SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D.C. 20549-1004

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


                                    FORM 10-Q

(MARK ONE)

[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
     ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED MARCH 27, 1999

                                       OR

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

                        COMMISSION FILE NUMBER 0 - 20666


                                 MICROTEST, INC.
             ------------------------------------------------------
             (Exact name of registrant as specified in its charter)

               DELAWARE                             86-0485884
    (State or other jurisdiction of     (IRS employer identification number)
             incorporation)

                             4747 NORTH 22ND STREET
                             PHOENIX, ARIZONA 85016
                                 (602) 952-6400
               ---------------------------------------------------
               (Address, including zip code, and telephone number,
                      including area code, of registrant's
                          principal executive offices)

      INDICATE BY CHECK MARK  WHETHER THE  REGISTRANT  (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE  SECURITIES  EXCHANGE  ACT OF
1934  DURING  THE  PRECEDING  12 MONTHS  (OR FOR SUCH  SHORTER  PERIOD  THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH  REPORTS),  AND (2) HAS BEEN SUBJECT TO THE
FILING REQUIREMENTS FOR AT LEAST THE PAST 90 DAYS.

                                    YES  X  NO
                                        ---    ---

       INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES
OF COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE (APRIL 30, 1999).

                 COMMON STOCK, $.001 PAR VALUE: 8,289,136 SHARES

================================================================================
<PAGE>
                        MICROTEST, INC. AND SUBSIDIARIES
                                      INDEX

                                                                 PAGE
                                                                 ----
PART I.    FINANCIAL INFORMATION

   Item 1.  Financial Statements

              Consolidated Balance Sheets-
                 March 27, 1999 and December 31, 1998             3

              Consolidated Statements of Operations-
                 Three Months Ended 
                 March 27, 1999 and 
                 March 28, 1998 (as restated)                     4

              Consolidated Statements of Cash Flows-
                 Three Months Ended
                 March 27, 1999 and 
                 March 28, 1998 (as restated)                     5

              Notes to Consolidated Financial Statements         6-9

   Item 2.  Management's Discussion and Analysis of
              Financial Condition and Results of Operations     10-14

PART II.   OTHER INFORMATION

   Item 1.  Legal Proceedings                                     15

   Item 6.  Exhibits and Reports on Form 8-K                      15


SIGNATURE                                                         16
                                       2
<PAGE>
                        MICROTEST, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS, EXCEPT SHARE AMOUNTS)


                                                        March 27,   December 31,
                                                          1999         1998
                                                        --------      --------
                                                             (unaudited)
ASSETS

CURRENT ASSETS:
     Cash and cash equivalents                          $  8,399      $  9,618
     Restricted investments                                  515         1,124
     Receivables:
          Trade accounts, net of allowances
          of $1,475 and $2,029                             7,139         8,171
          Income taxes                                     2,943         2,897
     Inventories                                           6,481         6,572
     Prepaid expenses                                      1,312         1,148
     Deferred income taxes                                 1,888         1,556
                                                        --------      --------
         Total current assets                             28,677        31,086
                                                        --------      --------

PROPERTY AND EQUIPMENT                                    10,687        10,476
     Less accumulated depreciation                        (7,707)       (7,375)
                                                        --------      --------
         Net property and equipment                        2,980         3,101
                                                        --------      --------

OTHER ASSETS:
     Capitalized software, net                             1,810         1,894
     Deferred income taxes                                 1,519         1,519
     Other                                                 1,732         1,750
                                                        --------      --------
         Total other assets                                5,061         5,163
                                                        --------      --------
                                                        $ 36,718      $ 39,350
                                                        ========      ========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
     Accounts payable                                   $  3,207       $  4,152
     Accrued liabilities                                   3,194          2,922
     Accrued payroll and employee benefits                   929            860
     Accrued deferred compensation                           515          1,124
                                                        --------       --------
         Total current liabilities                         7,845          9,058
                                                        --------       --------

STOCKHOLDERS' EQUITY:
     Common stock, $.001 par value. Authorized
          15,000,000 shares; issued 8,289,136 shares
          as of March 27, 1999 and 8,253,585 as of
          December 31, 1998                                    8              8
     Additional paid-in capital                           32,999         32,916
     Accumulated deficit                                  (2,916)        (1,414)
     Less treasury stock, at cost, 232,520 shares         (1,218)        (1,218)
                                                        --------       --------
         Total shareholders' equity                       28,873         30,292
                                                        --------       --------
                                                        $ 36,718       $ 39,350
                                                        ========       ========

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

                                      3
<PAGE>
                        MICROTEST, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
        THREE MONTHS ENDED MARCH 27, 1999 AND MARCH 28,1998 (AS RESTATED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


                                                          Three Months Ended
                                                                   (as restated)
                                                        March 27,      March 28,
                                                          1999           1998
                                                         -------       -------
                                                              (unaudited)

NET REVENUE                                              $ 9,001       $ 9,716
COST OF REVENUE                                            3,951         3,791
                                                         -------       -------
     Gross profit                                          5,050         5,925
                                                         -------       -------

OPERATING EXPENSES:
  Sales and marketing                                      3,177         3,088
  Research and development                                 1,701         1,747
  General and administrative                               1,402         1,035
  Special charge                                             524            --
                                                         -------       -------
     Total operating expenses                              6,804         5,870
                                                         -------       -------

INCOME (LOSS) FROM OPERATIONS                             (1,754)           55

     Other income, net                                        63            75
                                                         -------       -------
INCOME (LOSS) BEFORE INCOME TAXES                         (1,691)          130

INCOME TAXES (BENEFIT)                                      (306)           40
                                                         -------       -------
     Income (loss) before cumulative effect of
      a change in accounting principle                    (1,385)           90

CUMULATIVE EFFECT OF A CHANGE IN AN
  ACCOUNTING PRINCIPLE, NET OF RELATED TAXES                (117)           --
                                                         -------       -------
NET INCOME (LOSS)                                        $(1,502)      $    90
                                                         =======       =======

BASIC EARNINGS PER SHARE:
  Income (loss) before cumulative effect of
    a change in accounting principle                     $  (.17)      $   .01
  Cumulative effect of a change in accounting principle     (.02)           --
                                                         -------       -------
  Net income (loss)                                      $  (.19)      $   .01
                                                         =======       =======


  Weighted average common shares outstanding               8,049         8,189
                                                         =======       =======

DILUTED EARNINGS PER SHARE:
  Income (loss) before cumulative effect of
    a change in accounting principle                     $  (.17)      $   .01
  Cumulative effect of a change in accounting principle     (.02)           --
                                                         -------       -------
  Net income (loss)                                      $  (.19)      $   .01
                                                         =======       =======


Weighted average common shares outstanding                 8,049         8,371
                                                         =======       =======

    The accompanying notes are an integral part of these financial statements

                                       4
<PAGE>
                        MICROTEST, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
       THREE MONTHS ENDED MARCH 27, 1999 AND MARCH 28, 1998 (AS RESTATED)
                                 (IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                    Three Months Ended
                                                                               (as restated)
                                                                  March 27,       March 28,
                                                                     1999           1998
                                                                   --------       --------
                                                                         (unaudited)
<S>                                                                <C>            <C>
 CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income (loss)                                             $ (1,502)      $     90
     Adjustments to reconcile net income (loss) to net
        cash provided by (used in) operating activities:
     Depreciation and amortization                                      494            300
     Change in accounts receivable allowance                           (554)           641
     Decrease in accounts receivable                                  1,586          3,711
     (Increase) decrease in income taxes receivable                     (46)           128
     (Increase) decrease in inventories                                  91            (98)
     (Increase) decrease in prepaid expenses and other assets          (146)           143
     Increase in deferred income taxes                                 (332)            --
     Decrease in accounts payable                                      (945)          (161)
     Increase (decrease) in accrued liabilities                         272         (2,272)
     Increase in accrued payroll and employee benefits                   69             88
                                                                   --------       --------
          Net cash provided by (used in) operating activities        (1,013)         2,570
                                                                   --------       --------

 CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of property and equipment                                (211)           (87)
     Capitalized software                                               (78)          (193)
                                                                   --------       --------
          Net cash used in investing activities                        (289)          (280)
                                                                   --------       --------

 CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from sale of common and treasury stock                     83            183
                                                                   --------       --------
          Net cash provided by financing activities                      83            183
                                                                   --------       --------

 NET INCREASE (DECREASE) IN CASH AND
     CASH EQUIVALENTS                                                (1,219)         2,473

 CASH AND CASH EQUIVALENTS, beginning of period                       9,618         11,547
                                                                   --------       --------

 CASH AND CASH EQUIVALENTS, end of period                          $  8,399       $ 14,020
                                                                   ========       ========
</TABLE>

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

                                       5
<PAGE>
                        MICROTEST, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS




(1)      BASIS OF PRESENTATION:

         The accompanying consolidated financial statements include the accounts
of  Microtest,  Inc.  (the  "Company")  and its wholly owned  subsidiaries.  All
significant  intercompany  balances and  transactions  have been  eliminated  in
consolidation.

         The accompanying  unaudited consolidated financial statements have been
prepared  by the  Company  in  accordance  with  generally  accepted  accounting
principles, pursuant to the rules and regulations of the Securities and Exchange
Commission. In the opinion of management,  the accompanying financial statements
include all adjustments (of a normal recurring nature) which are necessary for a
fair  presentation  of the results for the interim  periods  presented.  Certain
information and footnote  disclosures  normally included in financial statements
have been condensed or omitted pursuant to such rules and regulations.  Although
the Company  believes that the  disclosures are adequate to make the information
presented not  misleading,  it is suggested that these  financial  statements be
read in conjunction  with the  consolidated  financial  statements and the notes
thereto  included in the Company's 1998 Annual Report to Shareholders and report
on Form 10-K.  The results of  operations  for the three  months ended March 27,
1999 are not  necessarily  indicative of the results to be expected for the full
year.

(2)      INVENTORIES:

         Inventories consist of the following (in thousands):


                                                  March 27,        December 31,
                                                    1999              1998
                                                   -------           -------
                                                 (unaudited)
     Raw materials                                 $ 1,353           $ 1,946
     Work-in-process                                   130               100
     Finished goods                                  5,740             5,200
                                                   -------           -------
                                                     7,223             7,246
     Less allowance for inventory valuation           (742)             (674)
                                                   -------           -------
                                                   $ 6,481           $ 6,572
                                                   =======           =======

                                       6
<PAGE>
(3)      EARNINGS (LOSS) PER SHARE:

         The following table sets forth the computation of basic and diluted net
income (loss) per share:

                                                              (as restated)   
                                                   March 27,    March 28,
                                                     1999         1998
                                                   ---------    ---------
         Net income (loss)                        $   (1,502)  $       90
                                                  ==========   ==========
         Weighted average common shares
            outstanding                                8,049        8,189

         Dilutive effect of stock options                  -          182
                                                  ----------   ----------
         Weighted average common and common
            equivalent shares outstanding              8,049        8,371
                                                  ==========   ==========

         Basic net income (loss) per share        $     (.19)  $      .01
                                                  ==========   ==========

         Diluted net income (loss) per share      $     (.19)  $      .01
                                                  ==========   ==========


(4)      SPECIAL CHARGE:

         During the quarter  ended March 27,  1999,  the  Company  recognized  a
special charge of $524,000 to recognize severance payments for the restructuring
of the Company's management organization.

(5)      SEGMENTS:

         For organizational,  marketing and financial  reporting  purposes,  the
Company has organized into two reportable  business  segments:  (1) Network Test
and Measurement  ("NTM" formerly  referred to as NMP), and (2) Network  Attached
Storage  ("NAS"  formerly  referred to as NCP).  In  addition,  the NAS business
segment  develops and sells CD-ROM  networking  systems and service  maintenance
contracts in the United States and Germany.

         The NTM business  segment consists of products that are used by service
providers and system  integrators to perform critical cabling  certification and
network diagnostics.  The NTM line consists of cable certification tools such as
OMNIScanner,  PentaScanner,  CertiFiber, and network trouble shooting tools such
as MICROSCANNER and COMPAS.

         The NAS business segment  consists of products that address  challenges
associated   with  managing   network  devices  and  sharing  large  amounts  of
information within workgroups or enterprises. Network administrators, librarians
and  information  resource  professionals  in  organizations  such as law firms,
educational  institutions,  libraries  and research  facilities  are some of the
target  markets for  Microtest's  NAS line.  The NAS line consists  primarily of
Zerver and DiscPort products.

         The Company does not measure  assets or operating  expenses  separately
for the NTM and NAS business segments.

                                       7
<PAGE>
         Information  related to the  operations  of the  Company  in  different
business  segments for the first quarter ended March 27, 1999 and March 28, 1998
is set forth below.


                               NAS           NTM         Total
                             -------      --------     -------

Net revenue:       1999      $ 3,111      $  5,890     $ 9,001
                   1998        3,910         5,806       9,716

Gross profit:      1999        1,755         3,295       5,050
                   1998        2,440         3,485       5,925


                                                 March 27,      March 28,
                                                   1999           1998
                                                -----------    ----------

         Gross profit for reportable segments   $     5,050    $    5,925
         Unallocated amounts:
              Operating expenses                     (6,804)       (5,870)
              Net interest income                        63            75
                                                -----------    ----------
         Income (loss) before taxes             $    (1,691)   $      130
                                                ===========    ==========


(6)      MAJOR CUSTOMERS:

         Major customers  accounting for more than 10% of total revenues for the
first quarter  ended March 27, 1999 and March 28, 1998,  are  summarized  below.
Percentage of revenue amount is not presented if less than 10%.

                                                 March 27,         March 28,
        Customer                                    1999              1998
        --------                                -------------     -------------

        Graybar Electric Company, Inc.              12%                -
        Tech Data Corporation                        -                13%

(7)      DOMESTIC AND INTERNATIONAL OPERATIONS:

         The  Company  markets its  products  domestically  and  internationally
through  its own direct  sales  organization  and  through a  multiple  channel,
worldwide  distribution  network.  A summary of domestic and  international  net
revenues to  unaffiliated  customers  for the first quarter ended March 27, 1999
and March 28, 1998, follows:

                                          March 27,       March 28,
                                            1999             1998
                                          ---------       ---------
         Domestic                       $     4,893       $   5,821
         International                        4,108           3,895
                                        -----------       ---------
             Net revenues               $     9,001       $   9,716
                                        ===========       =========

                                       8
<PAGE>
(8)   RESTATEMENT:

         The following table presents the Company's selected unaudited quarterly
operating  results for the first  quarter  ended  March 28,  1998 as  originally
reported,  and as restated.  The Company restated its quarterly  results for the
first  three  quarters  of 1998 to  correct  errors  identified  during the 1998
year-end  audit.  The errors were primarily  attributable  to system changes and
turnover in the finance  department that occurred during the first half of 1998.
The  corrections  related  primarily  to  various  adjustments   correcting  the
provision for sales returns, correcting software capitalization and amortization
and intercompany account transactions.

                                             Quarter ended March 28, 1998
                                         -------------------------------------
                                         As originally reported    As restated
                                         ----------------------    -----------
         Net revenue                        $   9,716              $   9,716
         Cost of revenue                        3,774                  3,791
         Gross profit                           5,942                  5,925
         Total operating expenses               5,768                  5,870
         Net income                               173                     90
         Net income per common share -
           basic and diluted                $     .02              $     .01

(9)   COMMITMENTS AND CONTINGENCIES:

         The Company is  involved in certain  legal  matters  incidental  to its
business,  the outcome of which is currently unknown.  Management  believes that
the Company's liability,  if any, with respect to such matters,  will not have a
material  adverse  affect on the  Company's  financial  condition and results of
operations.

         On March 8, 1999, a purported  class action  lawsuit was filed  against
Microtest,  Inc. and certain former officers in the United States District Court
for the District of Arizona.  The suit claims that  Microtest  violated  Section
10(b) of the Securities Exchange Act of 1934 by making public misrepresentations
or failing to disclose material facts regarding its financial results.  The suit
was  filed as a class  action on behalf of all  purchasers  of  Microtest  stock
between  April 14, 1998 and March 2, 1999.  A similar suit was filed on April 7,
1999,  but has not, as of the date of this  filing,  been served on the Company.
Microtest intends to vigorously  defend these lawsuits.  The eventual outcome of
these claims cannot be predicted with any degree of legal certainty.

         The  Securities  and  Exchange  Commission  ("SEC")  is  engaged  in an
investigation  relating primarily to accounting matters of the Company.  The SEC
has not, to date,  asserted  any  specific  claims or remedy with respect to the
Company.

                                       9
<PAGE>
                        MICROTEST, INC. AND SUBSIDIARIES

                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

         The Company restated its quarterly results for the first three quarters
of 1998 to correct errors  identified during the 1998 year-end audit. The errors
were  primarily  attributable  to system  changes  and  turnover  in the finance
department that occurred during the first half of 1998. The corrections  related
primarily to various  adjustments  correcting  the provision for sales  returns,
correcting  software  capitalization and amortization and  intercompany  account
transactions. See Note 8.

         REVENUE.  Net revenue for the  Company's  first quarter ended March 27,
1999 was $9.0  million,  a decrease of 7.4% from revenue of $9.7 million for the
corresponding quarter last year. The overall decrease was primarily attributable
to intensified  competition and the Company's  decision to withdraw from the low
margin tower business.  The lower than anticipated  revenue from new DiscPort 2,
DiscPort VT, and DiscZerver products were unable to offset the tower revenues.

         The Company distributes its products in both the U.S. and international
markets.  U.S.  net  revenues  were $4.9  million and $5.8 million for the first
quarters of 1999 and 1998, respectively, representing 54% of net revenue and 60%
of net revenue,  respectively,  for those periods.  The 16% decrease in U.S. net
revenue  in the first  quarter of 1999 from the first  quarter of 1998  resulted
primarily  from a  decline  in the sales of  Network  Attached  Storage  ("NAS")
products.

         International  sales were $4.1  million and $3.9  million for the first
quarters of 1999 and 1998, respectively, representing 46% of net revenue and 40%
of  net  revenue,   respectively,   for  those  periods.   The  6%  increase  in
international  sales in the first quarter of 1999 from the first quarter of 1998
resulted primarily from increased sales in South America and Germany.

         GROSS PROFIT. The Company's gross profit was $5.1 million or 56% of net
revenue and $5.9  million or 61% of net revenue for the three months ended March
27, 1999 and March 28, 1998,  respectively.  The  decrease in the first  quarter
gross margin was primarily the result of an increase in warranty reserves and in
the  amortization  of  capitalized  software  over the same  quarter  last year.
Warranty  reserves  were  increased to reflect  anticipated  repair costs as the
Company  expands its  international  service  capabilities.  In addition,  gross
margins may  fluctuate  on a quarterly  basis  because of product  mix,  pricing
actions and changes in sales and inventory allowances.

         SALES AND MARKETING.  Sales and marketing expenses were $3.2 million or
35% of net revenue and $3.1 million or 32% of net revenue for the first quarters
of 1999 and 1998, respectively.  The increase in marketing and sales expenses in
absolute dollars for the first quarter of 1999 over the corresponding  period in
1998 is due  primarily  to an increase of  $200,000 in reserves  for  evaluation
units that are outstanding and are not expected to be recovered.

         RESEARCH AND DEVELOPMENT.  Research and development  expenses  remained
constant at $1.7 million for the first  quarters of 1999 and 1998,  representing
approximately 18% of net revenue. The Company capitalized  approximately $78,000
and $193,000  during the first quarters ended March 27, 1999 and March 28, 1998,
respectively,   of  software  development  costs  for  new  products  for  which
technological  feasibility  has been  determined.  These costs will be amortized
over the expected number of units to be sold, or three years,  whichever  method
is faster,  and  charged to cost of revenue.  These  amortization  charges  will
result in lowering the Company's net income in future periods.

         GENERAL AND  ADMINISTRATIVE.  General and administrative  expenses were
$1.4 million or 16% of net  revenue,  and $1.0 million or 11% of net revenue for
the first quarters of 1999 and 1998,  respectively.  The increase in general and
administrative  expenses as a percentage of net revenue, as well as in 

                                       10
<PAGE>
aggregate dollars,  for the first quarter of 1999 over the corresponding  period
in 1998 is due  primarily  to an increase in  professional  fees for  additional
first quarter work.

         SPECIAL  CHARGE.  The special  charge  recorded in the first quarter of
1999 represents  severance  expenses taken to recognize the restructuring of the
Company's management organization.

         EFFECTIVE  TAX RATE.  The  effective  tax rate on income  before income
taxes  was 18% for the  first  quarter  ended  March  27,  1999  and 31% for the
corresponding  period in the prior year. The effective tax rates differ from the
expected  statutory federal income tax rate for those periods as a result of the
inclusion of state income taxes,  tax benefits from the Company's  Foreign Sales
Corporation and Research and Development tax credits.

         CUMULATIVE EFFECT OF A CHANGE IN ACCOUNTING  PRINCIPLE.  The cumulative
effect of a change in an accounting  principle, recorded in the first quarter of
1999, reflects the write-off of international product translation costs that had
previously been capitalized. The write-off is in accordance with AICPA Statement
of Position 98-5, "REPORTING ON THE COSTS OF START-UP ACTIVITIES."

LIQUIDITY AND CAPITAL RESOURCES

         The Company had cash and cash  equivalents of $8.4 million at March 27,
1999  compared to $9.6 million at December 31, 1998.  Working  capital was $20.8
million at March 27, 1999  compared to $22.0  million at December 31, 1998.  The
decrease in cash and cash equivalents and working capital was primarily a result
of  reductions  in accounts  payable  and funding of the cash used in  operating
activities.

         The Company  funds its working  capital  requirements  on a  short-term
basis  primarily  through  existing cash balances.  The Company has no long-term
obligations  and  anticipates  that  existing  cash balances and cash flows from
operations will be adequate to meet the Company's cash requirements for at least
the next year.

         During the second quarter of 1997,  the Company  obtained a $10 million
unsecured  revolving  credit  facility  with a bank that is utilized for general
corporate and working capital purposes.  The credit facility carries an interest
rate equal to the bank's  "Reference  Rate"  defined as the rate of  interest in
effect for such day as publicly  announced  from time to time by the bank as its
reference  rate or the Offshore Rate plus 1.50.  Major  convenants of the credit
facility include:  (1) the Company, on a consolidated basis, not incurring a net
and operating loss in two consecutive  quarters,  (2) the Company  maintaining a
modified  quick  ratio of no less  than  1.50,  (3) the  Company  maintaining  a
tangible  net worth of no less than 90% of the  Company's  tangible net worth at
December 31, 1996, and (4) the Company not  permitting its total  liabilities to
exceed .75 times  tangible  net worth.  The Company  and the bank are  currently
negotiating an amendment to the credit  facility that will extend the expiration
date to June 30, 1999. No amounts were outstanding under this credit facility as
of March 27, 1999.

RISK FACTORS

         The  market  for the  Company's  products  is  characterized  by  rapid
technological  advances,  evolving  industry  standards in computer hardware and
software technology,  changes in customer  requirements and frequent new product
introductions and enhancements.  The Company's future success will depend on its
ability to  continue  to enhance  its  current  product  line and to continue to
develop and  introduce  new  products  that keep pace with  competitive  product
introductions  and  technological  developments,  satisfy  diverse and  evolving
customer  requirements or otherwise achieve market  acceptance.  There can be no
assurance  that the Company  will be  successful  in  continuing  to develop and

                                       11
<PAGE>
market,  in a  timely  and  cost  effective  manner,  new  products  or  product
enhancements  that  respond to  technological  advances  by others or that these
products will achieve market acceptance. In addition,  companies in the industry
have,  in the past,  experienced  delays in the  development,  introduction  and
marketing  of new and enhanced  products and there can be no assurance  that the
Company will not experience delays in the future.  Any failure by the Company to
anticipate  or  respond   adequately  to  changes  in  technology  and  customer
preferences,  or any significant delays in product  development or introduction,
would  have a  material  adverse  affect on the  Company's  business,  financial
condition and results of operations.

         Due to their  complexity and  sophistication,  the Company's  products,
from time to time,  may  contain  defects or "bugs"  which can be  difficult  to
correct. Moreover, as the Company continues to develop and enhance its products,
there can be no assurance  that the Company will be able to identify and correct
defects  in such a manner  that will  permit  the  timely  introduction  of such
products. Furthermore,  despite extensive testing, the Company has, from time to
time,  discovered  defects  only  after  its  products  have  been  commercially
released.  There can be no assurance that product  defects will not cause delays
in  product  introductions  and  shipments,  cause  loss of or  delays in market
acceptance,  result in increased costs,  require design  modifications or impair
customer  satisfaction.  Any such event could have a material  adverse affect on
the Company's business, financial condition and results of operations.

         Over the  past  three  years,  CD-ROM  drive  technology  has  advanced
significantly.  In addition,  the pace of new drive introductions has increased.
As a result,  the  Company  may find  itself  holding an  inventory  of obsolete
drives. The Company's  contracts with its distributors allow for product returns
or price protection  credits,  based on current  inventory levels of current and
obsolete products under certain limited circumstances. The Company estimates and
accrues an allowance for such  occurrences,  but there can be no assurance  that
actual inventory  writedowns,  product returns or price protection  credits will
not exceed the Company's  estimates.  Any of the  foregoing  events could have a
material  adverse  affect on the  Company's  business,  financial  condition and
results of operations.

YEAR 2000 ISSUES

         Like many other  organizations,  the year 2000  computer  issue creates
risks for the  Company.  Many  computer  systems  were  originally  designed  to
recognize calendar years by their last two digits.  Calculations performed using
these  truncated  fields would not work  properly with dates during or after the
year 2000.  To address  these year 2000  issues,  the  Company  has  initiated a
comprehensive assessment and remediation program to resolve any year 2000 issues
with respect to its information  technology ("IT") systems,  its non-IT systems,
products  and  the  systems  of  third  parties  with  which  it has a  material
relationship.  The Company  estimates  that as of May 6, 1999,  it has completed
approximately  90% of the effort it believes  necessary or prudent to adequately
address potential year 2000 issues they have identified.

         The IT  systems  section  of  its  year  2000  program  focuses  on the
Company's  computer  hardware  and  software.  The  Company  has  completed  the
assessment  phase of its program.  The  Company's  current IT systems which were
determined not to be compliant have entered the  remediation  phase during which
the  Company  will  either  replace  or  otherwise  remedy  such  systems.   The
remediation  phase for IT systems is expected to be  completed by June 30, 1999.
Some minor systems may be converted later in 1999.

         The  non-IT  systems  section  includes  the  hardware,   software  and
associated  embedded  computer  technologies  that are used to  operate  Company
facilities,  equipment and other  activities that are not related to IT systems.
The Company's building  management has provided the Company with a complete 

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list of vendors indicating compliance. The current telephone system is compliant
and long distance and local telephone service are compliant.

         The Company's  current products and all planned future  releases,  with
minor  exceptions,  are year  2000  compliant.  Registered  customers  have been
notified of non-compliant  products and any available upgrade.  This information
was also made available on the Company's Web site as of June 1998.

         The Company is continuing the process of identifying,  prioritizing and
communicating with critical  suppliers,  distributors and customers to determine
the extent to which the Company  may be  vulnerable  in the event those  parties
fail to properly  identify and remedy  their own year 2000  issues.  The Company
believes that non-compliant systems related to the Company's top suppliers would
present the greatest risk to the Company. Questionnaires have been sent to those
suppliers and they have stated that they are  compliant or expect  compliance by
the end of 1999.  The  Company  intends to monitor  the  progress  made by these
critical  third  parties and  formulate  appropriate  contingency  and  business
continuation plans as needed.

         The  Company  currently  believes  that the worst  case  scenario  with
respect to the year 2000 issue is the failure of a supplier,  including  utility
suppliers,  to become year 2000  compliant,  which could result in the temporary
interruption of the supply of necessary products or services.  This could result
in  interruptions in production for a period of time, which in turn could result
in potential lost sales and profits.  In addition,  marketing and administrative
expense  could  increase  if  automated  functions  would  need to be  performed
manually.

         The total cost of the  Company's  year 2000 Plan is not  expected to be
material to the Company's financial  condition.  The estimated total cost of the
Plan should not exceed $750,000 and is being funded through operating cash flows
and  existing  cash  balances.   To  date,  the  Company  has  incurred  capital
expenditures  of  approximately  $350,000  related to this project.  None of the
Company's other information technology projects have been delayed or deferred as
a result of the  implementation  of the year 2000  Compliance  Plan. The Company
does not expect that the incremental  costs of this project will have a material
adverse affect on the Company's  consolidated financial statements or results of
operations in any future periods.

         The costs of the year 2000  project  and the dates on which the Company
believes it will complete the year 2000  modifications  and testing are based on
management's best estimates.  These were derived utilizing numerous  assumptions
regarding  future  events,  including  the  continued  availability  of  certain
resources,  third party modification plans and other factors. However, there can
be no guarantee  that these  estimates will be achieved and actual results could
differ  materially  from those currently  anticipated.  Examples of factors that
might  cause such  material  differences  include,  but are not  limited to, the
availability  and cost of personnel  trained in this area, the ability to locate
and correct all  relevant  computer  codes and embedded  technology  and similar
uncertainties.  In  addition,  there can be no  guarantee  that the  systems  or
products of other entities will be converted on a timely basis,  or that failure
to convert by another  company,  or a conversion that is  incompatible  with the
Company's systems, would not have a material adverse affect on the Company.

         The Company presently  believes it has an effective  Compliance Plan in
place to anticipate  and resolve  potential year 2000 issues in a timely manner.
Concurrent  with the  remediation  of the  Company's  systems and  evaluation of
third-party  systems,  the Company  continues  to develop  contingency  plans to
mitigate  the  risks  that  could  occur  in  the  event  of  disruption  due to
non-compliant  systems.  Contingency  plans may include  looking for alternative
suppliers,  increasing  inventory levels or other actions deemed prudent.  It is
expected that assessment,  remediation and contingency  planning activities will
be on  going  throughout  1999  with  the goal of  appropriately  resolving  all

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material  internal  systems and third-party  issues.  Estimated costs associated
with  developing  and  implementing   contingency  measures  are  not  currently
estimable.

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<PAGE>
                        MICROTEST, INC. AND SUBSIDIARIES
                           PART II. OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS

         From time to time the Company is involved in various legal  proceedings
incidental to its business.  Management  does not believe that any current legal
proceedings  will have a material  adverse affect on the financial  condition or
operating results of the Company, but there can be no assurances in this regard.
On March 8, 1999, a purported class action lawsuit was filed against  Microtest,
Inc. and certain  former  officers in the United States  District  Court for the
District of Arizona.  The suit claims that Microtest  violated  Section 10(b) of
the  Securities  Exchange  Act of 1934 by making  public  misrepresentations  or
failing to disclose material facts regarding its financial results. The suit was
filed as a class action on behalf of all  purchasers of Microtest  stock between
April 14, 1998 and March 2, 1999.  Microtest  intends to  vigorously  defend the
suit. The eventual  outcome of this claim cannot be predicted with any degree of
legal certainty.

         The  Securities  and  Exchange  Commission  ("SEC")  is  engaged  in an
investigation  relating primarily to accounting matters of the Company.  The SEC
has not, to date,  asserted  any  specific  claims or remedy with respect to the
Company.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

         (a) Exhibits

Exhibit                                               Page or
Number    Description                                 Method of Filing 
------    -----------                                 ---------------- 
3.1       Amended and Restated Certificate of         Incorporated by
          Incorporation of the Company dated          reference to Exhibit 3.1 
          May 19, 1992                                to Form S-1 Registration
                                                      Statement #33-52264 
                                                      ("Form S-1 #33-52264")

3.2       Bylaws of the Company                       Incorporated by reference
                                                      to Exhibit 3.2 to Form S-1
                                                      #33-52264

27        Financial Data Schedule                     Filed herewith

99        Private Securities Litigation Reform Act    Filed herewith
          of 1995 Safe Harbor Compliance Statement
          for Forward-Looking Statements 
                                               
         (b) Reports on Form 8-K

         The Company filed a report on Form 8-K dated March 15, 1999, announcing
that a class action lawsuit was filed against Microtest, Inc. and certain former
officers in the United States District Court for the District of Arizona.

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<PAGE>
                                    Signature

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

                                           MICROTEST, INC.


Date:  May 11, 1999                By     /s/ Vincent C. Hren
                                          -------------------------------------
                                          Vincent C. Hren
                                          President and Chief Executive Officer


                                   By     /s/ Daniel J. Predovic
                                          -------------------------------------
                                          Daniel J. Predovic
                                          Vice President, Secretary and Chief
                                          Financial Officer
                                          (Principal Financial Officer)

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