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Miami Computer Supply Corp.
NASDAQ-MCSC-$20.00
Richard J. Wayman, CFA	April 14, 1999

Company Description Miami Computer Miami Computer Supply Corp., based in Dayton, Ohio, is a distributor of computer and office automation supplies and accessories, including computer projection presentation products, to end users throughout the US and certain foreign countries. MCSC’s strategy is to be a value-added supplier (providing technical support and advice) and grow via accretive acquisitions.

Key Investment Points

• We have been followed this Company since 1997 and remain impressed with management and their business plan. Management has consistently executed their strategy and generated impressive earnings growth.
• MCSC is an innovator in a highly fragmented market niche. The Company’s competitive advantage is its focus on computer supplies and presentation products with an emphasis on a high degree of technical customer assistance.
• Annual sales and earnings growth has been in excess of 20% range as the result of solid internal growth and acquisitions.
• FY98 EPS sales and EPS increased 191% and 186%, respectively.

THE BOTTOM LINE
4Q98 Results Exceed Expectations - EPS Increased 82%


MCSC continues to execute its plan and posted impressive results for the 4Q and FY98. Diluted EPS grew 82% to $0.20 while sales increased 221% to $116.0 million. For the year, diluted EPS increased 67% to $0.65 while sales grew 192% to 313.8 million. While contributed to these results (see Table 1, below), its important to note that MCSC still posted internal growth of 20% for the sixth consecutive year.




OUTLOOK
MCSC is well positioned to capitalize on the proliferation of computer-generated presentation products and increased computer use. MCSC started out as a value-added distributor of computers and related office equipment. Today, after 15 acquisitions, MCSC has grown into a firm that sells computer presentation products (mainly projectors) as well as being able to design/retrofit boardrooms that utilize these state-of-the-art machines to make presentations. This expansion not only provided an entrée to selling higher margin products, it provides MCSC with the opportunity to cross sell its other computer-related office supplies and leverage its sales force.


1999 EPS Forecast Raised to $0.88 From $0.78
We raised our EPS forecast based on the recently announced acquisitions. We expect internal growth of between 15% - 19% over the next 2-3 years, but the most recent three acquisitions are expected to boost 1999 EPS growth to almost 46%. We expect these acquisitions to add $233 million in revenues in 1999 and accretive to earnings by about $0.10 per share. We also expect future internal growth to benefit from the synergies inherent in increased buying power with suppliers as well as cross-selling opportunities. Table 2 contains our annual EPS forecast.


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researchstock.com, Inc.	Rick Wayman, CFA
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