<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM 10-Q
---------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended DECEMBER 27, 1998
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission File Number 0-18238
TEXAS MICRO INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 04-2738973
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
5959 CORPORATE DRIVE, HOUSTON, TEXAS 77036
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 713-541-8200
---------------------
Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
As of February 1, 1999, 13,457,818 shares of the registrant's Common Stock,
$.40 par value, were outstanding.
===============================================================================
<PAGE>
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS TEXAS MICRO INC. AND SUBSIDIARIES
December 27, June 30,
1998 1998
(unaudited)
----------- ---------
(in thousands)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 4,961 $ 7,568
Accounts receivable, net of allowance for doubtful accounts
of $857 at December 27, 1998 and $888 at June 30, 1998 13,842 11,508
Inventories 11,676 8,291
Other current assets 1,588 1,825
---------- --------
Total current assets 32,067 29,192
========== ========
Equipment and improvements, at cost:
Computer equipment 3,776 3,379
Machinery and equipment 4,599 4,270
Furniture and fixtures 1,085 1,011
Leasehold improvements 1,309 968
Construction in progress 1,829 519
---------- --------
12,598 10,147
Less - Accumulated depreciation and amortization 7,346 6,549
---------- --------
5,252 3,598
---------- --------
Other assets 144 66
---------- --------
Total Assets $ 37,463 $ 32,856
========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 4,705 $ 3,886
Accrued expenses 7,627 5,783
---------- --------
Total current liabilities 12,332 9,669
========== ========
Commitments and contingencies
Stockholders' Equity:
Preferred stock, $.40 par value:
Authorized--12,500 shares at December 27, 1998 and June 30, 1998
Issued--none - -
Common stock, $.40 par value:
Authorized--35,000 shares at December 27, 1998 and June 30, 1998
Issued--15,643 shares at December 27, 1998 and June 30, 1998 6,257 6,257
Additional paid-in capital 80,327 80,314
Accumulated deficit (55,580) (57,468)
Unrealized loss on securities available for sale (568) (325)
Treasury stock, at cost, 2,219 shares at December 27, 1998 and
2,250 shares at June 30, 1998 (5,324) (5,400)
Cumulative translation adjustment 19 (191)
---------- --------
Total stockholders' equity 25,131 23,187
---------- --------
Total Liabilities and Stockholders' Equity $ 37,463 $ 32,856
========== ========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS TEXAS MICRO INC. AND SUBSIDIARIES
(unaudited)
For the three months ended, For the six months ended,
December 27, December 28, December 27, December 28,
1998 1997 1998 1997
------------ ------------ ------------ ------------
(in thousands, except per share data)
<S> <C> <C> <C> <C>
Revenues
Product $ 21,636 $ 18,507 $ 41,117 $ 34,544
Service and other 421 425 1,262 425
------------ ------------ ------------ ------------
Total revenues 22,057 18,932 42,379 34,969
Cost of revenues
Product 14,320 13,109 27,186 24,202
Service and other 254 - 501 -
------------ ------------ ------------ ------------
Total cost of revenues 14,574 13,109 27,687 24,202
Gross profit 7,483 5,823 14,692 10,767
Research and development expenses 2,309 1,907 4,579 3,858
Selling, general and administrative expenses 4,230 3,902 8,418 7,477
------------ ------------ ------------ ------------
Total operating expenses 6,539 5,809 12,997 11,335
Income (loss) from operations 944 14 1,695 (568)
Interest income 78 69 177 159
Other income (expense) 133 17 203 38
------------ ------------ ------------ ------------
Income (loss) before provision for income taxes 1,155 100 2,075 (371)
Provision for income taxes 108 28 196 46
------------ ------------ ------------ ------------
Net income (loss) $ 1,047 $ 72 $ 1,879 $ (417)
============ ============ ============ ============
Basic income (loss) per share $ 0.08 $ 0.01 $ 0.14 $ (0.03)
============ ============ ============ ============
Diluted income (loss) per share $ 0.08 $ 0.01 $ 0.14 $ (0.03)
============ ============ ============ ============
Average common shares outstanding 13,423 13,509 13,422 13,507
============ ============ ============ ============
Average common shares assuming dilution 13,636 13,917 13,643 13,507
============ ============ ============ ============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS TEXAS MICRO INC. AND SUBSIDIARIES
(unaudited)
For the six months ended,
December 27, December 28,
1998 1997
------------ -------------
(in thousands)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 1,879 ($417)
Adjustments to reconcile net income (loss) to
net cash (used in) operating activities--
Depreciation 777 728
Amortization 53 53
Provisions for inventories 937 178
Provisions for bad debts 152 32
Changes in assets and liabilities:
Accounts receivable (2,412) (2,834)
Inventories (4,291) (1,176)
Other current assets 7 4
Accounts payable 814 (150)
Accrued expenses 1,834 1,819
--------- ---------
Net cash used in operating activities (250) (1,763)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment and improvements (2,421) (680)
Proceeds from sale of SES business unit - 890
Increase in other assets (131) 2
--------- ---------
Net cash provided by (used in) investing activities (2,552) 212
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock 97 53
--------- ---------
Net cash provided by financing activities 97 53
--------- ---------
Effect of exchange rates on cash 98 (34)
--------- ---------
NET DECREASE IN CASH AND CASH EQUIVALENTS (2,607) (1,532)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 7,568 8,386
--------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 4,961 $ 6,854
========= =========
Supplemental Disclosure of Cash Flow Information:
Cash paid for income taxes $ 81 $ 21
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
4
<PAGE>
Notes to Consolidated Financial Statements
Texas Micro Inc. and Subsidiaries
(unaudited)
NOTE 1 - BASIS OF PRESENTATION
Texas Micro Inc. (the "Company") is a provider of differentiated Intel-based
computer systems and single board computers ("SBC's") for the communications and
industrial automation markets. The Company operates in one segment, computer
systems.
The financial statements included herein have been prepared by the Company
pursuant to the rules and regulations of the Securities and Exchange Commission
(the "Commission"). Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. The Company believes, however, that the disclosures made are
adequate to make the information not misleading. It is suggested that these
financial statements be read in conjunction with the financial statements and
notes thereto included in the Company's latest audited financial statements,
which are contained in the Company's Annual Report on Form 10-K for the year
ended June 30, 1998, filed with the Commission on September 14, 1998.
This information includes all adjustments (consisting of normal, recurring
adjustments) which the Company considers necessary for a fair presentation of
such information. The results of operations for the three and six months ended
December 27, 1998 are not necessarily indicative of results to be expected for
the entire year.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain 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 period. Actual results could differ from these estimates.
NOTE 2 - INVENTORIES
Inventories including materials, labor and manufacturing overhead consisted of
the following:
(in thousands)
December 27, June 30,
1998 1998
----------- ---------
Raw materials $ 7,731 $ 5,682
Work-in-process 2,505 1,899
Finished goods 1,440 710
----------- ---------
$ 11,676 $ 8,291
----------- ---------
NOTE 3 - NET INCOME (LOSS) PER SHARE
Basic income (loss) per share is based on the weighted average number of common
shares outstanding during the period, while diluted income (loss) per share is
computed to reflect the potential dilution of common stock under the Company's
stock option plans. For loss periods, weighted average common share equivalents
are excluded from the calculation as their effect would be antidilutive.
NOTE 4 - COMPREHENSIVE INCOME
The Company adopted Statement of Financial Accounting Standards ("SFAS") No.130,
"Reporting Comprehensive Income" during the first quarter of fiscal 1999. SFAS
No. 130 establishes new rules for the reporting and presentation of
comprehensive income and its components. The Company's comprehensive income is
comprised of net income, foreign currency translation adjustments and unrealized
losses on marketable securities held as available-for-sale investments.
Comprehensive income (loss) was $829,000 and $1,850,000 for the three and six-
month periods ending December 27, 1998 compared to $30,000 and ($467,000) for
the three and six-month periods ending December 28, 1997.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Company is a provider of differentiated Intel-based computer systems and
single board computers ("SBCs") for the communications and industrial automation
markets. The Company operates in one segment, computer systems.
RESULTS OF OPERATIONS
REVENUES
The Company's revenues for the second quarter of fiscal 1999, which ended
December 27, 1998, of $22,057,000 increased 17% from $18,932,000 for the second
quarter of fiscal 1998. Service and other revenue remained relatively flat,
however, only $142,000 in license revenue was recorded in the second quarter of
fiscal 1999 compared to $425,000 in the second quarter of fiscal 1998. During
the second quarter of 1999, units shipped increased 25% and the average unit
selling price declined 7% as compared with the second quarter of 1998. Sales to
the top five customers represented 46% of total revenues for the second quarter
of fiscal 1999 and 26% for the second quarter of fiscal 1998. The Company had
one customer that represented 20% of total revenues for the quarter ended
December 27, 1998.
The Company's revenues for the first six months of fiscal 1999 of $42,379,000
increased 21% from $34,969,000 for the first six months of fiscal 1998. During
the first six months of 1999, units shipped increased 31% and the average unit
selling price declined 9% as compared with the first six months of 1998. Sales
to the top five customers represented 44% of total revenues for the first six
months of fiscal 1999 compared to 23% of total revenues for the same period a
year ago.
Product revenues for both the three and six months ended December 28, 1998 are
higher than the comparable periods a year ago as a result of new design wins,
the introduction of new products and a ramp up in products sold to existing
strategic customer accounts.
Sales outside the United States for the second quarter of fiscal 1999 increased
to $7,196,000 or 33% of total revenues, from $5,448,000, or 29% of total
revenues for the second quarter of fiscal 1998. For the six months ended
December 27, 1998, sales outside the United States comprised $13,304,000, or 31%
of total revenues, as compared to $10,697,000, or 31%, for the comparable period
a year ago.
GROSS MARGIN
- ------------
Gross margin of 34% for the second quarter of fiscal 1999 reflected an increase
of 3 percentage points from 31% in the second quarter of fiscal 1998. This
increase is primarily attributable to economies of scale generated by the growth
in production volume and efficiencies gained in manufacturing partially offset
by a decrease in license revenue recorded.
Gross margin of 35% for the first six months of fiscal 1999 reflected an
increase of 4 percentage points from 31% for the first six months of fiscal
1998. This increase is attributable to economies of scale generated by the
growth in product revenues and efficiencies gained in manufacturing.
Additionally, the Company recognized $761,000 in gross margin related to service
and other sales revenues during the first six months of fiscal 1999 compared to
$425,000 for the same period in fiscal 1998.
The Company provides its customers with systems and SBCs requiring long product
life cycles. Gross margins are generally lower during the start up phase of the
product life cycle and have the potential to improve as volume increases. In
order to achieve its gross margin targets, while providing its customers with
competitive pricing, the Company continuously monitors its costs and makes
appropriate pricing revisions, which usually result in lower prices to its
customers. Continued fluctuations in future margin levels may result from the
timing of large design wins and component cost reductions, product mix, and the
level of production efficiencies.
6
<PAGE>
RESEARCH AND DEVELOPMENT EXPENSES
- ---------------------------------
The Company's research and development expenses of $2,309,000 for the second
quarter of fiscal 1999 increased 21% from $1,907,000 for the second quarter of
fiscal 1998. As a percent of revenues, research and development expenses
remained relatively flat at 10% for both the second quarter of fiscal 1999 and
fiscal 1998.
For the first six months of fiscal 1999, research and development expenses
increased to $4,579,000 or 19% from $3,858,000 for the first six months of
fiscal 1998. As a percent of revenues, research and development expenses were
flat at 11% for both the six months of fiscal 1999 and 1998.
The increase in research and development expense for the three and six month
periods ending December 27, 1998 over the same periods in the prior year is due
to continued investment in new product development, primarily in the Calvin and
CompactPCI products, enhancements to existing products and new customer design
wins. In addition, the Company continues its research and development
activities on highly available Intel-based servers.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
- --------------------------------------------
Selling, general and administrative expenses increased 8% to $4,230,000, or 19%
of revenues, for the second quarter of fiscal 1999 from $3,902,000, or 21% of
revenues, for the second quarter of fiscal 1998. The increase in expenses are
primarily due to an increase in enterprise wide computer system implementation
related costs and higher employment costs.
Selling, general and administrative expenses increased 13% to $8,418,000, or 20%
of revenues, for the first six months of fiscal 1999 from $7,477,000, or 21% of
revenues, for the first six months of fiscal 1998. The increase in expenses
compared to the same periods in the prior fiscal year is primarily due to an
increase in enterprise wide computer system implementation related costs, bad
debt write-offs and higher employment costs.
OPERATING INCOME (LOSS)
- -----------------------
The Company reported income from operations of $944,000 for the second quarter
of fiscal 1999, compared to income from operations of $14,000 for the second
quarter of fiscal 1998. The increase in income from operations resulted from
the increase in revenues and a higher gross margin percentage. For the first
six months of fiscal 1999 the Company reported an operating income of
$1,695,000, compared to a loss from operations of $568,000 for the prior year
period. The improved results are attributed to the increase in revenues and
gross margin while minimizing the increase in operating expenses.
INTEREST AND OTHER INCOME
- -------------------------
The Company generated interest income of $78,000 and $177,000 during the three
and six months ended December 27, 1998, as compared to $69,000 and $159,000 for
the comparable periods a year ago. Other income was $133,000 and $203,000
during the three and six months ended December 27, 1998, as compared to $17,000
and $38,000 for the comparable periods a year ago. The increase in other income
is primarily a result of favorable foreign currency translation rate gains in
the first half of fiscal 1999.
INCOME TAXES
- ------------
The Company recorded provisions for income taxes, primarily for alternative
minimum, foreign and state income taxes, of $108,000 and $196,000 for the three
and six months ended December 28, 1998 compared to $28,000 and $46,000 for the
three and six months ended December 28, 1997.
LIQUIDITY AND CAPITAL RESOURCES
At December 27, 1998, the Company had cash and cash equivalents of $4,961,000
and working capital of $19,735,000. This compared to cash and cash equivalents
of $7,568,000 and working capital of $19,523,000 at June 30, 1998.
7
<PAGE>
Cash used in operations was $250,000 for the six months ended December 27, 1998.
Cash used in operating activities resulted primarily from increases in accounts
receivable and inventories associated with the Company's growth partially offset
by increases in accounts payable and accrued liabilities.
The Company's capital expenditures during the six months ended December 28, 1998
increased by $1,741,000 as compared to the same period a year ago, primarily due
to expenditures for a new enterprise wide computer system and manufacturing
equipment. Capital expenditures for the remaining portion of fiscal 1999 are
expected to be less than the level experienced in the first half of fiscal 1999.
The Company believes that its present cash flow and cash balances are adequate
for its operating needs and capital expenditures through fiscal 1999.
In June 1997, the FASB issued SFAS No. 131, "Disclosure about Segments of an
Enterprise and Related Information". The Company intends to adopt this standard
in the fourth quarter of fiscal year 1999. SFAS No. 131 establishes standards
for reporting information about operating segments in annual financial
statements and requires selected information about operating segments in interim
financial reports issued to stockholders. It also establishes standards for
related disclosures about products and services, geographic areas and major
customers. This Statement supersedes SFAS No. 14, "Financial Reporting for
Segments of a Business Enterprise", but retains the requirement to report
information about major customers. SFAS No. 131 is not expected to have a
material impact on the Company's consolidated financial statements.
YEAR 2000 COMPLIANCE
Many computer systems and imbedded chips may experience problems handling dates
beyond the year 1999. Therefore, some devices containing imbedded chips and
computer hardware and software will need to be modified prior to the Year 2000
in order to remain functional. In response to these Year 2000 issues, the
Company has assigned a project team to assess the readiness of its internal
business processes, non-financial software and imbedded chip systems, products
sold to customers and external noncompliance by customers and suppliers for
handling the Year 2000. The Company has created a website at www.texasmicro.com
containing additional information about the Year 2000 issue and the Company's
compliance program.
INTERNAL BUSINESS PROCESSES. During fiscal 1999, as part of a business
modernization program intended to reduce cycle time and improve profitability,
the Company purchased an enterprise wide computer system, which the software
vendor has indicated, is Year 2000 compliant. The total estimated hardware,
software and installation cost for this new system is approximately $3 million
of which approximately $1.9 million has been spent to date. The Company is
currently in the implementation phase for this system with full implementation
to be completed by September 1999. Based on this schedule, the Company expects
to be in full compliance with its internal financial systems before the Year
2000. However, if due to unforeseen circumstances, the implementation is not
completed on a timely basis, the Year 2000 could have a material impact on the
operations of the Company. Contingency plans have been established in a few
areas where the Company believes there is some risk that the system will not be
implemented before Year 2000. Those plans include adapting or replacing some of
the Company's currently existing systems to make them Year 2000 compliant. The
cost of making those adaptations are not expected to be material and will be
expensed in the period incurred.
INTERNAL NON-FINANCIAL SOFTWARE AND IMBEDDED CHIP TECHNOLOGY. The Company is in
the assessment phase with regard to non-financial software and imbedded chip
systems and is currently assessing the impact of the Year 2000 on its non-
financial systems such as manufacturing equipment, security equipment, etc.,
with Year 2000 compliance scheduled for September 1999. The Company does not,
at this time, have sufficient data to estimate the cost of achieving Year 2000
compliance for its major non-financial systems and as such, the costs of
achieving Year 2000 compliance could have a material impact on the operations of
the Company. Since the Company is in the assessment phase, the Company does not
currently have a formal contingency plan in place for its internal non-financial
software and imbedded chip systems. A Year 2000 failure with respect to certain
of the Company's non-financial systems such as manufacturing equipment could
have a material adverse affect on the Company's financial condition and results
of operations.
8
<PAGE>
PRODUCTS SOLD TO CUSTOMERS. The Company believes that it has substantially
identified and resolved all potential Year 2000 problems with any of the
hardware products which it currently develops and markets. However, management
also believes that it is not possible to determine with complete certainty that
all Year 2000 problems affecting the Company's hardware products have been
identified or corrected due to the complexity of these products and the fact
that these products interact with other third party vendor products and operate
with software or in systems which are not under the Company's control.
EXTERNAL NONCOMPLIANCE BY CUSTOMERS AND SUPPLIERS. The Company is also
contacting critical suppliers of products and services to determine that the
suppliers' and service providers' operations and the products and services they
provide are Year 2000 capable or to monitor their progress toward Year 2000
capability. To the extent that responses to Year 2000 readiness are
unsatisfactory, the Company intends to change suppliers or service providers to
those who have demonstrated Year 2000 readiness. No assurances can be given
that the Company will be successful in finding such alternative suppliers and
service providers. In the event that any of the Company's significant suppliers
do not successfully and timely achieve Year 2000 compliance, and the Company is
unable to replace them with alternate suppliers, the Company's business or
operations could be adversely affected.
The Company does not currently have any formal information concerning the Year
2000 compliance status of its customers but has received indications that many
of its customers are working on Year 2000 compliance. In the event that any of
the Company's significant customers do not successfully and timely achieve Year
2000 compliance, the Company's business or operations could be adversely
affected through a delay by the customer in placing orders with the Company or
delays in payments due the Company.
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
Statements in this Quarterly Report on Form 10-Q that relate to future results
or events are based on the Company's current expectations. There are many
factors that affect the Company's business and the results of its operations and
may cause the actual results to differ materially from those expected, projected
or contained in forward-looking statements. These factors include technological
changes and the ability of the Company to develop new products; the customer
demand and market acceptance of the Company's products; the ability of the
Company to manage its inventory levels to minimize excess inventory, declining
inventory values and obsolescence; the risks and uncertainties relating to the
Company's foreign operations including foreign currency fluctuations and
intellectual property risk and risks associated with the Year 2000 issue. For a
discussion of these and other factors affecting the Company's business, see
"ITEM 1. BUSINESS -- Certain Factors That May Affect Future Results" in the
Company's Annual Report on Form 10-K for the fiscal year ended June 30, 1998 and
the preceding section, "Year 2000 Compliance."
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is from time to time a party to various lawsuits arising in the
ordinary course of business. The Company knows of no pending litigation which
is reasonably likely to have a material adverse impact on its financial
condition or its results of operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Company's Annual Meeting of Stockholders held on December 3, 1998, the
following proposals were adopted by the vote specified below:
Proposal 1 - Election of Directors
Proposal 2 - Amend the Company's 1993 Employee Stock Purchase Plan by extending
its termination date by two years, from June 30, 1999 until June 30, 2001, and
permitting employee purchases thereunder until such date.
Proposal 3 - Amend the Company's 1995 Outside Directors Stock Option Plan by
extending its termination date by three years, from July 1, 1999 until July 1,
2002.
9
<PAGE>
Proposal 4 - Ratification of the appointment of PricewaterhouseCoopers LLP as
the Company's Independent Accountants.
For Withheld Against Abstain No Vote
--- -------- ------- ------- -------
Proposal 1 -
Francis J. Hughes, Jr. 11,607,084 100,026 - - -
A. Theodore Englevist 11,606,184 100,926 - - -
Dennis M. Malloy 11,608,684 98,426 -
Proposal 2 11,386,256 - 294,753 25,831 -
Proposal 3 11,037,178 - 653,237 16,695 -
Proposal 4 11,668,157 - 29,114 9,839 -
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
10.30 Amendment No. 2 to the 1993 Employee Stock Purchase
Plan, adopted December 3, 1998.
10.31 Amendment No. 1 to the 1995 Outside Directors' Stock
Option Plan, adopted December 3, 1998.
27 Financial Data Schedule
b) Reports on Form 8-K
None.
10
<PAGE>
SIGNATURES
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, thereunto duly authorized.
TEXAS MICRO INC.
Date: February 5, 1999 By: /s/ J. Michael Stewart
----------------------------
J. Michael Stewart
President and Chief Executive Officer
Date: February 5, 1999 By: /s/ Kermit R. Sumrall
----------------------------
Kermit R. Sumrall
Secretary and Acting Chief Financial Officer
Date: February 5, 1999 By: /s/ Michael L. Baudler
----------------------------
Michael L. Baudler
Controller
11
<PAGE>
EXHIBIT 10.30
TEXAS MICRO INC.
AMENDMENT NO. 3 TO THE 1993 EMPLOYEE STOCK PURCHASE PLAN
EFFECTIVE DECEMBER 3, 1998
The 1993 Employee Stock Purchase Plan (the "Plan") is hereby amended by deleting
Paragraph 4, OFFERING DATES, and replacing it with the following:
OFFERING DATES
The Plan will be implemented by twelve (12) semi-annual offerings of
shares of Common Stock (referred to herein individually and collectively
as the "Offerings") during the period commencing July 1, 1999 and
terminating June 30, 2001. The first four Offerings shall each be of a
maximum of 62,500 shares (subject to adjustment as provided in Paragraphs
12(a) and 17), the second four Offerings shall each be of a maximum of
125,000 shares and the third four Offerings, commencing July 1, 1999 and
ending June 30, 2001, shall include only those shares of Common Stock as
were not purchased in one or more of the first eight Offerings (as the
number of such shares may be subject to adjustment as provided in
Paragraphs 12(a) and 17).
This Amendment shall be effective from and after December 3, 1998. Except as
specified above, all terms and conditions of the Plan remain in full force and
effect.
Texas Micro Inc.
By /s/ J. Michael Stewart
----------------------------
J. Michael Stewart
President and CEO
Attest: /s/ K.R. Sumrall December 3, 1998
------------------- -----------------------------
K.R. Sumrall Date
<PAGE>
EXHIBIT 10.31
TEXAS MICRO INC.
AMENDMENT NO. 1 TO THE 1995 OUTSIDE DIRECTORS' STOCK OPTION PLAN
EFFECTIVE DECEMBER 3, 1998
The 1995 Outside Directors' Stock Option Plan (the "Directors' Plan") is hereby
amended by deleting Paragraph 5 (a)(II), SUBSEQUENT GRANTS, and replacing it
with the following:
Subsequent Grants.
A fully vested option to purchase 2,500 shares of the Common Stock shall
be granted automatically to each outside director on each July 1 from July
1, 1995 through and including June 30, 2002, provided, that he or she is
an eligible director on the date of grant of such option.
This Amendment shall be effective from and after December 3, 1998. Except as
specified above, all terms and conditions of the Directors' Plan remain in full
force and effect.
Texas Micro Inc.
By /s/ J. Michael Stewart
-----------------------------
J. Michael Stewart
President and CEO
Attest: /s/ K.R. Sumrall December 3, 1998
-------------------- -----------------------------
K.R. Sumrall Date
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0000724621
<NAME> TEXAS MICRO INC.
<MULTIPLIER> 1,000
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> SEP-28-1998
<PERIOD-END> DEC-27-1998
<EXCHANGE-RATE> 1
<CASH> 4,961
<SECURITIES> 0
<RECEIVABLES> 14,699
<ALLOWANCES> 857
<INVENTORY> 11,676
<CURRENT-ASSETS> 32,067
<PP&E> 12,598
<DEPRECIATION> 7,346
<TOTAL-ASSETS> 37,463
<CURRENT-LIABILITIES> 4,705
<BONDS> 0
0
0
<COMMON> 6,257
<OTHER-SE> 18,874
<TOTAL-LIABILITY-AND-EQUITY> 37,673
<SALES> 41,117
<TOTAL-REVENUES> 42,379
<CGS> 27,186
<TOTAL-COSTS> 27,687
<OTHER-EXPENSES> 12,997
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,075
<INCOME-TAX> 196
<INCOME-CONTINUING> 1,879
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,879
<EPS-PRIMARY> 0.14
<EPS-DILUTED> 0.14
</TABLE>
