----------- -----------
Cash used in operating activities............. (117,157) (1,282,698) (287,685) (1,351,428) (4,013,913)
----------- ----------- ----------- ----------- -----------
Cash flows from investing activities:
Capital expenditures........................ (228,866) (511,851) (578,981) (59,787) (624,612)
Investment in cash surrender value officers'
life
insurance................................. (160,899) (152,207) (157,317) -- 193,582
Business combinations....................... -- -- (4,284,658) -- (14,364,211)
Cash included in business combinations...... -- 109,467 1,008,349 -- 259,349
----------- ----------- ----------- ----------- -----------
Cash used in investing activities............. (389,765) (554,591) (4,012,607) (59,787) (14,535,892)
----------- ----------- ----------- ----------- -----------
Cash flows from financing activities:
Proceeds from initial public offering....... -- 7,794,298 -- -- --
Borrowings under line-of-credit............. 12,707,419 13,578,915 19,077,975 839,421 25,414,687
Payments under line-of-credit............... (12,108,613) (18,610,382) (11,037,662) -- --
Payment of debt acquired in business
combinations.............................. -- -- (2,883,135) -- (5,256,704)
Payment of notes payable relating to
business
combinations.............................. -- -- -- -- (2,791,000)
Increase (decrease) in long-term debt....... (187,065) (146,567) 24,659 (8,998) 350,095
Other....................................... -- -- -- (30,120) --
----------- ----------- ----------- ----------- -----------
Cash provided by financing activities......... 411,741 2,616,264 5,181,837 800,303 17,717,078
----------- ----------- ----------- ----------- -----------
Net increase (decrease) in cash and cash
equivalents................................. (95,181) 778,975 881,545 (610,912) (832,727)
Cash and cash equivalents--beginning of
year........................................ 97,081 1,900 780,875 780,875 1,662,420
----------- ----------- ----------- ----------- -----------
Cash and cash equivalents--end of year........ $ 1,900 $ 780,875 $ 1,662,420 $ 169,963 $ 829,693
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Supplemental cash flow information:
Interest paid............................... $ 263,846 $ 325,355 $ 208,531 $ 871 $ 426,280
Income taxes paid........................... 578,501 1,006,896 1,485,077 99,257 411,239
Common stock issued in business
combinations.............................. -- -- 10,746,245 -- 14,193,876
Debt issued in business combinations........ -- -- 2,791,000 -- --
</TABLE>

The accompanying notes are an integral part of these consolidated financial
statements.

F-5
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. ORGANIZATION AND OPERATIONS

Miami Computer Supply Corporation (the "Company") sells a wide variety of
computer supplies and presentation products to corporate customers, governmental
agencies, universities, hospitals and, to a lesser extent, computer supply
dealers throughout the United States. Its primary sales products include laser
printer supplies, printer cartridges, ribbons, presentation products and paper.
The Company maintains 62 sales offices throughout the United States and one in
Europe. The Company's sales and operating results in Europe are not material.

Credit risk with respect to trade accounts receivable is generally
diversified due to the large number of entities comprising the Company's
customer base. Management establishes policies with respect to credit risks and
monitors compliance with those policies.

Effective May 30, 1996, Pittsburgh Investment Group LLC ("LLC") acquired 70
percent of the outstanding shares of the Company for $4.0 million in cash and
$4.0 million in promissory notes. Concurrent with this acquisition, LLC also
acquired from third parties 100 percent of the outstanding common stock of
Diversified Data Products, Inc., a Michigan corporation ("DDP") and contributed
its stock in DDP to the Company. As a result, DDP, a computer supply and office
automation distributor, became a wholly-owned subsidiary of the Company on May
30, 1996.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.

CONSOLIDATION

All subsidiaries of the Company are wholly-owned and are included in the
consolidated financial statements. All significant intercompany accounts and
transactions have been eliminated.

REVENUE RECOGNITION

Revenues from the sale of products are recognized upon passage of title to
the customer which generally coincides with shipment.

INVENTORIES

Inventories are stated at the lower of cost or market. Cost is determined
using the weighted average method. Inventories consist primarily of products
held for resale.

FOREIGN CURRENCY TRANSACTIONS

For the Company's subsidiary located in the United Kingdom, the functional
currency is the U.S. dollar. Forward foreign currency contracts are used to
manage currency risks relating to existing assets or liabilities and purchase
commitments denominated in a foreign currency. Gains or losses are recognized at

F-6
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
the time the asset, liability or purchase commitment are closed. Net contract
values are included in receivables or payables as appropriate.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand and on deposit and highly
liquid debt instruments with maturities of three months or less. Cash
equivalents are carried at cost, which approximates fair value.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods were used by the Company in estimating its fair value
disclosures for financial instruments:

CASH AND DEPOSITS, ACCOUNTS RECEIVABLE AND ACCOUNTS PAYABLE--The
carrying amounts reported in the balance sheet approximate fair value.

FOREIGN CURRENCY EXCHANGE CONTRACTS--The fair value of the Company's
foreign exchange contracts is estimated based on quoted market prices of
comparable contracts.

SHORT- AND LONG-TERM DEBT--The carrying amounts of the Company's
borrowings approximate their fair value by virtue of the variable
interest rates associated with these instruments.

PROPERTY, EQUIPMENT AND CAPITAL LEASES

Property, equipment and capital leases are recorded at cost. Depreciation
and amortization are provided using the straight-line method over the estimated
useful lives of the assets. Depreciation and amortization periods are as
follows:

<TABLE>
<CAPTION>
ESTIMATED USEFUL
LIVES
--------------------
<S> <C>
Furniture and fixtures.................................................. 5 to 7 years
Equipment............................................................... 3 to 7 years
Leasehold improvements.................................................. 3 to 5 years
Transportation equipment................................................ 5 years
</TABLE>

The cost of properties retired or otherwise disposed of, together with the
accumulated depreciation provided thereon, is eliminated from the accounts. Any
net gain or loss is recognized in income.

INTANGIBLE ASSETS

The Company assesses impairment of assets on an annual basis using a
discounted cash flow approach. If appropriate, impairment would be recognized
based upon the provisions of Statement of Financial Accounting Standards
("SFAS") No. 121 "Accounting for the Impairment of Long Lived Assets and for
Long Lived Assets to Be Disposed Of."

F-7
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES

Income taxes are recognized during the year in which transactions enter into
the determination of financial statement income. Deferred tax assets and
liabilities are recognized for the future tax consequences of temporary
differences between the book carrying amounts and the tax basis of assets and
liabilities.

INSURANCE

The Company maintains life insurance policies on certain key and former
employees which are recorded at the net cash surrender value. While the Company
is the owner, the agreements state that the beneficiaries of the insureds will
be entitled to receive the face value of the policies upon the death of the
insureds, less the policies' cash value.

EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income by the weighted
average number of common shares outstanding during the period. Diluted earnings
per share is computed by dividing net income by the weighted average number of
common shares outstanding plus all dilutive potential common shares outstanding
during the period. Dilutive common shares are determined using the treasury
stock method. All share and per share data have been restated to reflect a three
for two stock split which became effective on April 24, 1998.

ADVERTISING COSTS

Costs of advertising are expensed as incurred.

NOTE 3. ACQUISITIONS

The Company is engaged in an active acquisition program. During 1997, the
Company acquired six (6) separate entities (Imperial Data Supply Corporation,
Data Associates, Inc., Force 4 D.P. Supplies, Inc., NTI Data Products, Inc.,
Britco, Inc. and TBS Printware Corporation) all in purchase business
combinations. None of the acquired entities, each of which is engaged in
providing computer supply products, were individually significant to the
Company's consolidated financial statements. Earnings of each of the acquired
entities have been recorded by the Company beginning with the respective
acquisition dates. The aggregate purchase price of the acquired entities of
$17,821,903 was comprised of cash, 1,314,164 shares of the Company's common
stock with a fair value of $10,746,245, notes payable due to sellers aggregating
$2,791,000 due in January, 1998, and related out of pocket expenses totaling
$787,158. One acquisition calls for contingent consideration of up to $2,200,000
if certain operating results occur within the thirty-three month period
following the acquisition. The acquisition price has been allocated to the
estimated fair

F-8
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 3. ACQUISITIONS (CONTINUED)
value of the assets acquired and the liabilities assumed, with the residual
being allocated to intangible assets (goodwill) which is being amortized over a
forty year life, as summarized in the following table:

<TABLE>
<CAPTION>
<S> <C>
Cash........................................................................... $ 1,008,349
Accounts receivable............................................................ 8,502,866
Inventories.................................................................... 2,988,567
Deferred income taxes.......................................................... 167,500
Property and equipment......................................................... 657,161
Other assets................................................................... 155,184
Payables and accruals.......................................................... (6,946,057)
Debt........................................................................... (2,883,135)
Goodwill....................................................................... 14,171,468
-------------
Purchase price............................................................. $ 17,821,903
-------------
-------------
</TABLE>

Effective January 1, 1998, the Company completed its acquisition of
Minnesota Western/Creative Office Products, Inc. ("MW") in a purchase business
combination. MW is engaged in designing, selling and distributing audio visual
equipment and supplies. The purchase price totaled $24,664,311 and was comprised
of cash, 1,322,555 shares of the Company's common stock with a fair value of
$12,343,842 and related out of pocket expenses totaling $320,469. The purchase
price was allocated to the estimated fair values of the assets acquired and
liabilities assumed with the residual being allocated to intangible assets
(goodwill) which is being amortized over a forty year life.

The following table illustrates the unaudited pro forma balance sheet of the
Company assuming the MW transaction had occurred on December 31, 1997:

<TABLE>
<CAPTION>
<S> <C>
Cash........................................................................... $ 1,662,570
Accounts receivable............................................................ 26,496,094
Inventories.................................................................... 15,888,297
Other current assets........................................................... 655,577
-------------
Total current assets......................................................... 44,702,538
Property and equipment......................................................... 3,724,524
Intangible and other assets.................................................... 36,684,329
-------------
Total assets................................................................. $ 85,111,391
-------------
-------------

Accounts payable............................................................... $ 14,469,570
Accrued liabilities............................................................ 3,411,309
Other current liabilities...................................................... 16,791,716
-------------
Total current liabilities.................................................... 34,672,595
Long-term debt................................................................. 12,631,944
Other long-term liabilities.................................................... 111,644
-------------
Total liabilities............................................................ 47,416,183
Stockholders' equity........................................................... 37,695,208
-------------
Total liabilities and stockholders' equity..................................... $ 85,111,391
-------------
-------------
</TABLE>

F-9
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 3. ACQUISITIONS (CONTINUED)
Effective May 30, 1996, LLC contributed its stock in DDP to the Company. The
acquisition of DDP by the Company was accounted for using the purchase method of
accounting and accordingly the purchase price has been allocated based upon the
fair value of the assets acquired and liabilities assumed as of May 30, 1996.

In connection with the acquisition of DDP, LLC issued a loan to certain
former stockholders in an amount of $250,000. This amount was subject to
repayment based upon DDP generating specified income levels for the period May
30, 1996 to December 31, 1996. DDP generated such income levels for this period,
and accordingly the loan was forgiven. The value of the assets acquired was
adjusted to reflect this additional consideration.

The purchase price of DDP was allocated as follows:

<TABLE>
<CAPTION>
<S> <C>
Cash............................................................................ $ 109,467
Accounts receivable............................................................. 1,152,626
Inventories..................................................................... 1,327,685
Other assets.................................................................... 79,484
Goodwill........................................................................ 250,000
------------
Purchase price.................................................................. $ 2,919,262
------------
------------
</TABLE>

Goodwill recorded in connection with this acquisition is being amortized on
a straight-line basis over 40 years.

The following unaudited pro forma financial information reflects the effect
of the acquisitions described in the preceding paragraphs assuming each
acquisition had occurred at the beginning of the period shown:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1996 1997
-------------- --------------
<S> <C> <C>
Net sales.................................................... $ 175,574,294 $ 209,748,819
-------------- --------------
-------------- --------------
Net income................................................... $ 211,409 $ 1,843,623
-------------- --------------
-------------- --------------
Earnings per share of common stock (basic and diluted)....... $ 0.03 $ 0.23
-------------- --------------
-------------- --------------
</TABLE>

The purchase allocation of the acquisitions completed in 1997 and 1998 are
subject to finalization of pre-existing contingencies and other purchase
accounting adjustments, none of which are expected to be material.

F-10
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 4. ACCOUNTS RECEIVABLE

<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------
1996 1997
------------ -------------
<S> <C> <C>
Trade customers.................................................. $ 8,146,735 $ 20,450,402
Rebates due from suppliers....................................... 230,383 980,249
Other............................................................ 271,611 280,582
Less--allowance for doubtful accounts............................ (12,072) (220,951)
------------ -------------
$ 8,636,657 $ 21,490,282
------------ -------------
------------ -------------
</TABLE>

NOTE 5. BORROWING ARRANGEMENTS

The following is a summary of the Company's borrowings:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1996 1997
---------- ------------
<S> <C> <C>
Short-term debt:
Line-of-credit.................................................... $ -- $ 8,040,313
---------- ------------
---------- ------------

Long-term debt:
Agreement dated January 27, 1993, maturing on January 26, 1997;
interest rate 10.25%............................................ $ 477 $ --
Capitalized lease obligations (See Note 9)........................ 99,786 168,082
Less--current portion............................................... (35,567) (55,467)
---------- ------------
Total long-term debt................................................ $ 64,696 $ 112,615
---------- ------------
---------- ------------
</TABLE>

The Company's line-of-credit ("Credit Facility") allowed borrowings up to
$15,000,000. The Credit Facility was originally scheduled to mature on September
11, 1998, but was replaced by a new lending agreement described below. The
agreement which the Company utilized during 1997 provided for borrowings up to
an amount determined pursuant to a borrowing base formula which included various
categories of collateral. The interest rate for the Credit Facility was based
upon either the LIBOR rate plus 2 percent (7.75% at December 31, 1997) or the
prime rate (8.50% at December 31, 1997). The Credit Facility contained covenants
to maintain a minimum tangible net worth (as defined by the agreement) and
certain interest coverage ratios. At December 31, 1997, the available and unused
portion of the Credit Facility was $6,959,687.

On January 9, 1998, the Company revised its Credit Facility. The new Credit
Facility is a $50.0 million secured Credit Facility provided by National City
Bank of Dayton and two other banks. The Credit Facility consists of a $35.0
million revolving line of credit and a $15.0 million term loan arrangement, both
at variable rates of interest. The Credit Facility contains restrictive
covenants which include, among other restrictions: (i) the maintenance of
certain financial ratios; (ii) restrictions on (a) the purchase or sale of
assets, (b) any merger, sale or consolidation activity, (c) loans, investments
and guarantees made by the Company, (d) lease and sale and leaseback
transactions, and (e) capital expenditures; and (iii) certain limitations on the
incurrence of other indebtedness. In addition, the Credit Facility prohibits the
payment of dividends and certain repurchases of the Company's common stock. The
Credit Facility is collateralized by substantially all of the Company's assets.

F-11
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 6. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------
1996 1997
------------ ------------
<S> <C> <C>
Furniture and fixtures............................................ $ 615,475 $ 804,376
Equipment......................................................... 1,283,602 1,939,039
Leasehold improvements............................................ 74,568 175,122
Transportation equipment.......................................... 134,369 392,771
------------ ------------
2,108,014 3,311,308
Less-accumulated depreciation..................................... 1,091,850 1,426,177
------------ ------------
$ 1,016,164 $ 1,885,131
------------ ------------
------------ ------------
</TABLE>

NOTE 7. EMPLOYEE BENEFIT PLANS

The Company's employee benefit plans are defined contribution plans and
include employee savings plans and profit sharing plans. Savings plans cover
substantially all employees and include Company matches to employee
contributions limited to a percent of the employee's compensation. The profit
sharing plan covers employees (excluding sales personnel, officers of the
Company and employees of the Company's subsidiaries) who meet certain minimum
employment requirements. Expenses under these plans were $99,935, $109,855 and
$139,784 for the years ended December 31, 1995, 1996 and 1997, respectively.

NOTE 8. INCOME TAXES

The provision (benefit) for taxes on income consists of the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1995 1996 1997
---------- ---------- ------------
<S> <C> <C> <C>
Current:
Federal.............................................. $ 395,085 $ 569,980 $ 1,252,039
State................................................ 120,920 153,595 276,796
---------- ---------- ------------
Total................................................ 516,005 723,575 1,528,835
---------- ---------- ------------

Deferred:
Federal.............................................. (6,296) 22,623 (21,351)
State................................................ (580) 9,495 (464)
---------- ---------- ------------
Total................................................ (6,876) 32,118 (21,815)
---------- ---------- ------------
Total tax provision.................................... $ 509,129 $ 755,693 $ 1,507,020
---------- ---------- ------------
---------- ---------- ------------
</TABLE>

F-12
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 8. INCOME TAXES (CONTINUED)
Deferred tax and assets and liabilities comprise the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------
1996 1997
---------- -----------
<S> <C> <C>
Deferred tax assets:
Inventory.......................................................... $ 4,420 $ 145,903
State tax accruals................................................. 29,240 30,784
Intangibles........................................................ 13,180 --
Reserves and accruals not yet deductible........................... -- 85,139
Other.............................................................. 10,020 13,380
---------- -----------
Total deferred tax assets.......................................... 56,860 275,206
---------- -----------

Deferred tax liabilities:
Fixed assets and depreciation...................................... (80,830) (108,581)
Intangibles........................................................ -- (2,472)
Other.............................................................. (1,783) (591)
---------- -----------
Total deferred tax liabilities..................................... (82,613) (111,644)
---------- -----------
Net deferred taxes................................................. $ (25,753) $ 163,562
---------- -----------
---------- -----------
</TABLE>

A reconciliation of the federal statutory tax rate to the Company's
effective tax rate is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------------
1995 1996 1997
---------- ---------- ------------
<S> <C> <C> <C>
U.S. federal statutory rate applied to income before
income taxes......................................... $ 442,681 $ 636,794 $ 1,264,334
State income taxes, net of federal income tax effect... 79,424 105,560 182,739
Permanent differences.................................. 14,860 13,715 38,435
Adjustment to prior year tax accruals.................. (27,869) -- --
Other.................................................. 33 (376) 21,512
---------- ---------- ------------
$ 509,129 $ 755,693 $ 1,507,020
---------- ---------- ------------
---------- ---------- ------------
</TABLE>

F-13
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 9. LEASES

The Company leases office space (see Note 13) and certain automobiles under
various operating and capital leases. Lease terms range from 1 to 10 years.
Operating leases which expire are generally renewed or replaced by similar
leases and renewal options. The total rental expense under operating leases
amounted to $253,856, $370,845 and $796,863 for the years ended December 31,
1995, 1996 and 1997, respectively.

Following is a summary of future minimum rental payments with respect to
leases that have initial or remaining noncancelable lease terms in excess of one
year at December 31, 1997:

<TABLE>
<CAPTION>
CAPITALIZED OPERATING
YEAR ENDED DECEMBER 31, LEASES LEASES
- ------------------------------------------------------------------- ----------- ------------
<S> <C> <C>
1998............................................................. $ 68,576 $ 1,044,178
1999............................................................. 59,879 789,593
2000............................................................. 62,382 648,785
2001............................................................. -- 381,760
2002............................................................. -- 318,460
Later years...................................................... -- 1,129,880
----------- ------------
Total minimum lease payments....................................... 190,837 $ 4,312,656
------------
------------
Imputed interest................................................... 22,755
-----------
Present value of minimum capitalized lease payments................ 168,082
Current portion.................................................... 55,467
-----------
Long-term capitalized lease obligation............................. $ 112,615
-----------
-----------
</TABLE>

NOTE 10. STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
ADDITIONAL
SHARES PAID-IN RETAINED TREASURY
OUTSTANDING CAPITAL EARNINGS STOCK
----------- ------------- ------------ -----------
<S> <C> <C> <C> <C>
Balance, December 31, 1994................................ 3,582,000 $ 25,225 $ 1,828,690 $ (15,000)
Net income................................................ -- -- 792,873 --
----------- ------------- ------------ -----------
Balance December 31, 1995................................. 3,582,000 25,225 2,621,563 (15,000)
Net income................................................ -- -- 1,117,231 --
Compensation expense recognized........................... -- 279,726 -- --
Net proceeds from initial public offering................. 1,725,000 7,794,298 -- --
Additional consideration DDP acquisition
(See Note 3)............................................ -- 250,000 -- --
----------- ------------- ------------ -----------
Balance, December 31, 1996................................ 5,307,000 8,349,249 3,738,794 (15,000)
Shares issued in connection with 1997 acquisitions (See
Note 3)................................................. 1,314,164 10,746,245 -- --
Net income................................................ -- -- 2,211,609 --
----------- ------------- ------------ -----------
Balance, December 31, 1997................................ 6,621,164 $19,095,494 $ 5,950,403 $ (15,000)
----------- ------------- ------------ -----------
----------- ------------- ------------ -----------
</TABLE>

On November 15, 1996, the Company completed an initial public offering of
1,725,000 shares of common stock (including an underwriters' overallotment
option of 225,000 shares) to the public at a price

F-14
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 10. STOCKHOLDERS' EQUITY (CONTINUED)
of $5.67 per share. Net proceeds to the Company after deducting underwriting
fees and expenses amounted to $7,794,298. The proceeds were used to repay
outstanding indebtedness under the Credit Facility and for other corporate
purposes.

In conjunction with the purchase of DDP by LLC, LLC agreed to provide the
three selling stockholders of DDP a stock incentive so long as such stockholders
remain employees of the Company. LLC agreed to transfer a total of 87,780 shares
of the Company's common stock owned by LLC to the employees over a three year
period ending December 31, 1998. However, upon the initial public offering of
the Company's common stock, all such shares vested. The market value of the
stock award was recognized as compensation expense at the initial public
offering date.

NOTE 11. STOCK OPTION PLANS

1996 STOCK OPTION PLAN

The 1996 Stock Option Plan, which was approved by the Board of Directors on
September 19, 1996, authorizes the granting of options to purchase up to 375,000
shares of common stock to eligible officers and key management employees at not
less than the market value on the date the options are granted. The option
period may not exceed ten years from the date of grant.

Under this Plan, options to purchase 166,500 shares of common stock at $5.67
per share and 9,900 shares of common stock at $6.09 were issued during 1996 and
1997, respectively. Options vest ratably over a three year period. No options
under this Plan have been exercised.

NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

The Non-employee Directors Stock Option Plan (the "Directors Plan")
authorized the granting of options to purchase a total of 150,000 shares of
common stock.

The Directors Plan authorized the granting of options to purchase 22,500
shares of common stock to each director who is not an employee of the Company at
the first annual meeting of shareholders following the Company's initial public
offering at not less than the market value on the date the options are granted.
During 1997, options to purchase 67,500 shares were issued at $6.83 per share.
The option period may not exceed ten years from the date of grant. The options
will vest ratably over a three year period. No options under this Plan have been
exercised.

Additionally, the Directors Plan authorized the granting of options to
purchase 7,500 shares of common stock, not to exceed 22,500 shares, for any
non-employee director elected subsequent to the first annual meeting of
shareholders. Any options granted subsequent to the initial meeting of
shareholders vest ratably over a three year period.

ACCOUNTING FOR STOCK AWARDS AND STOCK OPTIONS

In October 1995, SFAS No. 123, "Accounting for Stock-Based Compensation" was
issued. As permitted by the standard, the Company has elected to continue to
follow existing accounting guidance, Accounting Principles Board Opinion No. 25
and related interpretations, for stock based compensation. SFAS No. 123 requires
companies electing to follow existing accounting rules to disclose the pro forma
effect as if the fair value based method of accounting called for by SFAS No.
123 had been applied.

F-15
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 11. STOCK OPTION PLANS (CONTINUED)
The weighted average fair value of stock options granted during 1996 was
$2.63 and in 1997 was $3.72. The fair value of the options were estimated on the
date of grant using the Black-Scholes option pricing model with the following
assumptions used for grants issued in 1996 and 1997, respectively: dividend
yield of 0%, expected volatility of 50.0% and 53.7%; risk-free interest rate of
6.5% and 7.5%; and expected lives of four and five years. Had compensation cost
for the Company's stock based compensation plans been determined based on the
fair value at the grant dates consistent with the provisions of SFAS No. 123,
the Company's net income and earnings per common share for 1997 would have been
reduced to the pro forma amounts indicated below (amounts for 1996 are not
material):

<TABLE>
<CAPTION>
<S> <C>
Net income--as reported......................................................... $ 2,211,609
------------
------------
Pro forma net income............................................................ $ 2,091,193
------------
------------
Earnings per common share (basic and diluted)--as reported...................... $ 0.39
------------
------------
Pro forma earnings per common share (basic and diluted)......................... $ 0.37
------------
------------
</TABLE>

NOTE 12. BASIC AND DILUTED EARNINGS PER COMMON SHARE

The only dilutive securities of the Company relate to stock options. The
computation of basic and diluted earnings per common share is shown below:

<TABLE>
<CAPTION>
1995 1996 1997
--------------------------- --------------------------- ---------------------------
INCOME SHARES INCOME SHARES INCOME SHARES
(NUMERATOR) (DENOMINATOR) (NUMERATOR) (DENOMINATOR) (NUMERATOR) (DENOMINATOR)
------------ ------------- ------------ ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Income available to
common stockholders... $ 792,873 3,582,000 $1,117,231 3,798,599 $2,211,609 5,671,833
------------ ------------ ------------
------------ ------------ ------------
Effect of dilutive
securities............ -- 15,540 50,607
------------- ------------- -------------
Income available to
common stock
holders plus assumed
conversion............ $ 792,873 3,582,000 $1,117,231 3,814,139 $2,211,609 5,722,440
------------ ------------- ------------ ------------- ------------ -------------
------------ ------------- ------------ ------------- ------------ -------------
Basic earnings per
common share.......... $ 0.22 $ 0.29 $ 0.39
------------ ------------ ------------
------------ ------------ ------------
Diluted earnings per
common share $ 0.22 $ 0.29 $ 0.39
------------ ------------ ------------
------------ ------------ ------------
</TABLE>

All stock options outstanding at December 31, 1996 and December 31, 1997
were included in the computation of diluted earnings per common share for the
years ended December 31, 1996 and 1997. There were no stock options outstanding
at December 31, 1995 to be included in the computation of diluted earnings per
common share for the year ended December 31, 1995.

NOTE 13. TRANSACTIONS WITH RELATED PARTIES

During 1996, the Company entered into a lease for a 30,000 square foot
office and warehouse building in Dayton, Ohio. The lessors include two officers
of the Company and two former officers of the Company who own, in the aggregate,
a 50% equity interest in the lessor. The lease is for a term of ten years

F-16
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 13. TRANSACTIONS WITH RELATED PARTIES (CONTINUED)
commencing on November 1, 1996 for a base monthly rental of $23,779, subject to
a proportionate increase each year after July 1999 based on the increase in the
consumer price index.

NOTE 14. COMMITMENTS AND CONTINGENCIES

In the normal course of business the Company is subject to claims, both
asserted and unasserted. Based on information presently available, management
does not believe that any of these issues would have a material effect on the
Company's financial position and results of operations.

F-17
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 15. SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED):

The following table sets forth selected quarterly financial data for 1996
and 1997.

<TABLE>
<CAPTION>
1996 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
- ---------------------------------------------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net sales........................................... $ 12,555,983 $ 13,691,476 $ 17,822,544 $ 19,357,725
Cost of sales....................................... 10,029,524 11,132,312 14,781,598 16,117,608
------------- ------------- ------------- -------------
Gross profit........................................ 2,526,459 2,559,164 3,040,946 3,240,117
Selling, general and administrative expenses........ 1,880,514 2,152,924 2,307,844 2,549,840
Non-cash compensation expense....................... -- -- -- 279,726
------------- ------------- ------------- -------------
Operating income.................................... 645,945 406,240 733,102 410,551
Interest expense.................................... (66,938) (75,649) (100,588) (69,152)
Other income (expense).............................. 7,938 3,176 6,884 (28,585)
------------- ------------- ------------- -------------
Income before income taxes.......................... 586,945 333,767 639,398 312,814
Provision for income taxes.......................... 243,582 138,497 265,352 108,262
------------- ------------- ------------- -------------
Net income.......................................... $ 343,363 $ 195,270 $ 374,046 $ 204,552
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Earnings per share of common stock (basic and
diluted)*......................................... $ 0.10 $ 0.05 $ 0.10 $ 0.05
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Weighted average number of common shares
outstanding--basic................................ 3,582,000 3,582,000 3,582,000 4,443,686
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Weighted average number of common shares
outstanding--diluted.............................. 3,582,000 3,582,000 3,582,000 4,459,226
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>

<TABLE>
<CAPTION>
1997 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
- ---------------------------------------------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Net sales........................................... $ 20,226,020 $ 22,123,739 $ 29,001,730 $ 36,135,163
Cost of sales....................................... 16,745,304 18,262,704 23,608,006 29,574,200
------------- ------------- ------------- -------------
Gross profit........................................ 3,480,716 3,861,035 5,393,724 6,560,963
Selling, general and administrative expenses........ 2,717,073 3,040,238 4,364,419 5,319,207
------------- ------------- ------------- -------------
Operating income.................................... 763,643 820,797 1,029,305 1,241,756
Interest expense.................................... (871) (23,713) (51,385) (104,404)
Other income........................................ 12,121 14,472 2,328 14,580
------------- ------------- ------------- -------------
Income before income taxes.......................... 774,893 811,556 980,248 1,151,932
Provision for income taxes.......................... 313,832 328,680 406,803 457,705
------------- ------------- ------------- -------------
Net income.......................................... $ 461,061 $ 482,876 $ 573,445 $ 694,227
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Earnings per share of common stock (basic and
diluted).......................................... $ 0.09 $ 0.09 $ 0.10 $ 0.11
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Weighted average number of common shares
outstanding--basic................................ 5,307,000 5,413,968 5,893,077 6,106,328
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Weighted average number of common shares
outstanding--diluted.............................. 5,341,850 5,446,659 5,923,013 6,178,239
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
</TABLE>

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

* Aggregated quarterly earnings per share amounts may not equal earnings per
share amounts for the year due to the method of performing calculations.

F-18
<PAGE>
MIAMI COMPUTER SUPPLY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

NOTE 16. UNAUDITED DATA (SUBSEQUENT TO THE REPORT OF INDEPENDENT
ACCOUNTANTS) FOR THE INTERIM PERIODS ENDED MARCH 31, 1997 AND 1998

The accompanying unaudited consolidated financial statements as of and for
the three months ended March 31, 1997 and 1998 have been prepared in accordance
with Rule 10-01 of SEC Regulation S-X. Consequently, they do not include all the
disclosures required under generally accepted accounting principles for complete
financial statements. However, in the opinion of the management of the Company,
the consolidated financial statements presented herein contain all adjustment
(consisting only of normal recurring adjustments) necessary to present fairly
the financial position, results of operations and cash flows of the Company and
its consolidated subsidiaries.

In January 1998, the Company entered into a new $50.0 million lending
arrangement (See Note 5) permitting the Company to borrow funds for a three year
period. Accordingly, borrowings under the arrangement at March 31, 1998 are
classified as long-term debt. The new borrowing arrangements were subsequently
amended to remove the term portion of the borrowing arrangement and convert the
entire borrowing arrangement to a $50.0 million revolving loan.

The following unaudited pro forma information reflects the impact of the
acquisitions described in Note 3 assuming they had occurred on January 1, 1997:

<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31, 1997
-------------------
<S> <C>
Net sales................................................................ $ 49,091,229
-------------------
-------------------
Net income............................................................... $ 599,633
-------------------
-------------------
Earnings per share of common stock (basic and diluted)................... $ 0.08
-------------------
-------------------
</TABLE>

Effective March 1, 1998, the Company completed its acquisition of Computer
Showcase, Inc. in a purchase business combination. Computer Showcase, Inc. is a
distributor of visual presentation systems and products. This acquisition is not
significant to the Company's consolidated financial statements.

F-19
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of Miami Computer Supply Corporation

In our opinion, the accompanying balance sheet and the related statements of
income and retained earnings and of cash flows present fairly, in all material
respects, the financial position of Minnesota Western/Creative Office Products,
Inc. at October 31, 1996 and September 30, 1997 and the results of its
operations and its cash flows for each of the two years in the period ended
October 31, 1996 and for the eleven months ended September 30, 1997 in
conformity with generally accepted accounting principles. These 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 of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for the opinion expressed
above.

PRICE WATERHOUSE LLP

Cincinnati, Ohio
November 14, 1997

F-20
<PAGE>
MINNESOTA WESTERN/CREATIVE OFFICE PRODUCTS, INC.

BALANCE SHEET

<TABLE>
<CAPTION>
OCTOBER 31, SEPTEMBER 30,
1996 1997
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................................................ $ 298,256 $ 150
Accounts receivable, net of allowance for doubtful accounts of $60,000 and
$89,257 respectively (Note B).................................................. 5,302,095 7,035,720
Inventories...................................................................... 4,622,916 5,870,910
Prepaid expenses and other current assets........................................ 94,376 130,827
------------- -------------
Total current assets........................................................... 10,317,643 13,037,607
Property and equipment, net (Note C)............................................... 1,262,306 1,830,039
Other assets....................................................................... 144,956 300,336
------------- -------------
Total assets................................................................... $ 11,724,905 $ 15,167,982
------------- -------------
------------- -------------

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt (Note F)....................................... $ 182,589 $ 223,126
Accounts payable................................................................. 4,017,628 4,819,959
Customer deposits................................................................ 353,527 463,880
Line of credit (Note E).......................................................... 2,755,173 4,247,193
Accrued expenses................................................................. 778,676 984,327
------------- -------------
Total current liabilities...................................................... 8,087,593 10,738,485
Long-term debt, net of current portion (Note F).................................... 470,076 571,592
------------- -------------
Total liabilities.............................................................. 8,557,669 11,310,077
------------- -------------
Commitments and contingencies (Note J)............................................. -- --
Stockholders' equity:
Common stock, par value $10 per share; 10,000 shares authorized; 1,050 shares
issued and outstanding......................................................... 10,500 10,500
Paid-in capital.................................................................. 40,604 40,604
Retained earnings................................................................ 3,116,132 3,806,801
------------- -------------
Total stockholders' equity..................................................... 3,167,236 3,857,905
------------- -------------
Total liabilities and stockholders' equity..................................... $ 11,724,905 $ 15,167,982
------------- -------------
------------- -------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-21
<PAGE>
MINNESOTA WESTERN/CREATIVE OFFICE PRODUCTS, INC.

STATEMENT OF INCOME AND RETAINED EARNINGS

<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31, ELEVEN MONTHS
---------------------------- ENDED SEPTEMBER
1995 1996 30, 1997
------------- ------------- ------------------
<S> <C> <C> <C>
Revenues....................................................... $ 33,200,744 $ 40,065,289 $ 45,964,006
Cost of revenues............................................... 23,187,101 27,381,581 31,994,661
------------- ------------- ------------------
Gross margin................................................... 10,013,643 12,683,708 13,969,345
Selling, general and administrative expenses................... 9,358,775 10,945,345 11,989,658
------------- ------------- ------------------
Income from operations......................................... 654,868 1,738,363 1,979,687

Other income and expenses
Interest expense............................................. (198,529) (285,521) (329,751)
Other income................................................. 38,895 92,349 178,845
------------- ------------- ------------------
Income before income taxes..................................... 495,234 1,545,191 1,828,781
Income taxes (Note G).......................................... 9,800 23,700 34,900
------------- ------------- ------------------
Net income..................................................... 485,434 1,521,491 1,793,881
Retained earnings--beginning of period......................... 1,932,302 2,267,736 3,116,132
Distributions.................................................. (150,000) (673,095) (1,103,212)
------------- ------------- ------------------
Retained earnings--end of period............................... $ 2,267,736 $ 3,116,132 $ 3,806,801
------------- ------------- ------------------
------------- ------------- ------------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-22
<PAGE>
MINNESOTA WESTERN/CREATIVE OFFICE PRODUCTS, INC.

STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
ELEVEN MONTHS
YEAR ENDED OCTOBER 31, ENDED
1995 1996 SEPTEMBER 30, 1997
------------ ------------- ------------------
<S> <C> <C> <C>
Cash flow from operating activities:
Net income.................................................... $ 485,434 $ 1,521,491 $ 1,793,881
Adjustments to reconcile net income to net cash provided
(used) by operating activities:
Depreciation and amortization............................... 147,774 233,927 308,688
(Increase) decrease in:
Accounts receivable....................................... (1,142,341) (907,481) (1,733,625)
Inventory................................................. (1,270,277) (692,316) (1,247,994)
Prepaid expenses and other assets......................... 49,618 (41,134) (191,831)
(Decrease) increase in:
Accounts payable.......................................... 644,979 447,883 802,331
Accrued expenses.......................................... (136,151) 271,888 205,651
Customer deposits......................................... 307,926 45,601 110,353
------------ ------------- ------------------
Net cash (used) provided by operating activities................ (913,038) 879,859 47,454
------------ ------------- ------------------
Cash flows from investing activities:
Purchase of property and equipment............................ (835,445) (354,290) (793,268)
------------ ------------- ------------------
Cash flows from financings activities:
Proceeds from borrowings...................................... 2,093,415 14,565,422 19,207,410
Principal payments on borrowings.............................. (284,420) (14,217,701) (17,656,490)
Stockholder distributions..................................... (150,000) (673,095) (1,103,212)
------------ ------------- ------------------
Net cash provided (used) by financing activities................ 1,658,995 (325,374) 447,708
------------ ------------- ------------------
Net (decrease) increase in cash................................. (89,488) 200,195 (298,106)
Cash and cash equivalents, beginning of period.................. 187,549 98,061 298,256
------------ ------------- ------------------
Cash and cash equivalents, end of period........................ $ 98,061 $ 298,256 $ 150
------------ ------------- ------------------
------------ ------------- ------------------
Supplemental disclosures of cash flow information:
Interest paid................................................. $ 198,529 $ 285,521 $ 329,751
Income taxes paid............................................. $ 14,446 $ 11,114 $ 31,585
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-23
<PAGE>
MINNESOTA WESTERN/CREATIVE OFFICE PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

GENERAL

Minnesota Western/Creative Office Products, Inc. (the "Company") is
primarily engaged in selling audio and visual equipment and supplies. The
Company also provides audio/visual systems design. Substantially all of the
Company's operations are in California and Washington.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand and on deposit and highly
liquid investments with maturities of three months or less. Cash equivalents are
carried at cost, which approximates fair value.

REVENUE RECOGNITION

Substantially all revenues are recognized when products are shipped.
Revenues related to systems design projects are recognized when predetermined
benchmarks are achieved and the customer has agreed to the achievement of the
benchmarks. Customer deposits represent advance payments from customers.

INVENTORIES

Inventories consists primarily of purchased audio and visual merchandise.
Inventories are stated at the lower of cost or market. Cost is determined on the
first-in, first-out basis.

INCOME TAXES

The Company, with the consent of its shareholders, has elected S Corporation
status. In lieu of federal income taxes, the shareholders are taxed on the
Company's taxable income; therefore, no provision for federal income taxes has
been included in the financial statements. California assesses tax to S
Corporations at a reduced rate.

Deferred California income taxes are provided for temporary differences
arising from basis differences for financial reporting and tax purposes.

PROPERTY AND EQUIPMENT

Property and equipment are stated at cost. Depreciation is computed on the
straight-line method. Assets are depreciated over their estimated useful lives
of five years for computer equipment, five to seven years for furniture and
equipment and vehicles and five to ten years for leasehold improvements.

CONCENTRATION OF CREDIT RISK

The Company sells to a wide variety of customers (with no customer
comprising more than 3% of sales for any period) and conducts substantially all
of its operations in California and Washington. The Company grants credit to its
customers, substantially all of whom are commercial establishments located in
the vicinity of the operating locations. The Company monitors its credit risk
using policies and procedures considered adequate by management.

F-24
<PAGE>
MINNESOTA WESTERN/CREATIVE OFFICE PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE A--SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Actual results could differ from those estimates.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts reflected in the balance sheet for cash, accounts
receivable and accounts payable approximate their respective fair values.

The carrying value of the Company's line of credit and long-term debt
approximates the fair value because of the variable nature of the interest rates
on these obligations.

NOTE B--ACCOUNTS RECEIVABLE

Accounts receivable consists of the following:

<TABLE>
<CAPTION>
OCTOBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Accounts receivable--trade....................................... $ 5,188,097 $ 6,449,168
Amounts due from suppliers....................................... 173,998 675,809
Less: Allowance for doubtful accounts............................ (60,000) (89,257)
------------ -------------
$ 5,302,095 $ 7,035,720
------------ -------------
------------ -------------
</TABLE>

NOTE C--PROPERTY AND EQUIPMENT

Property and equipment are summarized as follows:

<TABLE>
<CAPTION>
OCTOBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Furniture and equipment.......................................... $ 276,154 $ 515,659
Computer equipment............................................... 725,845 1,032,715
Vehicles......................................................... 147,487 235,642
Leasehold improvements........................................... 660,932 902,823
------------ -------------
1,810,418 2,686,839
Less accumulated depreciation.................................... (548,112) (856,800)
------------ -------------
$ 1,262,306 $ 1,830,039
------------ -------------
------------ -------------
</TABLE>

NOTE D--OPERATING LEASES

The Company leases corporate office and branch office space under operating
leases at several locations in California as well as Seattle, Washington and
Portland, Oregon. These leases have various terms ranging from one to five and
one-half (5 1/2) years. The leases generally call for future rent increases

F-25
<PAGE>
MINNESOTA WESTERN/CREATIVE OFFICE PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE D--OPERATING LEASES (CONTINUED)
and a pass-through of certain property costs. The Company also leases a vehicle
under an operating lease. As leases expire, the Company expects to renew or
replace them in the ordinary course of business.

Rent expense charged to operations the years ended October 31, 1995 and 1996
and for the eleven months ended September 30, 1997 was $217,731, $256,849 and
$220,130, respectively.

The following is a summary of noncancelable lease commitments to be charged
to operations over the remaining terms of the leases exclusive of lease
commitments to related parties which are disclosed in Note I:

<TABLE>
<CAPTION>
<S> <C>
One month ending October 31, 1997................................................. $ 14,266
Year ending October 31, 1998...................................................... 126,169
Year ending October 31, 1999...................................................... 36,356
Year ending October 31, 2000...................................................... 36,480
Year ending October 31, 2001...................................................... 9,419
Thereafter........................................................................ --
</TABLE>

NOTE E--LINE OF CREDIT

The Company has a line of credit which allows borrowings up to $5,700,000.
The line of credit matures in March 1998. The line of credit is secured by
accounts receivable, inventory and equipment. Interest is payable monthly and is
calculated at the bank's prime rate plus one-quarter percent (0.25%).
Availability under the line of credit is subject to set percentages of qualified
accounts receivable and inventory. The line requires that the Company, among
other things, maintain a ratio of debt to tangible net worth of not more than
3.5 : 1.0, current ratio of 1.0 to 1.0, depreciation and amortization coverage
ratio of not less than 1.75 : 1.0 and net income. At September 30, 1997, the
available and unused portion of the line of credit amounted to $1,452,807.

F-26
<PAGE>
MINNESOTA WESTERN/CREATIVE OFFICE PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE F--LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
OCTOBER 31, SEPTEMBER 30,
1996 1997
----------- -------------
<S> <C> <C>

Notes payable to Wells Fargo Bank secured by accounts receivable, inventory and
equipment. Payable in monthly installments of $11,486, including interest at the
bank's prime rate plus one-quarter percent (8.75% at September 30, 1997). Due
September 1999 and March 2001....................................................... $ 464,262 $ 371,652

Note payable to Wells Fargo Bank, secured by accounts receivable, inventory and
equipment. Interest is payable monthly and is calculated at the bank's prime rate
plus one-quarter percent (8.75% at September 30, 1997). Principal payments of $3,857
are payable monthly. Due September 1999............................................. 138,872 96,445

Note payable to Wells Fargo Bank. Payable in monthly installments of $2,548 including
interest at 9.7% per annum, due March 2002.......................................... -- 146,001

Non-revolving commitment for advances up to $200,000 which may be converted to a term
loan payable to Wells Fargo Bank on April 1, 1998. Secured by accounts receivable,
inventory and equipment. Interest is payable monthly and is calculated at the bank's
prime rate plus one-quarter percent (8.75% at September 30, 1997)................... 19,930 83,190

Notes payable, secured by vehicles payable in monthly installments of $3,873 including
interest at 7.56% and 9.25% per annum. Due January 1999 through September 2000...... 29,601 97,430
----------- -------------

652,665 794,718

Less current portion.................................................................. 182,589 223,126
----------- -------------

$ 470,076 $ 571,592
----------- -------------
----------- -------------
</TABLE>

For the notes payable to Wells Fargo Bank, the Company is subjected to the
same debt covenant requirements as described in Note E.

Maturities of long-term debt are as follows:

<TABLE>
<CAPTION>
<S> <C>
One month ending October 31, 1997................................................. $ 15,940
Year ending October 31, 1998...................................................... 223,743
Year ending October 31, 1999...................................................... 235,109
Year ending October 31, 2000...................................................... 184,023
Year ending October 31, 2001...................................................... 49,514
Year ending October 31, 2002...................................................... 78,070
Thereafter........................................................................ 8,319
----------
$ 794,718
----------
----------
</TABLE>

F-27
<PAGE>
MINNESOTA WESTERN/CREATIVE OFFICE PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE G--INCOME TAXES

The provision for income taxes reported in the statement of income is for
California tax and is comprised of the following:

<TABLE>
<CAPTION>
ELEVEN MONTHS
ENDED
YEAR ENDED OCTOBER 31, SEPTEMBER 30,
1995 1996 1997
----------- ----------- --------------
<S> <C> <C> <C>
Current............................................. $ 9,000 $ 24,000 $ 34,900
Deferred............................................ 800 (300) --
----------- ----------- -------
Total tax provision............................... $ 9,800 $ 23,700 $ 34,900
----------- ----------- -------
----------- ----------- -------
</TABLE>

Deferred taxes reflect the impact of temporary differences between the
amount of assets and liabilities for financial reporting purposes and tax
reporting purposes. These temporary differences are determined in accordance
with Statement of Financial Accounting Standards ("SFAS") No. 109. The major
temporary differences are the allowance for bad debts used for book purposes,
depreciation and inventory valuation.

NOTE H--401(K) SAVINGS PLAN

Employees of the Company may participate in a 401(k) savings plan, whereby
the employees may elect to make contributions pursuant to a salary reduction
agreement upon meeting age and length-of-service requirements. The Company
matches 25% of the employee's contributions with a maximum contribution of 5.0%
of the employee's compensation. The Company made matching contributions to the
plan for the years ended October 31, 1995 and 1996 and for the eleven months
ended September 30, 1997 of $45,281, $55,208 and $57,688, respectively.

NOTE I--RELATED PARTY TRANSACTIONS

In 1994, the Company entered into a ten year operating lease with the
stockholders for its corporate headquarters, which the Company occupied in April
1995. In 1996, the Company entered into a five and one-half (5 1/2) year
operating lease with the stockholders for new office space for the Company's
southern California operations. The leases call for monthly rental payments of
$15,000 and $17,000, respectively. Beginning in the year 1999 of the corporate
headquarters lease and October 1997 for the southern California office space
lease, annual rent increases are scheduled based upon the consumer price index.
The Company pays for all expenses, insurance, and taxes under both lease
agreements. Future minimum rental payments under these leases are:

<TABLE>
<CAPTION>
<S> <C>
One month ending October 31, 1997................................................. $ 32,000
Year ending October 31, 1998...................................................... 384,000
Year ending October 31, 1999...................................................... 384,000
Year ending October 31, 2000...................................................... 384,000
Year ending October 31, 2001...................................................... 384,000
Year ending October 31, 2002...................................................... 265,000
Thereafter........................................................................ 345,000
</TABLE>

The lease expense incurred on the leases with the stockholders for the years
ended October 31, 1995 and 1996 and the eleven months ended September 30, 1997
was $212,656, $212,500 and $352,000, respectively.

F-28
<PAGE>
MINNESOTA WESTERN/CREATIVE OFFICE PRODUCTS, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

NOTE J--COMMITMENTS AND CONTINGENCIES

In the normal course of business the Company is subjected to certain claims
and other legal actions. On the basis of information currently available,
management does not believe the ultimate resolution of these matters will have a
material effect on the financial statements.

F-29
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of Miami Computer Supply Corporation

In our opinion, the accompanying balance sheet and the related statements of
operations, cash flows and changes in shareholders' equity present fairly, in
all material respects, the financial position of TBS Printware Corporation at
January 3, 1997 and September 30, 1997 and the results of its operations and its
cash flows for the year ended January 3, 1997 and the nine months ended
September 30, 1997, in conformity with generally accepted accounting principles.
These 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 of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audits to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for the opinion expressed
above.

PRICE WATERHOUSE LLP

November 4, 1997
Cincinnati, Ohio

F-30
<PAGE>
TBS PRINTWARE CORPORATION

BALANCE SHEET

<TABLE>
<CAPTION>
JANUARY 3, SEPTEMBER 30,
1997 1997
------------ -------------
<S> <C> <C>
ASSETS
Current assets:
Cash............................................................................... $ -- $ 72,934
Accounts receivable, net of allowance for doubtful accounts of $20,000 and $35,314,
respectively..................................................................... 3,671,960 3,136,148
Refundable income taxes............................................................ 35,800 --
Inventories (Note 4)............................................................... 1,137,413 1,773,082
Prepaid expenses and deposits...................................................... 147,789 91,378
Deferred income tax assets (Note 9)................................................ 131,469 140,614
------------ -------------
Total current assets............................................................. 5,124,431 5,214,156
Property and equipment, net (Note 5)................................................. 458,917 351,461
------------ -------------
Total assets..................................................................... $ 5,583,348 $ 5,565,617
------------ -------------
------------ -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Bank overdraft..................................................................... $ 770,129 $ --
Line of credit borrowings (Note 6)................................................. 1,007,244 1,359,354
Accounts payable................................................................... 1,234,514 1,921,410
Accrued payroll and related liabilities............................................ 377,807 17,736
Other accrued expenses............................................................. 586,243 537,830
Current portion of long-term debt (Note 7)......................................... 18,900 14,167
Current portion of capital lease obligations (Note 8).............................. 15,871 17,084
------------ -------------
Total current liabilities........................................................ 4,010,708 3,867,581
Long-term debt (Note 7).............................................................. 9,442 --
Capital lease obligations (Note 8)................................................... 97,377 85,292
Deferred income taxes (Note 9)....................................................... 17,000 999
------------ -------------
Total liabilities................................................................ 4,134,527 3,953,872
------------ -------------
Shareholders' equity:
Common stock, no par value, 500,000 shares authorized, 100,000 shares issued and
outstanding...................................................................... 100,000 100,000
Additional paid in capital......................................................... 1,466,748 1,466,748
Retained earnings (deficit)........................................................ (117,927) 44,997
------------ -------------
Total shareholders' equity....................................................... 1,448,821 1,611,745
------------ -------------
Total liabilities and shareholders' equity....................................... $ 5,583,348 $ 5,565,617
------------ -------------
------------ -------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-31
<PAGE>
TBS PRINTWARE CORPORATION

STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
NINE NINE
MONTHS MONTHS
YEAR ENDED ENDED ENDED
JANUARY 3, SEPTEMBER SEPTEMBER
1997 30, 1996 30, 1997
---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C>
Net sales............................................. $21,764,538 $15,778,250 $14,780,269
Cost of sales......................................... 19,711,510 14,150,890 12,953,345
---------- ---------- ----------
2,053,028 1,627,360 1,826,924
---------- ---------- ----------
Operating expenses:
Selling, general and administrative................. 3,046,125 1,645,139 1,480,149
Facility relocation expense......................... 383,937 172,237 27,718
---------- ---------- ----------
Total operating expenses.......................... 3,430,062 1,817,376 1,507,867
---------- ---------- ----------
Income (loss) before interest and other income........ (1,377,034) (190,016) 319,057
Interest expense...................................... (95,247) (69,371) (72,239)
Other income, net..................................... 8,465 68,688 22,967
---------- ---------- ----------
Income (loss) before income taxes..................... (1,463,816) (190,699) 269,785
Income tax (expense) benefit (Note 9)................. 85,469 (294,015) (106,861)
---------- ---------- ----------
Net income (loss)..................................... $(1,378,347) $ (484,714) $ 162,924
---------- ---------- ----------
---------- ---------- ----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-32
<PAGE>
TBS PRINTWARE CORPORATION

STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL RETAINED
---------------------- PAID-IN EARNINGS
SHARES VALUE CAPITAL (DEFICIT)
---------- ---------- ------------ -------------
<S> <C> <C> <C> <C>
Balance at December 29, 1995................................ 100,000 $ 100,000 $ 202,595 $ 1,260,420

Net loss for the period..................................... -- -- -- (1,378,347)

Capital contributed by shareholders......................... -- -- 1,264,153 --
---------- ---------- ------------ -------------

Balance at January 3, 1997.................................. 100,000 100,000 1,466,748 (117,927)

Net income for the period................................... -- -- -- 162,924
---------- ---------- ------------ -------------

Balance at September 30, 1997............................... 100,000 $ 100,000 $ 1,466,748 $ 44,997
---------- ---------- ------------ -------------
---------- ---------- ------------ -------------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-33
<PAGE>
TBS PRINTWARE CORPORATION

STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
NINE MONTHS NINE MONTHS
YEAR ENDED ENDED
ENDED SEPTEMBER SEPTEMBER
JANUARY 3, 30, 30,
1997 1996 1997
---------- ----------- -----------
(UNAUDITED)
<S> <C> <C> <C>
Cash flows from operating activities
Net income (loss).................................... $(1,378,347) $(484,714) $ 162,924
Non-cash period expense (Note 12).................... 1,264,153 948,115 --
Adjustment to reconcile net income
to net cash flows from
operating activities:
Depreciation and amortization.................... 172,267 147,476 111,668
Deferred income taxes............................ (116,469) 297,862 (25,146)
Changes in assets and liabilities:
Accounts receivable.............................. (830,764) (2,011,490) 535,812
Refundable income taxes.......................... (35,800) -- 35,800
Inventory........................................ 439,737 185,840 (635,669)
Prepaid expenses and deposits.................... (51,031) (32,002) 56,411
Accounts payable................................. (281,548) 1,812,925 686,896
Accrued payroll and related liabilities.......... 60,131 (297,289) (360,071)
Other accrued expenses........................... 257,980 (111,396) (48,413)
---------- ----------- -----------
Net cash from operating activities............... (499,691) 455,327 520,212
---------- ----------- -----------
Cash flows from investing activities
Purchase of equipment................................ (179,971) (91,747) (4,212)
---------- ----------- -----------
Cash flows from financing activities
Line of credit borrowings............................ 4,514,782 2,600,000 6,616,019
Line of credit repayments............................ (4,457,538) (2,475,000) (6,263,909)
Long-term debt principal repayments.................. (24,475) (15,803) (14,175)
Capital lease obligation principal payments.......... (15,019) (12,782) (10,872)
---------- ----------- -----------
Net cash from financing activities............... 17,750 96,415 327,063
---------- ----------- -----------
Net change in (bank overdraft) cash.................... (661,912) 459,995 843,063
---------- ----------- -----------
(Bank overdraft) cash at beginning of period........... (108,217) (108,217) (770,129)
---------- ----------- -----------
(Bank overdraft) cash at end of period................. $ (770,129) $ 351,778 $ 72,934
---------- ----------- -----------
---------- ----------- -----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-34
<PAGE>
TBS PRINTWARE CORPORATION

NOTES TO FINANCIAL STATEMENTS

JANUARY 3, 1997 AND SEPTEMBER 30, 1997

1. THE COMPANY

TBS Printware Corporation (the "Company") distributes computer supplies and
develops, manufacturers and markets printer ribbons, toner and developers for
data processing peripheral equipment.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

FISCAL YEAR AND INTERIM FINANCIAL DATA

The Company reports on a fifty-two or fifty-three week fiscal year ending on
the Friday nearest December 31 of each year. The year ended January 3, 1997
included 53 weeks of operating activity.

The unaudited financial statements for the nine months ended September 30,
1996 have been prepared in accordance with Rule 10-01 of SEC Regulation S-X.
Consequently, these interim financial statements do not include all the
disclosures required under generally accepted accounting principles. However, in
the opinion of the management, the financial statements presented herein contain
all adjustments (consisting only of normal recurring adjustments) necessary to
present fairly the results of operations and cash flows of the Company for the
nine months ended September 30, 1996.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions. These affect the reported amounts of assets and liabilities and
disclosures of assets and liabilities at the date of the financial statements
and reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimated.

INVENTORIES

Inventories consist of printer ribbons, toner, developer and miscellaneous
computer supplies and is stated at the lower of cost or fair market. Cost is
determined using the first-in, first-out method of inventory valuation.

PROPERTY AND EQUIPMENT

Property and equipment, including capital leases, are stated at cost less
accumulated depreciation and amortization. Depreciation and amortization are
computed on the straight-line basis. The provision for depreciation is based on
the estimated useful lives of furniture and equipment (3-10 years). Capital
leases and leasehold improvements are amortized over the life of the lease.

REVENUE RECOGNITION

Revenue is recognized by the Company upon shipment of product.

INCOME TAXES

The Company records income taxes using the liability method which requires
the recognition of deferred tax assets and liabilities for the expected tax
consequences of events that have been recognized in the Company's financial
statements or tax returns. In estimating future tax consequences, generally all
expected future events other than enactments or changes in tax law or rates are
considered.

F-35
<PAGE>
TBS PRINTWARE CORPORATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 3, 1997 AND SEPTEMBER 30, 1997

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
CONCENTRATION OF CREDIT RISK AND FINANCIAL INSTRUMENTS

Financial instruments which potentially subject the Company to concentration
of credit risk consist primarily of accounts receivable. The Company performs
ongoing credit evaluations of its customers and generally does not require
collateral for sales on credit. The Company maintains reserves for potential
credit losses and such losses have been within management's expectations.

In all material respects, the carrying value of the Company's financial
instruments approximates its fair value. There are no off-balance sheet
financial instruments.

3. RELATED PARTY TRANSACTIONS

Affiliated companies of a shareholder of the Company provided the Company
sales consulting services aggregating $292,000 and $32,400 for the year ended
January 3, 1997 and for the nine months ended September 30, 1997, respectively.
Other accrued expenses included $189,000 for such services at January 3, 1997
and September 30, 1997.

4. INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
JANUARY 3, SEPTEMBER 30,
1997 1997
------------ -------------
<S> <C> <C>
Raw Materials.................................................... $ 181,386 $ 138,545
Finished goods................................................... 956,027 1,634,537
------------ -------------
$ 1,137,413 $ 1,773,082
------------ -------------
------------ -------------
</TABLE>

5. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
JANUARY 3, SEPTEMBER 30,
1997 1997
------------- -------------
<S> <C> <C>
Furniture and equipment......................................... $ 1,412,557 $ 1,416,769
Leasehold improvements.......................................... 34,296 34,296
Vehicles........................................................ 153,302 153,302
------------- -------------
1,600,155 1,604,367
Less: Accumulated depreciation and amortization................. (1,141,238) (1,252,906)
------------- -------------
$ 458,917 $ 351,461
------------- -------------
------------- -------------
</TABLE>

6. CREDIT FACILITY

At September 30, 1997, the Company has a credit facility with a bank that
provides the Company a $2,500,000 revolving loan. The credit agreement expires
on June 1, 1999. Outstanding borrowings under

F-36
<PAGE>
TBS PRINTWARE CORPORATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 3, 1997 AND SEPTEMBER 30, 1997

6. CREDIT FACILITY (CONTINUED)
the revolving loan were $1,007,244 and $1,359,354 at January 3, 1997 and
September 30, 1997, respectively. In addition, the Company has a term loan with
the bank (see Note 7).

Borrowings under the revolving loan bear interest at the lesser of the
bank's reference rate (8.25% at January 3, 1997 and 8.5% at September 30, 1997)
or the bank's adjusted LIBOR rate plus 1.75% (7.25% at January 3, 1997 and
7.4063% - 7.4375% at September 30, 1997). The applicable interest rate is
selected by the Company at the time of the borrowings and shall apply for the
interest period, as defined in the agreement. At January 3, 1997, borrowings
aggregating $700,000 were 7.25% and borrowings aggregating $307,244 were 8.25%.
At September 30, 1997, borrowings aggregating $700,000 were 7.4063%, borrowings
aggregating $300,000 were 7.4375% and borrowings aggregating $359,354 were 8.5%.
All borrowings are collateralized by substantially all of the Company's assets.

Under the terms of the credit facility the Company is required to maintain
certain financial covenants. In addition, except as permitted by the bank, the
Company may not declare or pay dividends, issue or acquire any of its capital
stock, make capital expenditures in excess of $250,000 during any single year or
incur additional indebtedness.

Interest paid totaled $95,247 and $72,139 for the year ended January 3, 1997
and the nine months ended September 30, 1997, respectively.

7. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
JANUARY 3, SEPTEMBER 30,
1997 1997
----------- -------------
<S> <C> <C>
Note payable to bank, interest at bank's reference rate plus .25%
(8.5% at January 3, 1997 and 8.75% at September 30, 1997),
collateralized by related equipment, monthly principal payments
of $1,575 through July 1998...................................... $ 28,342 $ 14,167
Less current portion............................................... (18,900) (14,167)
----------- -------------
$ 9,442 $ --
----------- -------------
----------- -------------
</TABLE>

8. LEASES

OPERATING LEASE

During the year ended January 3, 1997, the Company relocated its corporate
facility to a new location. The Company leases its new facility under an
operating lease that expires in June 2001. The Company is required to pay its
share of property taxes, insurance and maintenance costs. The Company also
leases a regional facility under an operating lease that expires in December
2002. Rental expense for both the corporate and regional facilities was $250,791
and $111,070 for the year ended January 3, 1997 and the nine months ended
September 30, 1997, respectively.

The Company remains obligated for the corporate facility it occupied prior
to its relocation. The Company subsequently subleased this space to another
company in December 1996. Rental expense along

F-37
<PAGE>
TBS PRINTWARE CORPORATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 3, 1997 AND SEPTEMBER 30, 1997

8. LEASES (CONTINUED)
with other costs to relocate the corporate facility was $398,215 and $285,658
during the year ended January 3, 1997 and the nine months ended September 30,
1997, respectively. Sublease rent was $14,278 and $257,940 for the year ended
January 3, 1997 and the nine months ended September 30, 1997, respectively. The
lease expired in November 1997.

CAPITAL LEASES

The Company leases two vehicles under agreements accounted for as capital
lease agreements. The leases expire January and March 2000. The Company is
required to pay all costs related to ownership. Leased equipment is included in
property and equipment as follows:

<TABLE>
<CAPTION>
JANUARY 3, SEPTEMBER 30,
1997 1997
---------- -------------
<S> <C> <C>
Vehicles........................................................... $ 140,975 $ 140,975
Accumulated amortization........................................... (30,326) (43,754)
---------- -------------
$ 110,649 $ 97,221
---------- -------------
---------- -------------
</TABLE>

FUTURE MINIMUM LEASE PAYMENTS

The future minimum lease payments at September 30, 1997 are as follows:

<TABLE>
<CAPTION>
OPERATING
LEASES NET
CAPITAL OF
FISCAL YEAR LEASES SUBLEASE TOTAL
- --------------------------------------------------------- ---------- ---------- ----------
<S> <C> <C> <C>
1997..................................................... $ 6,785 $ 28,250 $ 35,035
1998..................................................... 27,139 124,508 151,647
1999..................................................... 27,139 133,078 160,217
2000..................................................... 62,382 133,078 195,460
2001..................................................... -- 70,939 70,939
2002..................................................... -- 8,800 8,800
---------- ---------- ----------
123,445 $ 498,653 $ 622,098
---------- ----------
---------- ----------
Less imputed interest.................................... 21,069
----------
Present value of future minimum lease payments........... 102,376
Less current portion..................................... 17,084
----------
$ 85,292
----------
----------
</TABLE>

F-38
<PAGE>
TBS PRINTWARE CORPORATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 3, 1997 AND SEPTEMBER 30, 1997

9. INCOME TAXES

The provision (benefit) for income taxes consists of the following:

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
JANUARY 3, SEPTEMBER 30,
1997 1997
----------- -------------
<S> <C> <C>
Current liability:
Federal......................................................... $ 25,000 $ 101,831
State........................................................... 6,000 30,176
----------- -------------
31,000 132,007
----------- -------------

Deferred liability (benefit):
Federal......................................................... (98,998) (19,314)
State........................................................... (17,471) (5,832)
----------- -------------
(116,469) (25,146)
----------- -------------
$ (85,469) $ 106,861
----------- -------------
----------- -------------
</TABLE>

The deferred income tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
JANUARY 3, SEPTEMBER 30,
1997 1997
---------- -------------
<S> <C> <C>
Deferred income tax assets:
Revenue recognition.............................................. $ 101,948 $ --
Reserves and accruals not currently deductible................... 58,679 148,533
Other............................................................ 3,842 (15)
---------- -------------
$ 164,469 $ 148,518
---------- -------------
---------- -------------
Deferred income tax liabilities:
Depreciation..................................................... $ 17,000 $ 999
Reserves and accruals currently deductible....................... 33,000 7,904
---------- -------------
$ 50,000 $ 8,903
---------- -------------
---------- -------------
</TABLE>

The following table summarizes the difference between the income tax
provision at expected statutory rates and the Company's provision for income
taxes:

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
JANUARY 3, SEPTEMBER 30,
1997 1997
----------- -------------
<S> <C> <C>
Income tax (benefit) at expected federal statutory rate........... $ (497,697) $ 91,727
State income taxes, net of federal benefit........................ (7,570) 16,067
Lack of tax benefit on settlement with supplier (Note 12)......... 429,815 --
Other............................................................. (10,017) (933)
----------- -------------
Provision (benefit) for income taxes.............................. $ (85,469) $ 106,861
----------- -------------
----------- -------------
</TABLE>

F-39
<PAGE>
TBS PRINTWARE CORPORATION

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

JANUARY 3, 1997 AND SEPTEMBER 30, 1997

9. INCOME TAXES (CONTINUED)
Income taxes paid amounted to $57,935 and $10,602 for the year ended January
3, 1997 and for the nine months ended September 30, 1997, respectively.

10. EMPLOYEE BENEFITS

The Company has a defined contribution 401(k) plan available to
substantially all employees. Each participant may elect to defer up to 20% of
his or her annual salary, subject to Internal Revenue Code limitations. The
Company matches 50% of the participant's contribution up to the first 5% of the
participant's compensation. Employee contributions are fully vested and Company
contributions are 50% vested after the first year of service and are fully
vested after two years of service. Company contributions were approximately
$25,000 and $14,800 for the year ended January 3, 1997 and for the nine months
ended September 30, 1997, respectively.

11. MAJOR CUSTOMER

Net sales to one customer were approximately $4,900,000 and $3,200,000 for
the year ended January 3, 1997 and for the nine months ended September 30, 1997,
respectively. The receivable balance for sales to this customer were $709,323
and $992,611 at January 3, 1997 and September 30, 1997, respectively.

12. SETTLEMENT WITH SUPPLIER

In 1997, the shareholders of the Company reached an agreement with a
supplier regarding the supplier's assertion that the Company had underpaid the
supplier for purchases of inventory during the fiscal years ended December 29,
1995 and January 3, 1997. The shareholders settled the matter by making a
payment to the supplier of which $1,264,153 related to the fiscal year ended
January 3, 1997. The payment has been reflected in the accompanying financial
statements as a charge against cost of goods sold with an offsetting credit to
additional paid-in capital.

F-40
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors of Miami Computer Supply Corporation

In our opinion, the accompanying balance sheet and the related statements of
income and retained earnings and of cash flows present fairly, in all material
respects, the financial position of Britco, Inc. at April 30, 1997 and the
results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these statements in accordance with
generally accepted auditing standards which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audit provides a reasonable basis for the opinion expressed
above.

PRICE WATERHOUSE LLP

Cincinnati, Ohio
October 22, 1997

F-41
<PAGE>
BRITCO, INC.

BALANCE SHEET

<TABLE>
<CAPTION>
APRIL 30, JULY 31,
1997 1997
--------- ---------
(UNAUDITED)
<S> <C> <C>

ASSETS

Current assets:
Cash and cash equivalents.......................................... $ 386,539 $ 383,716
Accounts receivable net of allowance for doubtful accounts of
$73,472 and $76,608, respectively................................ 1,507,780 2,018,774
Inventory.......................................................... 412,335 448,088
Prepaid expenses................................................... 14,662 16,482
Other assets....................................................... 144,854 63,433
--------- ---------
Total current assets............................................. 2,466,170 2,930,493
Property and equipment............................................... 12,844 11,938
--------- ---------
Total assets......................................................... $2,479,014 $2,942,431
--------- ---------
--------- ---------

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
Accounts payable................................................... $1,463,466 $1,914,851
Accrued payroll and related liabilities............................ 52,850 55,100
Accrued income and other tax liabilities........................... 113,668 111,613
Other accrued liabilities.......................................... 184,656 141,545
--------- ---------
Total liabilities.................................................... 1,814,640 2,223,109
--------- ---------
Shareholders' equity:
Common stock, par value $1.00 per share, 10,000 shares
authorized, issued and outstanding............................. 10,000 10,000
Paid in capital.................................................. 5,000 5,000
Retained earnings................................................ 649,374 704,322
--------- ---------
Total shareholders' equity........................................... 664,374 719,322
--------- ---------
Total liabilities and shareholders' equity........................... $2,479,014 $2,942,431
--------- ---------
--------- ---------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-42
<PAGE>
BRITCO, INC.

STATEMENT OF INCOME AND RETAINED EARNINGS

<TABLE>
<CAPTION>
THREE THREE
YEAR ENDED MONTHS MONTHS
APRIL 30, ENDED JULY ENDED JULY
1997 31, 1996 31, 1997
---------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Net sales.............................................. $15,721,713 $3,468,595 $4,452,320
Cost of goods sold..................................... 13,705,034 2,973,936 3,857,070
---------- ----------- -----------
Gross margin........................................... 2,016,679 494,659 595,250
Selling, general and administrative expenses........... 1,967,488 441,757 524,570
Other.................................................. (1,086) 942 (2,731)
---------- ----------- -----------
Income before income taxes............................. 48,105 53,844 67,949
Income tax provision................................... 14,613 11,190 13,001
---------- ----------- -----------
Net income............................................. 33,492 42,654 54,948
Retained earnings--beginning of period................. 615,882 615,882 649,374
---------- ----------- -----------
Retained earnings--end of period....................... $ 649,374 $ 658,536 $ 704,322
---------- ----------- -----------
---------- ----------- -----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-43
<PAGE>
BRITCO, INC.

STATEMENT OF CASH FLOWS

<TABLE>
<CAPTION>
YEAR THREE THREE
ENDED MONTHS MONTHS
APRIL 30, ENDED JULY ENDED JULY
1997 31, 1996 31, 1997
--------- ----------- -----------
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C>
Cash flows from operating activities:
Net income................................................. $ 33,492 $ 42,654 $ 54,948
Adjustments to reconcile net income to net cash flows from
operating activities:
Depreciation and amortization............................ 3,624 905 906
Deferred income taxes.................................... (58,492) -- --
Changes in assets and liabilities:
Accounts receivable...................................... (207,939) 54,057 (510,994)
Inventory................................................ 45,742 (50,238) (35,753)
Prepaid expenses and other assets........................ (71,821) (20,933) 79,601
Accounts payable......................................... 110,488 (25,464) 451,385
Accrued liabilities...................................... 117,475 7,323 (42,916)
--------- ----------- -----------
Net cash flows from operating activities:.................. (27,431) 8,304 (2,823)
Cash flows from investing activities:
Additions to property and equipment...................... (10,230) -- --
--------- ----------- -----------
Net change in cash and cash equivalents.................... (37,661) 8,304 (2,823)
Cash and cash equivalents at beginning of period........... 424,200 424,200 386,539
--------- ----------- -----------
Cash and cash equivalents at end of period................. $ 386,539 $ 432,504 $ 383,716
--------- ----------- -----------
--------- ----------- -----------
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-44
<PAGE>
BRITCO, INC.

NOTES TO FINANCIAL STATEMENTS

1. THE COMPANY

Britco, Inc. ("the Company") is a distributor of office and computer
supplies with operations in Houston and San Antonio, Texas. The Company provides
office and computer products to a wide variety of customers and no one customer
comprises more than 10% of sales.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

CASH AND CASH EQUIVALENTS

Cash equivalents substantially consist of highly liquid securities with
maturity dates of 90 days or less.

REVENUE RECOGNITION

Revenue is recognized upon shipment of products.

INVENTORY

Inventory consists of office and computer supplies and is stated at the
lower of cost or fair market value. Cost is determined using the average cost
method of inventory valuation.

PROPERTY AND EQUIPMENT

Property and equipment, including leasehold improvements, are stated at cost
less accumulated depreciation and amortization. Depreciation is computed on the
straight-line method. The provision for depreciation is based on the estimated
useful lives of equipment, furniture and fixtures (three to five years).

INCOME TAXES

CONCENTRATION OF CREDIT RISK AND FINANCIAL INSTRUMENTS

Financial instruments which potentially subject the Company to concentration
of credit risk consist primarily of accounts receivable. The Company performs
ongoing credit evaluations of its customers and monitors credit risk using
policies and procedures which management considers adequate in the
circumstances. The Company generally does not require collateral for sales on
credit.

In all material respects, the carrying value of the Company's financial
instruments approximates the fair values.

INTERIM FINANCIAL STATEMENTS

The unaudited financial statements as of and for the three months ended July
31, 1996 and 1997 have been prepared in accordance with Rule 10-01 of SEC
Regulation S-X. Consequently, these interim financial statements do not include
all the disclosures required under generally accepted accounting principles.
However, in the opinion of the management, the financial statements presented
herein contain

F-45
<PAGE>
BRITCO, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
all adjustments (consisting only of normal recurring adjustments) necessary to
present fairly the financial position, results of operations and cash flows of
the Company for the periods indicated.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions. These affect the reported amounts of assets, liabilities, revenues
and expenses during the reporting periods. Actual results could differ from
those estimated.

3. RELATED PARTY TRANSACTIONS

For the year ended April 30, 1997, the Company sold, at cost, goods to
affiliated companies of a shareholder of the Company aggregating $213,379.
Receivables related to these sales were collected prior to April 30, 1997.

4. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
APRIL 30,
1997
-----------
<S> <C>
Furniture and equipment.......................................................... $ 86,183
Leasehold improvements........................................................... 28,720
-----------
114,903
Less--Accumulated depreciation................................................... (102,059)
-----------
$ 12,844
-----------
-----------
</TABLE>

The Company operates from leased premises under operating leases expiring
within the next twelve months. Accordingly, future lease commitments are not
material. Management expects these leases will be renewed in the ordinary course
of business. Rental expense for the year ended April 30, 1997 totalled
approximately $64,000.

5. CREDIT FACILITY

At April 30, 1997, the Company had an unused credit line with a bank for
$500,000. Interest associated with this line of credit, if utilized, is at the
bank's prime rate. No borrowings occurred on this line of credit during the year
ended April 30, 1997.

F-46
<PAGE>
BRITCO, INC.

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

6. INCOME TAXES

The provision (benefit) for income taxes consists of federal income taxes.
State taxes are determined on a franchise basis. The provision (benefit) for
income taxes is summarized below:

<TABLE>
<CAPTION>
APRIL 30,
1997
----------
<S> <C>
Current........................................................................... $ 73,105
Deferred.......................................................................... (58,492)
----------
Total............................................................................. $ 14,613
----------
----------
</TABLE>

The deferred income tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
APRIL 30,
1997
---------
<S> <C>
Deferred income tax assets:
Reserves and accruals not currently deductible................................... $ 31,476
---------
---------
Deferred income tax liabilities:
Depreciation..................................................................... $ 4,367
---------
---------
</TABLE>

Deferred tax assets and deferred tax liabilities are included in other
assets and accrued income and other tax liabilities, respectively, in the
accompanying balance sheet. The effective tax rate did not differ materially
from the expected statutory rate. Income taxes paid amounted to $57,935 for the
year ended April 30, 1997.

F-47
<PAGE>
[INSIDE BACK COVER:]

[Architect's color elevation drawing of the Company's office/warehouse
facility in Dayton, Ohio.]

[Drawing caption:]

Miami Computer Supply Corporation's corporate headquarters located in Dayton,
Ohio.

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

NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS.
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY
OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES OR AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES BY ANY
PERSON IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL FOR SUCH PERSON TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES IMPLY THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 8
Use of Proceeds........................................................... 12
Price Range of Common Stock and Dividend Policy........................... 13
Capitalization............................................................ 14
Selected Consolidated Financial Data...................................... 15
Unaudited Pro Forma Financial Data........................................ 17
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................ . 19
Business.................................................................. 25
Management................................................................ 36
Certain Transactions...................................................... 45
Principal Stockholders.................................................... 47
Description of Capital Stock.............................................. 49
Restrictions on Acquisition of the Company................................ 50
Shares Eligible for Future Sale........................................... 53
Underwriting.............................................................. 55
Legal Matters............................................................. 56
Independent Accountants................................................... 56
Available Information..................................................... 57
Additional Information.................................................... 57
Index to Financial Statements............................................. F-1
</TABLE>

2,100,000 SHARES

[LOGO]

MIAMI COMPUTER SUPPLY
CORPORATION

COMMON STOCK

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

PROSPECTUS

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

, 1998

FRIEDMAN, BILLINGS, RAMSEY & CO., INC.

WILLIAM BLAIR & COMPANY

MORGAN KEEGAN & COMPANY, INC.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following statement sets forth the estimated amount of expenses (other
than underwriting discounts and commissions) to be borne by the Registrant in
connection with the Offering.

<TABLE>
<CAPTION>
SEC filing fees................................................ $12,425.00
<S> <C>
NASD fees...................................................... 4,712.00
Nasdaq 10b-17 fees............................................. 17,500.00
Printing, postage and mailing.................................. 95,000.00
Legal fees and expenses........................................ 120,000.00
Blue Sky fees and expenses..................................... 5,000.00
Accounting fees and expenses................................... 120,000.00
Miscellaneous fees and expenses................................ 225,363.00
----------
Total.......................................................... $600,000.00
----------
----------
</TABLE>

* To be filed by amendment.

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

The Company is an Ohio corporation. Section 1701.59 of the Ohio General
Corporation law (the "OGCL") states:

"(B) A director shall perform his duties as a director, including his duties
as a member of any committee of the directors upon which he may serve, in good
faith, in a manner he reasonably believes to be in or not opposed to the best
interests of the corporation, and with the care that an ordinarily prudent
person in a like position would use under similar circumstances. In performing
his duties, a director is entitled to rely on information, opinions, reports, or
statements, including financial statements and other financial data, that are
prepared or presented by:

(1) One or more directors, officers, or employees of the corporation who
the director reasonably believes are reliable and competent in the matters
prepared or presented;

(2) Counsel, public accountants, or other persons as to matters that the
director reasonably believes are within the person's professional or expert
competence;

(3) A committee of the directors upon which he does not serve, duly
established in accordance with a provision of the articles or the
regulations, as to matters within its designated authority, which committee
the director reasonably believes to merit confidence.

(1) A director shall not be found to have violated his duties under
division (B) of this section unless it is proved by clear and convincing
evidence that the director has not acted in good faith, in a manner he
reasonably believes to be in or not opposed to the best interests of the
corporation, or with the care that an ordinarily prudent person in a like
position would use under similar circumstances in any action brought against
a director, including actions involving or affecting any of the following:

(a) A change or potential change in control of the corporation,
including a determination to resist a change or potential change in
control made pursuant to division (F) (7) of section 1701.13 of the
Revised Code.

(b) A termination or potential termination of his service to the
corporation as a director;

II-1
<PAGE>
(c) His service in any other position or relationship with the
corporation.

(2) A director shall not be considered to be acting in good faith if he
has knowledge concerning the matter in question that would cause reliance on
information, opinions, reports, or statements that are prepared or presented
by the persons described in divisions (B)(1) to (3) of this section to be
unwarranted.

(3) Nothing contained in this division limits relief available under
section 1701.60 of the Revised Code.

(D) A director shall be liable in damages for any action he takes or fails
to take as a director only if it is proved by clear and convincing evidence in a
court of competent jurisdiction that his action or failure to act involved an
act or omission undertaken with deliberate intent to cause injury to the
corporation or undertaken with reckless disregard for the best interests of the
corporation. Nothing contained in this division affects the liability of
directors under section 1701.95 of the Revised Code or limits relief available
under section 1701.60 of the Revised Code. This division does not apply if, and
only to the extent that, at the time of a director's act or omission that is the
subject of complaint, the articles or the regulations of the corporation state
by specific reference to this division that the provisions of this division do
not apply to the corporation.

(E) For purposes of this section, a director, in determining what he
reasonably believes to be in the best interests of the corporation, shall
consider the interests of the corporation's shareholders and, in his discretion,
may consider any of the following:

(1) The interests of the corporation's employees, suppliers, creditors,
and customers;

(2) The economy of the state and nation;

(3) Community and societal considerations;

(4) The long-term as well as short-term interests of the corporation and
its shareholders, including the possibility that these interests may be best
served by the continued independence of the corporation.

(F) Nothing contained in division (C) or (D) of this section affects the
duties of either of the following:

(1) A director who acts in any capacity other than his capacity as a
director;

(2) A director of a corporation that does not have issued and
outstanding shares that are listed on a national securities exchange or are
regularly quoted in an over-the-counter market by one or more members of a
national or affiliated securities association, who votes for or assents to
any action taken by the directors of the corporation that, in connection
with a change in control of the corporation, directly results in the holder
or holders of a majority of the outstanding shares of the corporation
receiving a greater consideration for their shares than other shareholders."

Section 1701.13(E) of the OGCL states:

"(E) (1) A corporation may indemnify or agree to indemnify any person who was
or is a party, or is threatened to be made a party, to any threatened,
pending, or completed action, suit or proceeding, whether civil, criminal,
administrative, or investigative, other than an action by or in the right of
the corporation, by reason of the fact that he is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, trustee, officer, employee,
member, manager, or agent of another corporation, domestic or foreign,
nonprofit or for profit, a limited liability company, or a partnership,
joint venture, trust, or other enterprise, against expenses, including
attorney's fees, judgments, fines, and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding, if he acted in good

II-2
<PAGE>
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any criminal action
or proceeding, if he had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit, or proceeding by judgment,
order, settlement, or conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of it self, create a presumption that the person did
not act in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, he had reasonable cause to believe that his
conduct was unlawful.

(2) A corporation may indemnify or agree to indemnify any person who was
or is a party, or is threatened to be made a party to any threatened,
pending, or completed action or suit by or in the right of the corporation
to procure a judgment in its favor, by reason of the fact that he is or was
a director, officer, employee, or agent of the corporation, or is or was
serving at the request of the corporation, as a director, trustee, officer,
employee, member, manager, or agent of another corporation, domestic or
foreign, nonprofit or for profit, a limited liability company, or a
partnership, joint venture, trust, or other enterprise, against expenses,
including attorney's fees, actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit, if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any of the following:

(a) Any claim, issue, or matter as to which such person is adjudged
to be liable for negligence or misconduct in the performance of his duty
to the corporation unless, and only to the extent that, the court of
common pleas of the court in which such action or suit was brought
determines, upon application, that, despite the adjudication of
liability, but in view of all the circumstances of the case, such person
is fairly and reasonably entitled to indemnity for such expenses as the
court of common pleas or such other court shall deem proper;

(b) Any action or suit in which the only liability asserted against a
director is pursuant to section 1701.95 of the Revised Code.

(3) To the extent that a director, trustee officer, employee, member,
manager, or agent has been successful on the merits or otherwise in defense
of any action, suit, or proceeding referred to in division (E)(1) or (2) of
this section, or in defense of any claim, issue, or matter therein, he shall
be indemnified against expenses, including attorney's fees, actually and
reasonably incurred by him in connection with the action, suit, or
proceeding.

(4) Any indemnification under division (E)(1) or (2) of this section,
unless ordered by a court, shall be made by the corporation only as
authorized in the specific case, upon a determination that indemnification
of the director, trustee, officer, employee, member, manager or agent is
proper in the circumstances because he has met the applicable standard of
conduct set forth in division (E)(1) or (2) of this section. Such
determination shall be made as follows:

(a) By a majority vote of a quorum consisting of directors of the
indemnifying corporation who were not and are not parties to or
threatened with the action, suit, or proceeding referred to in division
(E)(1) or (2) of this section;

(b) If the quorum described in division (E)(4)(a) of this section is
not obtainable or if a majority vote of a quorum of disinterested
directors so directs, in a written opinion by independent legal counsel
other than an attorney, or a firm having associated with it an attorney,
who has been retained by or who has performed services for the
corporation or any person to be indemnified within the past five years;

(d) By the court of common pleas or the court in which the action,
suit, or proceeding referred to in division (E)(1) or (2) of this section
was brought.

II-3
<PAGE>
Any determination made by the disinterested directors under division
(E)(4)(a) or by independent legal counsel under division (E)(4)(b) of this
section shall be promptly communicated to the person who threatened or brought
the action or suit by or in the right of the corporation under division (E)(2)
of this section, and, within ten days after receipt of such notification, such
person shall have the right to petition the court of common pleas or the court
in which such action or suit was brought to review the reasonableness of such
determination.

(5) (a) Unless at the time of a director's act or omission that is the
subject of an action, suit, or proceeding referred to in division (E)(1)
or (2) of this section, the articles or the regulations of a corporation
state, by specific reference to this division, that the provisions of
this division do not apply to the corporation and unless the only
liability asserted against a director in an action, suit, or proceeding
referred to in division (E)(1) or (2) of this section, the articles or
the regulations of a corporation state, by specific reference to this
division, that the provisions of this division do not apply to the
corporation and unless the only liability asserted against a director in
an action, suit, or proceeding referred to in division (E)(1) or (2) of
this section is pursuant to section 1701.95 of the Revised Code,
expenses, including attorney's fees, incurred by a director in defending
the action, suit, or proceeding shall be paid by the corporation as they
are incurred, in advance of the final disposition of the action, suit, or
proceeding, upon receipt of an undertaking by or on behalf of the
director in which he agrees to do both of the following:

(i) Repay such amount if it is provided by clear and convincing
evidence in a court of competent jurisdiction that his action or
failure to act involved an act or omission undertaken with deliberate
intent to cause injury to the corporation or undertaken with reckless
disregard for the best interests of the corporation;

(ii) Reasonably cooperate with the corporation concerning the
action, suit, or proceeding.

(b) Expenses, including attorney's fees, incurred by a director,
trustee, officer, employee, member manager, or agent in defending any
action, suit, or proceeding referred to in division (E)(1) or (2) of this
section, may be paid by the corporation as they are incurred, in advance
of the final disposition of the action, suit, or proceeding, as
authorized by the directors in the specific case, upon the receipt of an
undertaking by or on behalf of the director, trustee, officer employee,
member, manager, or agent to repay such amount, if it ultimately is
determined that he is not entitled to be indemnified by the corporation.

(6) The indemnification authorized by this section shall not be
exclusive of, and shall be in addition to, any other rights granted to those
seeking indemnification under the articles, the regulations, any agreement,
a vote of shareholders or disinterested directors, or otherwise, both as to
action in their official capacities and as to action in another capacity
while holding their offices or positions, and shall continue as to a person
who has ceased to be a director, trustee, officer, employee, member,
manager, or agent and shall inure to the benefit of the heirs, executors,
and administrators of such a person.

(7) A corporation may purchase and maintain insurance or furnish similar
protection, including, but not limited to, trust funds, letters of credit,
or self-insurance, on behalf of or for any person who is or was a director,
officer, employee, or agent of the corporation, or is or was serving at the
request of the corporation as a director, trustee, officer, employee,
member, manager, or agent of another corporation, domestic or foreign,
nonprofit or for profit, a limited liability company, or a partnership,
joint venture, trust, or other enterprise, against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not the corporation would have the power to
indemnify him against such liability under this section. Insurance may be
purchased from or maintained with a person in which the corporation has a
financial interest.

II-4
<PAGE>

(8) The authority of a corporation to indemnify persons pursuant to
division (E)(1) or (2) of this section does not limit the payment of
expenses as they are incurred, indemnification, insurance, or other
protection that may be provided pursuant to divisions (E)(5), (6), and (7)
of this section. Divisions (E)(1) and (2) of this section do not create any
obligation to repay or return payments made by the corporation pursuant to
division (E)(5), (6), or (7).

(9) As used in division (E) of this section, "corporation" includes all
constituent entities in a consolidation or merger and the new or surviving
corporation, so that any person who is or was a director, officer, employee,
trustee, member, manager, or agent of such a constituent entity, or is or
was serving at the request of such constituent entity as a director,
trustee, officer, employee, member, manager, or agent or another
corporation, domestic or foreign, nonprofit or for profit, a limited
liability company, or a partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with respect
to the new or surviving corporation as he would if he had served the new or
surviving corporation in the same capacity."

The Amended and Restated Articles of Incorporation ("Articles") of the
Company also limit the liability of, and provide indemnification to, directors
and officers of the Company. Article VIII of the Company's Articles states:

"A. LIMITATION OF LIABILITY. No director shall be personally liable to the
Corporation or its shareholders for monetary damages for any act or omission by
such director as a director; provided that a director's liability shall not be
limited or eliminated to the extent that it is proved by clear and convincing
evidence in a court of competent jurisdiction that his action or failure to act
involved an act or omission undertaken with deliberate intent to cause injury to
the Corporation, or was undertaken with reckless disregard for the best
interests of the Corporation. No amendment to or repeal of this Article VIII.A.
shall apply to or have any effect on the liability or alleged liability of any
director of the Corporation for or with respect to any acts or omissions of such
director occurring prior to such amendment.

B. INDEMNIFICATION. The Corporation shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative,
arbitrative or investigative, by reason of the fact that such person is or was a
director, trustee, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, trustee, officer,
employee, member, manager or agent of another corporation, domestic or foreign,
nonprofit or for profit, a limited liability company, partnership, joint
venture, trust or other enterprise or employee benefit plan, against liability
and expenses (including court costs and attorney's fees), judgments, fines,
excise taxes and amounts paid in satisfaction, settlement or compromise actually
and reasonably incurred by such person in connection with such action, suit or
proceeding to the full extent authorized by Section 1701.13 of the OGCL or any
successor provision thereto.

C. ADVANCEMENT OF EXPENSES. Reasonable expenses incurred by a director,
officer, employee or agent of the Corporation in defending an action, suit or
proceeding described in Article VIII.B. shall be paid by the Corporation as they
are incurred, in advance of the final disposition of such action, suit or
proceeding, as authorized by the Board of Directors only upon receipt of written
affirmation by or on behalf of such person in which he agrees to do both of the
following: (i) repay such amount if it is proved by clear and convincing
evidence in a court of competent jurisdiction that his action or failure to act
involved an act or omission undertaken with the deliberate intent to cause
injury to the Corporation or undertaken with reckless disregard for the best
interests of the Corporation, and (ii) reasonably cooperate with the Corporation
concerning the action, suit or proceeding.

D. OTHER RIGHTS AND REMEDIES. The indemnification provided by this Article
VIII shall not be deemed to exclude any other rights to which those seeking
indemnification or advancement of expenses may be entitled under the
Corporation's Articles of Amendment, any insurance or other agreement, trust
fund, letter of credit, surety bond, vote of shareholders or disinterested
directors or otherwise, both as to actions in their official capacity and as to
actions in another capacity while holding such office, and shall

II-5
<PAGE>
continue as to a person who has ceased to be a director, officer, employee,
member, manager or agent and shall inure to the benefit of the heirs, executors
and administrators of such person; provided that no indemnification shall be
made to or on behalf of an individual in respect of any of the following: (i)
any claim, issue, or matter as to which such person is adjudged to be liable for
negligence or misconduct in the performance of his duty to the Corporation
unless, and only to the extent that, a court of competent jurisdiction
determines that, despite the adjudication of liability, but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses as the court shall deem proper; or (ii) any action
or suit in which the only liability asserted against a director is pursuant to
Section 1701.95 of the OGCL or any successor thereto.

E. INSURANCE. Upon resolution passed by the Board of Directors, the
Corporation may purchase and maintain insurance on behalf of any person who is
or was a director, officer, employee, or agent of the Corporation, or was
serving at the request of the Corporation as a director, officer, employee,
member, manager or agent of another corporation, domestic or foreign, nonprofit
or for profit, a limited liability company, partnership, joint venture, trust or
another enterprise or employee benefit plan, against any liability asserted
against him or incurred by him in any such capacity, or arising out of his
status, whether or not the Corporation would have the power to indemnify him
against such liability under the provisions of this Article or the OGCL.

F. MODIFICATION. The duties of the Corporation to indemnify and to advance
expenses to a director, officer, employee or agent provided in this Article VIII
shall be in the nature of a contract between the Corporation and each such
director, officer, employee or agent and no amendment or repeal of any provision
of this Article VIII shall alter, to the detriment of such director, officer,
employee or agent, the right of such person to the advance of expenses or
indemnification related to a claim based on an act or failure to act which took
place prior to such amendment or repeal."

Article X of the Company's Code of Regulations states:

"(a) A director of the Corporation shall not be personally liable for
monetary damages for action taken, or any failure to take action, as a
director, to the extent set forth in the Corporation's Amended and Restated
Articles of Incorporation, which provisions are incorporated herein with the
same affect as if they were set forth herein.

(b) The Corporation shall indemnify any person who is a director,
officer, employee or agent of the Corporation to the extent set forth in the
Corporation's Amended and Restated Articles of Incorporation, which
provisions are incorporated herein with the same affect as if they were set
forth herein."

In addition, the Company maintains a directors and officers liability
insurance policy relating to certain actions or omissions which may be taken, or
omitted to be taken, by the directors and officers of the Company, as well as a
policy which insures against errors and omissions in the offering documents
relating to the offer and sale of the Common Stock to the public.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

On April 30, 1997, the Company purchased certain specified assets and
assumed certain liabilities of Imperial Data Supply Corporation, a Washington
Corporation ("IDSC"). The Company issued 106,383 shares of its Common Stock to
John Keegan, the President and a stockholder of IDSC, Valerie Keegan, the wife
of John Keegan a stockholder of IDSC, Melva Potter, a stockholder of IDSC and
the William H. Potter Testamentary Trust, also a stockholder of IDSC, in
exchange for said assets.

On July 1, 1997, the Company acquired Force 4 D.P. Supplies, Inc., an Oregon
corporation ("Force 4"), by means of Force 4's merger with and into MCSC Oregon
Acquisition Corporation, a subsidiary of the Company organized in Oregon. The
Company issued 129,730 shares of its Common Stock

II-6
<PAGE>

to Daniel W. Wisdom, President and sole stockholder of Force 4, in exchange for
100% of the issued and outstanding common stock of Force 4.

On July 15, 1997, the Company acquired Data Associates, Inc., a Georgia
corporation ("Data"), by means of Data's merger with and into MCSC Georgia
Acquisition Corporation, a subsidiary of the Company organized in Georgia. The
Company issued 154,996 shares of its Common Stock to Gerald G. Gould, President
and 50.1% stockholder of Data, and J. Philip Crone, Vice President and 49.9%
stockholder of Data, in exchange for 100% of the issued and outstanding common
stock of Data.

On October 8, 1997, the Company acquired NTI Data Products, Inc. a New
Hampshire corporation ("NTI"), by means of NTI's merger with and into MCSC New
Hampshire Acquisition Corporation, a subsidiary of the Company organized in New
Hampshire. The Company issued 137,501 shares of its Common Stock to Thomas R.
James, President and a stockholder of NTI, and Stephen M. Mulloy, Vice President
and a stockholder of NTI, in exchange for 100.0% of the issued and outstanding
common stock of NTI.

On December 5, 1997, the Company acquired Britco, Inc., a Texas corporation
("Britco"), by means of Britco's merger with and into MCSC Texas Acquisition
Corporation, a subsidiary of the Company organized in Texas. The Company issued
275,000 shares of its Common Stock to Gretchen K. Ferguson, the President and a
stockholder of Britco, and Charles L. Ferguson, the Vice President and a
stockholder of Britco, in exchange for 100.0% of the issued and outstanding
common stock of Britco.

On December 31, 1997, the Company acquired TBS Printware Corporation, a
California corporation ("TBS"), by means of TBS's merger with and into MCSC
Fremont Acquisition Corporation, a subsidiary of the Company organized in
California. The Company issued 315,000 shares of its Common Stock to Robert
Salomon, a director, the Chief Executive Officer and a stockholder of TBS, John
McCoubrie, a director, the President and a stockholder of TBS and Lothar Rowe, a
director and a stockholder of TBS in exchange for 100.0% of the issued and
outstanding common stock of TBS.

On January 15, 1998, the Company acquired Minnesota Western/Creative Office
Products, Inc., a California corporation ("MW"), by means of MW's merger with
and into MCSC California Acquisition Corporation, a subsidiary of the Company
organized in California. The Company issued 1,322,555 shares of its Common Stock
to H. Clark Gilson, a director, the President and a stockholder of MW,
individually and together with Kay A. Gilson, his spouse, as Trustees of the
Gilson Trust, dated November 5, 1993, Ruy J. Pereira, a director, a Vice
President and a stockholder of MW, individually and as Trustee of the Pereira
Trust, dated November 12, 1992, Mr. Larry R. Goodman, a director, a Vice
President and a stockholder of MW, individually and together with Linda D.
Goodman, his spouse, as Trustees of the Goodman Trust, dated February 7, 1994,
in exchange for 100.0% of the issued and outstanding common stock of MW.

On March 3, 1998, the Company acquired Computer Showcase, Inc., a Georgia
corporation ("CSI"), by means of CSI's merger with and into MCSC Bulldog
Acquisition Corporation, a subsidiary of the Company organized in Georgia. The
Company issued 180,269 shares of its Common Stock to Deborah Smith, a director,
the President and a stockholder of CSI and Jerrold H. Smith, a director, the
Vice President and a stockholder of CSI, in exchange for 100.0% of the issued
and outstanding common stock of CSI.

Each of the foregoing transactions was exempt from the registration
requirements of the Securities Act under Section 4(2) thereof and Rule 506 of
Regulation D of the General Rules and Regulations promulgated thereunder
("Regulation D"). The securities in each of the foregoing acquisitions were
privately placed with individuals, who represented their status as accredited
investors as that term is defined in Rule 501(a) of Regulation D.

II-7
<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

<TABLE>
<CAPTION>
EXHIBIT NO. INDEX TO EXHIBITS DESCRIPTION
- ------------ ------------------------------------------------------------------------------------------------------
<C> <S>
1.0 Underwriting Agreement*.

3.1 Amended and Restated Articles of Incorporation of Miami Computer Supply Corporation.(1)

3.2 Amended and Restated Code of Regulations of Miami Computer Supply Corporation.(1)

4.0 Form of Stock Certificate of Miami Computer Supply Corporation.(1)

5.0 Form of opinion of Elias, Matz, Tiernan & Herrick L.L.P. re: legality.

10.1 Lease by and between Draft Partnership and Miami Computer Supply, Inc. dated October 26, 1995.(1)

10.2 Lease by and between John Schwarz, Sr., Marcella Schwarz, John and Robert T. Schwarz and Miami
Computer Supply, Inc., dated June 30, 1994.(1)

10.3 Miami Computer Supply, Inc. Profit Sharing Plan.(1)

10.4 Miami Computer Supply, Inc. Section 125C Cafeteria Plan.(1)

10.5 Credit Facility between Miami Computer Supply, Inc. and National City Bank, as Administrative Agent,
and the Named Lending Institutions, dated January 8, 1998.(2)

10.5 (a) Amendment No. 1 to Credit Facility dated February 13, 1998.(2)

10.5 (b) Amendment No. 2 to the Credit Facility dated May 15, 1998.**

10.6 Epson Authorized Reseller Agreement dated June 28, 1995.(1)

10.7 Proxima Reseller Agreement dated May 29, 1996.(1)

10.8 Hewlett Packard U.S. Reseller Channel Agreement as amended January 1, 1996.(1)

10.9 Lexmark Dealer Agreement dated November 1986.(1)

10.10 3M Authorized Distributor Agreement dated January 27, 1987.(1)

10.11 Employment Agreement by and between Miami Computer Supply, Inc., and Thomas C. Winstel dated May 30,
1996.(1)

10.12 Employment Agreement by and between Miami Computer Supply, Inc. and Richard A. Newkold dated May 30,
1996.(1)

10.13 Employment Agreement by and between Miami Computer Supply, Inc. and Roger E. Turvy dated May 30,
1996.(1)

10.14 Employment Agreement by and between Miami Computer Supply, Inc. and Michael E. Peppel dated May 30,
1996.(1)

10.15 Employment Agreement by and between Miami Computer Supply, Inc. and John C. Huffman III dated May 30,
1996.(1)

10.16 Split Dollar Agreement by and between Miami Computer Supply, Inc. and Thomas C. Winstel dated December
1, 1995.(1)

10.17 Split Dollar Agreement by and between Miami Computer Supply, Inc. and Richard A. Newkold dated
December 1, 1995.(1)

10.18 Split Dollar Agreement by and between Miami Computer Supply, Inc. and Roger E. Turvy dated December 1,
1995.(1)

10.19 Miami Computer Supply Corporation 1996 Stock Option Plan.(1)

10.20 Miami Computer Supply Corporation Non-employee Director Stock Option Plan.(1)
</TABLE>

II-8
<PAGE>

10.22 Miami Computer Supply Corporation 1998 Employee Payroll Deduction Stock Purchase Plan.**

10.23 Miami Computer Supply 1998 Stock Option Plan.**

10.24 Agreement and Plan of Reorganization by and between Miami Computer Supply Corporation, MCSC Texas
Acquisition Corporation, Britco, Inc., Gretchen K. Ferguson and Charles L. Ferguson dated November
26, 1997.(4)

10.25 Agreement and Plan of Reorganization by and among Miami Computer Supply Corporation, MCSC California
Acquisition Corporation, Minnesota Western/Creative Office Products, Inc. and the Named Stockholders
dated November 21, 1997.(5)

10.26 Agreement and Plan of Reorganization by and among Miami Computer Supply Corporation, MCSC Fremont
Acquisition Corporation, TBS Printware Corporation and the Named Stockholders dated December 23,
1997.(6)

10.27 Lease Agreement by and between 921 Parker Street, a California General Partnership, and Minnesota
Western/Creative Office Products, Inc. dated July, 1994.

10.28 Lease Agreement by and between 180 S. Prospect Partners and Minnesota Western/Creative Office
Products, Inc. dated August 26, 1996.

21.0 Subsidiaries of the Registrant.**

23.1 Consent of Elias, Matz, Tiernan & Herrick L.L.P.(7)

23.2 Consent of Price Waterhouse LLP.

24.0 Power of Attorney.**

27.0 Financial Data Schedule.(8)
</TABLE>

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

* To be filed by amendment.

** Previously filed.

(1) Incorporated by reference from the Company's Registration Statement on Form
S-1 as filed with the Commission on November 11, 1996, SEC File No.
333-12689.

(2) Incorporated by reference from the Company's Registration Statement on Form
S-3 as filed with the Commission on March 5, 1998, SEC File No. 333-36299.

(3) Incorporated by reference from the Company's Form 8-K as filed with the
Commission on January 2, 1998, SEC File No. 000-21561.

(4) Incorporated by reference from the Company's Current Report on Form 8-K as
filed with the Commission on December 15, 1997, SEC File No. 000-21561.

(5) Incorporated by reference from the Company's Current Report on Form 8-K as
filed with the Commission on January 30, 1998, SEC File No. 000-21561.

(6) Incorporated by reference from the Company's Current Report on Form 8-K as
filed with the Commission on February 12, 1998, SEC File No. 000-21561.

(7) Incorporated by reference to Exhibit No. 5.

(8) Incorporated by reference from the Company's Quarterly Report on Form 10-Q
for the three months ended March 31, 1998, SEC File No. 000-21561.

II-9
<PAGE>
(b) FINANCIAL STATEMENT SCHEDULES

All schedules have been omitted as not applicable or not required under the
rules of Regulation S-X.

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes that:

(a) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.

(b) For the purpose of determining any liability under the Securities Act,
each post-effective amendment that contains a form of prospectus shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.

(c) The undersigned Registrant hereby undertakes to provide to the
underwriter at the closing specified in the underwriting agreement,
certificates in such denominations and registered in such names as
required by the underwriter to permit prompt delivery to each purchaser.

(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.

II-10
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Form S-1 Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Dayton, Ohio on
June 3, 1998.

<TABLE>
<S> <C> <C>
MIAMI COMPUTER SUPPLY CORPORATION

By: /s/ MICHAEL E. PEPPEL
-----------------------------------------
Michael E. Peppel
President and Chief Executive Officer
</TABLE>

NAME TITLE DATE
- ------------------------------ -------------------------- -------------------

/s/ ANTHONY W. LIBERATI*
- ------------------------------ Chairman of the Board June 3, 1998
Anthony W. Liberati

Director, President and
/s/ MICHAEL E. PEPPEL Chief Executive Officer
- ------------------------------ (Principal executive June 3, 1998
Michael E. Peppel officer)

/s/ ROBERT G. HECHT*
- ------------------------------ Director and Vice Chairman June 3, 1998
Robert G. Hecht of the Board

/s/ HARRY F. RADCLIFFE*
- ------------------------------ Director and Treasurer June 3, 1998
Harry F. Radcliffe

/s/ THOMAS C. WINSTEL
- ------------------------------ Director, Secretary and June 3, 1998
Thomas C. Winstel Vice President

/s/ IRA H. STANLEY Vice President-Finance
- ------------------------------ (Principal financial and June 3, 1998
Ira H. Stanley accounting officer)

- ------------------------------
*By: Michael E. Peppel,
attorney-in-fact

II-11

<PAGE>

EXHIBIT 5.0

<PAGE>

[Form of EMTH Legal Opinion]

June __, 1998

Board of Directors
Miami Computer Supply Corporation
4750 Hempstead Station Drive
Dayton, Ohio 45420

Gentlemen:

We have acted as special counsel to Miami Computer Supply Corporation
(the "Company") in connection with the preparation and filing by the Company
with the Securities and Exchange Commission ("SEC") of a Registration
Statement on Form S-1 ("Form S-1") under the Securities Act of 1933, as
amended (the "Act"), relating to the issuance of up to an aggregate of
2,415,000 shares of common stock, no par value per share (the "Common
Stock"), of the Company, of which (a) 2,100,000 shares will be sold in a
public offering by Friedman, Billings, Ramsey & Co., Inc., Arlington,
Virginia, William Blair & Company, L.L.C., Chicago, Illinois, and Morgan
Keegan & Company, Inc., Memphis, Tennessee, the underwriters (the
"Underwriters") named in the underwriting agreement dated _________, 1998
(the "Underwriting Agreement"), on a firm commitment basis, and (b) 315,000
shares will be purchased by the Underwriters from the Company solely to cover
over-allotments, if any. Capitalized terms defined in the Form S-1 and not
otherwise defined herein are used herein with the meanings as so defined.

In so acting, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of the Form S-1 and such corporate
records, agreements, documents and other instruments, including the
Underwriting Agreement, and such certificates or comparable documents of
public officials and of officers and representatives of the Company, and have
made such inquiries of such officers and representatives, as we have deemed
relevant or necessary as a basis for the opinions hereinafter set forth.

In such examination, we have assumed without independent verification
the genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents. As to
all questions of fact material to this opinion, we have relied upon
certificates or comparable documents of officers of the Company, and we have
also relied upon the representations and warranties of the Company contained
in the Underwriting Agreement and have relied upon the accuracy and
completeness thereof without independent verification. Certain partners of
this firm are members of an investment partnership which owns 20.4% of
Pittsburgh Investment Group LLC ("LLC").

<PAGE>

Miami Computer Supply Corporation
June___, 1998
Page 2

LLC owns, as of the date of this letter 4.78% of the issued and outstanding
Common Stock of the Company. Members of this firm also individually own
approximately 240,540 shares of Common Stock of the Company.

Based on the foregoing, and subject to the qualifications stated herein,
as of the date hereof, we are of the opinion that:

i. The 2,100,000 shares of Common Stock of the Company to be issued and
sold by the Company have been duly authorized and, when issued and sold as
contemplated in the Form S-1 and the Underwriting Agreement upon receipt of
the required consideration therefor, will be validly issued, fully paid and
non-assessable.

ii. The 315,000 shares of Common Stock of the Company to be sold by the
Company upon exercise of the Underwriters' over-allotment option have been
duly authorized and, when issued and sold as contemplated in the Form S-1 and
the Underwriting Agreement upon receipt of the required consideration
therefor, will be validly issued, fully paid and non-assessable.

We hereby consent to the filing of this opinion as an exhibit to the
Form S-1 and to the reference to our firm under the caption "Legal Matters"
in the Prospectus included therein.

Very truly yours,

ELIAS, MATZ, TIERNAN & HERRICK L.L.P.

By:
--------------------------------------
Jeffrey A. Koeppel, a Partner

<PAGE>

LEASE AGREEMENT

LEASE AGREEMENT entered into effective as of July __, 1994 between 921
Parker Street, a California General Partnership ("Lessor") and Minnesota
Western/Creative Office Products, Inc., a California corporation ("Lessee").

RECITALS:

A. Lessor is the owner of that certain real property commonly known as
905, 909 and 921 Parker Street and 2533 Seventh Street, Berkeley, California,
which property is more particularly described on Exhibit A attached hereto and
incorporated herein by this reference (the "Property").

B. Lessee wishes to lease Property from Lessor and Lessor wishes to lease
the Property to Lessee on the terms set forth in this Lease Agreement (the
"Lease").

AGREEMENT:

NOW, THEREFORE, the parties hereby agree as follows:

1. AGREEMENT TO LEASE. Lessor hereby leases the Property to Lessee and
Lessee leases the Property from Lessor on the terms and conditions set forth
below.

2. TERM. The lease term shall commence on the effective date of this
Lease and shall continue for approximately ten years, until June 30, 2004.

3. RENT. Lessee agrees to pay Lessor rent in the amount of $15,000 per
month which shall be due and payable on the first day of each calendar month
commencing August 1, 1994 and continuing for each calendar month thereafter
during the lease term. The rent for the period commencing with the effective
date of this Lease and ending July 31, 1994 shall be prorated based on the
monthly rent and shall be due and payable upon execution of this Lease.

4. RENT INCREASE. The monthly rent provided for herein shall be
increased commencing with the rental payment which is due August 1, 1999 and
continuing for each rental payment due thereafter during the term of this Lease.
The monthly rent which shall be payable commencing on August 1, 1999, shall be
the same as the monthly rental amount payable during the first five years of
this Lease, $15,000, as increased by the same percentage as the increase in the
Consumer Price Index prepared by the U.S. Bureau of Labor Statistics For Pacific
Cities And U.S. City Average, All Items, All Urban Consumers, for the San
Francisco-Oakland-San Jose Area (the "Index") between June, 1994 and June,

<PAGE>

Lease Agreement
Page 2

1999. Thus, for example, if the Index for June 1994 is 159.3 and the Index for
June, 1999 is 193.6, then the monthly rent payable commencing August 1, 1999
shall be $18,230, determined as follows:

$15,000 x 193.6 = $18,230
-----
159.3

Upon the expiration of the lease term, the Lease shall terminate and be of no
further force or effect.

5. SECURITY DEPOSIT. Lessee shall not be required to provide a security
deposit, provided, however, that if Lessee is delinquent in the payment of rent
by more than 15 days on any occasion, Lessor may require Lessee to pay to Lessor
a security deposit in the amount of two months' rent at the monthly rental in
effect at the time of the default by delivering written notice to Lessee.

6. MAINTENANCE, INSURANCE AND PROPERTY TAXES. This Lease is a "triple
net lease" and Lessee shall pay all maintenance expenses, insurance premiums and
property taxes associated with the Property or required by this Lease. These
amounts shall be paid directly by the Lessee to the appropriate parties and,
upon request, receipts will be provided to Lessor to substantiate payment.
Lessee hereby agrees to maintain the Property in the condition in which it
receives the Property at the commencement of the Lease, reasonable and ordinary
wear and tear excepted.

7. INSURANCE. Lessee shall obtain standard liability insurance coverage
on the Property in the amount of $3,000,000 and shall provide Lessor with an
insurance certificate naming Lessor as an additional insured. Lessee shall
obtain standard fire and casualty insurance coverage on the Property insuring
the improvements for their full replacement cost and shall provide Lessor with
an insurance certificate naming Lessor as an additional insured.

8. TENANT IMPROVEMENTS. Any tenant improvements will revert to Lessor at
the termination of the Lease, except for furniture and other personal property
items which are not fixtures and which can be removed without damage to the
Property. No alterations or improvements to the Property will be made by Lessee
without the prior written consent of Lessor. As a condition to approving any
improvements or alterations, Lessor may require that the Property be restored to
its original condition upon expiration of the Lease and that Lessee remove such
alterations or improvements and repair any damage caused by such removal at
Lessee's expense.

9. SUBORDINATION. In the event Lessor desires to finance the Property,
Lessee agrees to subordinate its interest under this Lease to the lender's first
deed of trust and promissory note. Lessee agrees to execute and deliver any
standard form subordination agreement prepared by the lender at the time of such
financing. This subordination requirement shall not relieve Lessor of any
obligations hereunder to Lessee nor shall it deprive Lessee of any claims Lessee
may have

<PAGE>

Lease Agreement
Page 3

against Lessor for damages in the event that this Lease is terminated by the
lender because of a default by Lessor and a foreclosure against the Property
under the lender's first deed of trust.

10. DAMAGE OR DESTRUCTION OF PROPERTY. In the event that any portion of
the Property is damaged or destroyed so as to render the Property unusable by
Lessee, Lessee may elect to rebuild or repair the Property to its original
condition at its own expense, using the available insurance proceeds, and
continue the terms of the Lease or to terminate the Lease and pay the entire
proceeds of the fire and casualty insurance policy to Lessor as compensation for
damage suffered by Lessor. Notwithstanding the foregoing, in the event that the
damage to the Property renders not more than 30% of the inside floor space of
the Property unusable by Lessee, Lessee must repair the Property and the Lease
shall continue without abatement of rent. In the event that Lessee elects to
terminate the Lease as provided in this paragraph, rent shall be prorated to the
date of destruction. Lessee must deliver its written election to terminate this
Lease to Lessor within 30 days after the date of damage to the Property or
Lessee will be deemed to have waived the election.

11. ACCESS TO PROPERTY. Lessor may have access to the Property at all
reasonable times during regular business hours or at other times upon 48 hours'
advance notice for purposes of inspecting the Property to determine that Lessee
is fulfilling the terms of this Lease.

12. DEFAULT. In the event that Lessee defaults in the performance of any
of its obligations under this Lease, including without limitation the obligation
to pay rent to Lessor and to maintain the Property, pay liability and fire and
casualty insurance premiums and pay property taxes, Lessor may, after 15 days'
written notice to Lessee of such default and failure of Lessee to cure such
default within such 15-day period, terminate Lessee's right to possession of the
Property and seek to find a suitable replacement tenant for the Property and/or
pay such expenses on Lessee's behalf and commence civil litigation to collect
such amounts from Lessee, together with interest from the date of payment at the
highest rate allowable by law. Lessee shall continue to remain liable for
unpaid rent and other expenses, plus interest, for the remaining term of the
Lease, to the extent that Lessor is unable to collect such amounts from a
substitute tenant. Lessor shall not be obligated to accept a substitute tenant
who, in the reasonable judgment of Lessor, is not financially capable of
fulfilling the terms of this Lease nor shall Lessor be obligated to accept a
substitute tenant who proposes to use the Property for other than warehouse and
general office purposes. All of Lessor's costs incurred in obtaining a
substitute tenant and in dispossessing Lessee under the terms of this paragraph,
including reasonable attorneys' fees, shall be paid by Lessee.

13. DELIVERY OF POSSESSION. Lessee agrees that upon expiration of the
lease term, Lessee will deliver to Lessor possession of the Property in the
condition which existed at the time Lessee took possession of the Property at
the commencement of this Lease. Any damages or deferred maintenance to the
Property required to be paid for by Lessor upon the termination of this Lease
shall be charged to Lessee and Lessee shall pay such amounts within 15 days
after the delivery of written notice and itemization of such charges to Lessee
by Lessor.

<PAGE>

Lease Agreement
Page 4

14. ASSIGNMENT. Lessee agrees not to make any assignment or sublease of
Lessee's rights under this Lease without the prior written consent of Lessor,
which may not be unreasonably withheld; provided, however, that in the case of
any proposed assignment or sublease, Lessor will have the option to terminate
this Lease if Lessee proposes an otherwise reasonable assignment or sublease to
which Lessor objects. If Lessor consents to an assignment or sublease by
Lessee, Lessee shall continue to remain liable for any amounts due under this
Lease which are not paid by the assignee or sublessee.

15. INDEMNIFICATION. Lessee agrees to indemnify Lessor and hold Lessor
harmless from any liability or claims against Lessor arising as a result of
Lessee's use or possession of the Property.

16. ENTIRE AGREEMENT. This Agreement and the documents attached hereto as
schedules, lists or exhibits, if any, constitute the entire agreement and
understanding between the parties with respect to the subject matters herein and
therein, and supersede and replace any prior agreements and understandings,
whether oral or written, between and among them with respect to such matters.
The provisions of this Agreement may be waived, altered, amended or repealed in
whole or in part only upon the written consent of all parties to this Agreement.

17. DESCRIPTIVE HEADINGS. The headings used herein and in any of the
documents attached hereto as schedules, lists or exhibits, if any, are
descriptive only and for the convenience of identifying provisions, and are not
determinative of the meaning or effect of any such provisions.

18. APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
between California residents entered into and to be performed entirely within
the State of California.

19. ATTORNEYS' FEES, COSTS. In the event a party breaches this Agreement,
the breaching party shall pay all costs and attorneys' fees incurred by the
other party in connection with such breach, whether or not any litigation is
commenced.

20. NOTICES. Any notice, payment report or any other communication
required or permitted to be given by one party to any of the other parties of
this Agreement shall be in writing and either (a) served personally on such
other parties, (b) sent by express, registered or certified first-class mail,
postage prepaid, addressed to such other parties at their addresses as indicated
next to their signatures below, or to such other addresses as the addressee or
addressees shall have theretofore furnished to the other parties by written
notice, or (c) delivered by commercial courier to such other parties.

21. SUCCESSORS AND ASSIGNS. Subject to any provisions herein with regard
to assignment, all covenants and agreements herein shall bind and inure to the
benefit of the respective heirs, executors, administrators, successors and
assigns of the parties hereto.

<PAGE>

Lease Agreement
Page 5

22. ADDITIONAL DOCUMENTS. Each of the parties agrees to execute and
deliver, at the request of the other parties, any and all other documents or
other written instruments as may be reasonably necessary to effectuate the
purposes of this Agreement.

23. WAIVER OF CONFLICT. The parties acknowledge that this Lease has been
prepared at their joint request by C. Joseph Smith, Attorney At Law, and that
they have been advised

(NO TEXT ON THE REMAINDER OF THIS PAGE)

<PAGE>

Lease Agreement
Page 6

to obtain separate legal counsel to advise them with respect to this
transaction, but have declined to do so. By executing this Agreement, each
party hereby waives any conflict of interest inherent in this dual
representation.

IN WITNESS WHEREOF, the parties have executed this Lease Agreement
effective as of the date first written above.

921 PARKER STREET, MINNESOTA WESTERN/CREATIVE
A CALIFORNIA GENERAL PARTNERSHIP OFFICE PRODUCTS, INC.

By: COPY By: COPY
--------------------------------- --------------------------------
H. Clark Gilson, Trustee of H. Clark Gilson, President
the Gilson Trust 921 Parker Street
General Partner Berkeley, CA 94710
216 Pershing Drive
Oakland, CA 94611

By: C O P Y
-------------------------------
Ruy J. Pereira, Trustee of
the Pereira Trust,
General Partner
4104 Canyon Road
Lafayette, CA 94549

By: C O P Y
-------------------------------
Larry R. Goodman, Trustee of
the Goodman Trust,
General Partner
33701 Brigantine Drive
Monarch Beach, CA 92629

<PAGE>

Wednesday, August 14, 1996 9:39 AM

LEASE AGREEMENT

LEASE AGREEMENT entered into effective as of August 26, 1996 between 180 S.
Prospect Partners ("Lessor") and Minnesota Western/Creative Office Products,
Inc., a California corporation ("Lessee").

RECITALS:

A. Lessor is the owner of that certain real property commonly known as
180 S. Prospect, Tustin, California, which property is more particularly
described on Exhibit A attached hereto and incorporated herein by this reference
(the "Property").

B. Lessee wishes to lease the Property from Lessor and Lessor wishes to
lease the Property to Lessee on the terms set forth in this Lease Agreement (the
"Lease").

AGREEMENT:

NOW, THEREFORE, the parties hereby agree as follows:

1. AGREEMENT TO LEASE. Lessor hereby leases the Property to Lessee and
Lessee leases the Property from Lessor on the terms and conditions set forth
below.

2. TERM. The lease term shall commence on the effective date of this
Lease and shall continue for five (5) years and six (6) months with three (3)
consecutive 5 year options to lease to be exercised at the sole option of the
Lessee.

3. RENT. Lessee agrees to pay Lessor rent in the amount of $16,692 per
month which shall be due and payable on the first day of each calendar month
commencing October 1, 1996 and continuing for each calendar month thereafter
during the lease term. The rent for the period commencing with the effective
date of this Lease and ending March 31, 2002 shall be prorated based on the
monthly rent and shall be due and payable upon execution of this Lease.

4. RENT INCREASE. The monthly rent provided for herein shall be
increased commencing with the rental payment which is due October 1, 1997, and
continuing for each rental payment due thereafter during the term of this Lease.
The monthly rent which shall be payable commencing on October 1, 1997, shall be
the same as the monthly rental amount payable during the first year of this
Lease, $16,692, as increased by the same percentage as the increase in the
Consumer Price Index prepared by the U.S. Bureau of Labor Statistics For Pacific
Cities and U.S. City Average, All Items, All Urban Consumers, for the Orange
County Area, between October and October of each Lease year. At the beginning
of each 5 year Lease option, the base monthly rent will be subject to
re-negotiation between lessor and lessee with rent predicated on prevailing
market

<PAGE>

Wednesday, August 14, 1996 9:39 AM

conditions and comparable rates in the Orange County Area. Upon the expiration
of the lease terms, the Lease shall terminate and be of no further force or
effect.

6. MAINTENANCE, INSURANCE AND PROPERTY TAXES. This Lease is a "triple
net lease" and Lessee shall pay all maintenance expenses, insurance premiums and
property taxes associated with the Property or required by this Lease. These
amounts shall be paid directly by the Lessee to the appropriate parties and,
upon request, receipts will be provided to Lessor to substantiate payment.
Lessee hereby agrees to maintain the Property in the condition in which it
receives the property and the commencement of the Lease, reasonable and ordinary
wear and tear excepted.

7. INSURANCE. Lessee shall obtain standard liability insurance coverage
on the Property in the amount of $1,200,000 and shall provide Lessor with an
insurance certificate naming Lessor as an additional insured. Lessee shall
obtain standard fire and casualty insurance coverage on the Property insuring
the improvements for their full replacement cost and shall provide Lessor with
an insurance certificate naming Lessor as an additional insured.

8. TENANT IMPROVEMENTS. Any tenant improvements will revert to Lessor at
the termination of the Lease, except for furniture and other personal property
items which are not fixtures and which can be removed without damage to the
Property. No alterations or improvements to the Property will be made by Lessee
without the prior written consent of Lessor. As a condition to approving any
improvements or alterations, Lessor may require that the Property be restored to
its original condition upon expiration of the Lease and the Lessee remove such
alterations or improvements and repair any damage caused by such removal at
Lessee's expense.

9. SUBORDINATION. In the event Lessor desires to finance the Property,
Lessee agrees to subordinate its interest under this Lease to the Lender's first
deed of trust and promissory note. Lessee agrees to execute and deliver any
standard form subordination agreement prepared by the lender at the time of such
financing. This subordination requirement shall not relieve Lessor of any
obligations hereunder to Lessee nor shall it deprive Lessee of any claims Lessee
may have against Lessor for damages in the event that this Lease is terminated
by the lender because of a default by Lessor and a foreclosure against the
Property under the Lender's first deed of trust.

<PAGE>

Wednesday, August 14, 1996 9:39 AM

insurance proceeds, and continue the terms of the Lease or to terminate the
Lease and pay the entire proceeds of the fire and casualty insurance policy to
Lessor as compensation for damage suffered by Lessor. Notwithstanding the
foregoing, in the event that the damage to the Property renders not more than
30% of the inside floor space of the Property unusable by Lessee. Lessee must
repair the Property and the Lease shall continue without abatement of rent. In
the event that Lessee elects to terminate the Lease as provided in this
paragraph, rent shall be prorated to the date of destruction. Lessee must
deliver its written election to terminate this Lease to Lessor within 30 days
after the date of damage to the Property or Lessee will be deemed to have waived
the election.

<PAGE>

Wednesday, August 14, 1996 9:39 AM

sublease to which Lessor objects. If Lessor consents to an assignment or
sublease by Lessee, Lessee shall continue to remain liable for any amounts
due under this Lease which are not paid by the assignee or sub-lessee.

15. INDEMNIFICATION. Lessee agrees to indemnify Lessor and hold Lessor
harmless from any liability or claims against Lessor arising as a result of
Lessee's use or possession of the Property.

<PAGE>

Wednesday, August 14, 1996 9:39 AM

IN WITNESS WHEREOF, the parties have executed this Lease Agreement
effective as of the date first written above.

180 S. PROSPECT PARTNERS MINNESOTA WESTERN/CREATIVE
A CALIFORNIA GENERAL PARTNERSHIP OFFICE PRODUCTS, INC.

By: /s/ H. Clark Gilson, Trustee By: /s/ H. Clark Gilson, President
----------------------------- ------------------------------
H. Clark Gilson, Trustee of H. Clark Gilson, President
the Gilson Trust 921 Parker Street
General Partner Berkeley, CA 94710
216 Pershing Drive
Oakland, CA 94611

By: /s/ Ruy J. Pereira, Trustee
-----------------------------
Ruy J. Pereira, Trustee of
the Pereira Trust,
General Partner
4104 Canyon Road
Lafayette, CA 94549

By: /s/ Larry R. Goodman
-----------------------------
Larry R. Goodman, Trustee of
the Goodman Trust,
General Partner
33701 Brigantine Drive
Monarch Beach, CA 92629

<PAGE>

EXHIBIT 23.2

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-1 of our report dated February 23, 1998,
except as to Note 2 - earnings per share for which the date is April 24,
1998, relating to the consolidated financial statements of Miami Computer
Supply Corporation, which appears in such Prospectus and of our reports dated
November 14, 1997, November 4, 1997 and October 22, 1997 relating to the
financial statements of Minnesota Western/Creative Office Products, Inc., TBS
Printware Corporation and Britco, Inc., respectively, which appear in such
Prospectus. We also consent to the references to us under the heading
"Independent Accountants", "Summary Consolidated Financial Data" and
"Selected Consolidated Financial Data" in such Prospectus. However, it
should be noted that Price Waterhouse LLP has not prepared or certified such
"Summary Consolidated Financial Data" or "Selected Consolidated Financial
Data."

PRICE WATERHOUSE LLP
Cincinnati, Ohio
June 3, 1998