<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 JUNE 30, 2002

[  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934
         FOR THE TRANSITION PERIOD FROM ________ TO __________

                        COMMISSION FILE NUMBER 000-24677

                        BINDVIEW DEVELOPMENT CORPORATION
             (Exact name of registrant as specified in its charter)

                     TEXAS                          76-0306721
        (State or other jurisdiction of          (I.R.S. Employer
        incorporation or organization)          Identification No.)

   5151 SAN FELIPE, 25th FLOOR, HOUSTON, TX           77056
   (Address of principal executive offices)         (Zip code)

                                 (713) 561-4000
              (Registrant's telephone number, including area code)

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 such
filing requirements for the past 90 days. Yes [X] No [ ]

As of August 12, 2002, the Company had 51,763,613 shares of Common Stock, no par
value, outstanding.

================================================================================



<PAGE>

                          PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                        BINDVIEW DEVELOPMENT CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                                 JUNE 30,        DECEMBER 31,
                                                                                   2002              2001
                                                                               ------------      ------------
                                                                               (UNAUDITED)
<S>                                                                            <C>               <C>
                               ASSETS
Current assets:
     Cash and cash equivalents                                                 $     43,662      $     39,791
     Short-term investments                                                              --             3,253
     Accounts receivable, net of allowance of $1,254 and $1,097                       8,295            10,344
     Other                                                                            1,041             1,180
                                                                               ------------      ------------
          Total current assets                                                       52,998            54,568
     Property and equipment, net                                                      9,159             9,221
     Deferred income taxes                                                               --            19,562
     Other                                                                            4,752             4,770
                                                                               ------------      ------------
                 Total assets                                                  $     66,909      $     88,121
                                                                               ============      ============

                     LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Accounts payable                                                          $      3,549      $      1,763
     Accrued liabilities                                                              4,301             4,954
     Accrued compensation                                                             2,999             4,051
     Deferred revenues                                                               12,237            10,350
                                                                               ------------      ------------
          Total current liabilities                                                  23,086            21,118

Deferred revenues                                                                     2,188             2,618
Other liabilities                                                                       148               576

Commitments and contingencies

Shareholders' equity:
     Common stock, no par value, 100,000 shares authorized, 51,729 and
         54,375 shares issued                                                             1                 1
     Additional paid-in capital                                                     109,519           121,884
     Accumulated deficit                                                            (66,855)          (43,965)
     Accumulated other comprehensive loss                                              (211)             (185)
     Less -- notes receivable from shareholders                                        (927)           (1,188)
     Less -- 29 and 2,998 shares of common stock held in treasury, at cost              (40)          (12,738)
                                                                               ------------      ------------
           Total shareholders' equity                                                41,487            63,809
                                                                               ------------      ------------
                 Total liabilities and shareholders' equity                    $     66,909      $     88,121
                                                                               ============      ============
</Table>



            See notes to unaudited consolidated financial statements.



                                       2
<PAGE>

                        BINDVIEW DEVELOPMENT CORPORATION
                CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<Table>
<Caption>
                                              THREE MONTHS                SIX MONTHS
                                             ENDED JUNE 30,              ENDED JUNE 30,
                                         ----------------------      ----------------------
                                           2002          2001          2002          2001
                                         --------      --------      --------      --------
<S>                                      <C>           <C>           <C>           <C>
Revenues:
   Licenses                              $  7,623      $ 10,296      $ 17,165      $ 20,049
   Services                                 7,380         7,222        14,643        14,486
                                         --------      --------      --------      --------
                                           15,003        17,518        31,808        34,535
                                         --------      --------      --------      --------

Cost of revenues:
   Licenses                                    93           301           249           636
   Services                                 1,358         1,908         2,928         3,420
                                         --------      --------      --------      --------
                                            1,451         2,209         3,177         4,056
                                         --------      --------      --------      --------

Gross profit                               13,552        15,309        28,631        30,479

Operating costs and expenses:
   Sales and marketing                      9,515        14,836        19,878        27,794
   Research and development                 4,949         5,974         9,968        11,904
   General and administrative               1,909         5,844         3,818         8,524
   Restructuring                               --            --            --           594
                                         --------      --------      --------      --------

Operating loss                             (2,821)      (11,345)       (5,033)      (18,337)

Other income                                  146           464         1,705         1,349
                                         --------      --------      --------      --------

Loss before income taxes                   (2,675)      (10,881)       (3,328)      (16,988)
Provision (benefit) for income taxes       19,791        (3,167)       19,562        (4,999)
                                         --------      --------      --------      --------
Net Loss                                 $(22,466)     $ (7,714)     $(22,890)     $(11,989)
                                         ========      ========      ========      ========

Loss per common share - basic and
    Diluted                              $  (0.43)     $  (0.15)     $  (0.44)     $  (0.23)
                                         ========      ========      ========      ========
</Table>



            See notes to unaudited consolidated financial statements.



                                       3
<PAGE>

                        BINDVIEW DEVELOPMENT CORPORATION
                CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                 (IN THOUSANDS)

<Table>
<Caption>
                                                                               SIX MONTHS ENDED
                                                                                   JUNE 30,
                                                                            ----------------------
                                                                              2002          2001
                                                                            --------      --------
<S>                                                                         <C>           <C>
Cash flows from operating activities:
     Net loss                                                               $(22,890)     $(11,989)
      Adjustments to reconcile net loss to net cash provided
      by (used in) operating activities:
          Depreciation and amortization                                        2,205         3,160
          Bad debt expense                                                        --         2,812
          Deferred income tax expense (benefit)                               19,562        (4,999)
          Other                                                                   48            --
          Changes in operating assets and liabilities:
               Accounts receivable                                             1,910         8,958
               Other assets                                                      186           127
               Accounts payable                                                1,516        (2,845)
               Accrued liabilities                                            (2,036)        1,657
               Deferred revenues                                               1,371          (502)
                                                                            --------      --------
                    Net cash provided by (used in) operating activities        1,872        (3,621)
                                                                            --------      --------

Cash flows from investing activities:
     Capital expenditures                                                     (2,086)       (1,923)
     Net proceeds from maturity of investments                                 3,253         6,705
     Other                                                                        25            --
                                                                            --------      --------
                    Net cash provided by investing activities                  1,192         4,782
                                                                            --------      --------

Cash flows from financing activities:
     Repurchase of common stock                                                  (40)       (7,075)
     Net proceeds from sale of common stock                                      374         1,754
                                                                            --------      --------
                    Net cash provided by (used in) financing activities          334        (5,321)

Effect of exchange rate changes on cash                                          473          (153)
                                                                            --------      --------
Net increase (decrease) in cash and cash equivalents                           3,871        (4,313)
Cash and cash equivalents at beginning of year                                39,791        49,337
                                                                            --------      --------
Cash and cash equivalents at end of period                                  $ 43,662      $ 45,024
                                                                            ========      ========

Non- cash financing and investing activities:
  Reduction of shareholder note in lieu of guaranteed bonus                 $    261      $     --

  Note receivable from shareholder in exchange for
    400,000 shares of common stock                                          $     --      $  1,044
</Table>



            See notes to unaudited consolidated financial statements.



                                       4
<PAGE>

                        BINDVIEW DEVELOPMENT CORPORATION
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS


1.       GENERAL

         The accompanying consolidated financial statements of BindView
Development Corporation, a Texas corporation (the "Company" or "BindView"),
included herein have been prepared without audit pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, certain
information and disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been omitted.
The Company believes that the presentations and disclosures herein are adequate
to make the information not misleading. The consolidated financial statements
reflect all adjustments (consisting of normal recurring adjustments) necessary
for a fair presentation of the interim periods. Certain accounts in the
consolidated financial statements for 2001, as previously presented, have been
reclassified to conform with current year classifications.

         The results of operations for the interim periods are not necessarily
indicative of the results of operations to be expected for the full year. These
consolidated financial statements should be read in conjunction with the
Company's audited consolidated financial statements included in its Annual
Report on Form 10-K for the year ended December 31, 2001.


2.       LOSS PER SHARE

         The following table sets forth the computation of basic and diluted
loss per share (in thousands, except per share amounts):

<Table>
<Caption>
                                              THREE MONTHS                 SIX MONTHS
                                             ENDED JUNE 30,              ENDED JUNE 30,
                                         ----------------------      ----------------------
                                           2002          2001          2002          2001
                                         --------      --------      --------      --------
<S>                                      <C>           <C>           <C>           <C>
Numerator:
   Net loss - numerator for
     loss per share - basic and
     diluted                             $(22,466)     $ (7,714)     $(22,890)     $(11,989)
                                         ========      ========      ========      ========

Denominator:
   Denominator for basic loss per
     share - weighted-average shares       51,719        51,632        51,653        51,577

   Effect of dilutive securities               --            --            --            --
                                         --------      --------      --------      --------
        Total diluted shares               51,719        51,632        51,653        51,577
                                         ========      ========      ========      ========

Loss per common share - basic and
   diluted                               $  (0.43)     $  (0.15)     $  (0.44)     $  (0.23)
                                         ========      ========      ========      ========
</Table>

         Options and warrants to purchase 9.8 million shares of common stock for
the three and six months ended June 30, 2002 and 13.1 million shares of common
stock for the three and six months ended June 30, 2001 were outstanding, but
were not included in the computation of diluted loss per share as their
inclusion would have been anti-dilutive.

3.       RESTRUCTURING EXPENSES AND ASSET IMPAIRMENTS

         In 2001, the Company completed a corporate reorganization and
implemented a number of cost-cutting measures to improve operating efficiency
and to accelerate the Company's return to profitability. The cost of this plan
totaled approximately $6.6 million and consisted primarily of (i) involuntary
employee separation for approximately 160 employees (a reduction in workforce of
approximately 21 percent), (ii) closing or downsizing of the Company's Boston
and Arlington development centers and certain European sales offices, (iii)
reserves for leasehold abandonment (net of expected sublease rentals of
approximately $3.0 million), and (iv) various non-personnel related cuts. The
restructuring costs included a $1.2 million charge related to asset impairments
of



                                       5
<PAGE>

                        BINDVIEW DEVELOPMENT CORPORATION
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


leasehold improvements, equipment and other assets of the closed or downsized
offices. The costs of the plan were based on management's best estimate based on
information available at the time. Subsequent to recording the charge, the cost
of employee severances increased for certain foreign employees and the Company's
estimate of sublease rentals for certain leased property increased resulting in
a reduction to the Company's lease commitment obligations, which is reflected
below in the Adjustments column.

         The accrued restructuring expenses and amounts charged against the
provision as of June 30, 2002 were as follows (in thousands):


<Table>
<Caption>
                                                                                                                     REMAINING
                                        RESTRUCTURING                            CASH                                 ACCRUAL
                                           CHARGES         ADJUSTMENTS       EXPENDITURES        WRITE-OFFS        JUNE 30, 2002
                                        -------------     -------------      -------------      -------------      -------------
<S>                                     <C>               <C>                <C>                <C>                <C>
Employee severance ...................  $       2,791     $         809      $      (3,562)     $          --      $          38
Lease commitments ....................          2,182              (987)              (894)                --                301
Office closure costs .................            111               (22)               (89)                --                 --
Asset impairments ....................          1,169                --                 --             (1,169)                --
Other restructuring costs ............            341               200               (507)                --                 34
                                        -------------     -------------      -------------      -------------      -------------
                                        $       6,594     $          --      $      (5,052)     $      (1,169)     $         373
                                        =============     =============      =============      =============      =============
</Table>

4.       INCOME TAXES

         The Company follows the liability method of accounting for income
taxes. Under this method, deferred income tax assets and liabilities are
determined based on differences between the financial statement and income tax
bases of assets and liabilities using enacted tax rates in effect for the year
in which the differences are expected to reverse.

         At June 30, 2002, the Company had net operating loss ("NOL")
carryforwards of approximately $77 million available to offset future taxable
income. These NOL carryforwards expire between 2003 and 2021. The deferred tax
assets, such as those relating to net operating losses, reflect the estimated
benefit of using the net operating loss carryforward to reduce future taxable
income. As required by Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes", the Company continued its assessments of the
realization of its deferred tax assets and as a result, concluded that a full
valuation allowance of $19.8 million was appropriate at June 30, 2002.

         As in its prior assessments, the Company considered its current and
previous performance and other relevant factors in determining the sufficiency
of its valuation allowance. Objective factors, such as current and previous
operating losses, were given substantially more weight than management's outlook
for future profitability. Management remains optimistic about the future
prospects of the Company's business and the industry and continues to believe
that over time, as the market improves, the Company should generate sufficient
taxable income to utilize a substantial portion of its net operating loss
carryforwards. Until such time as a consistent pattern of sufficient
profitability is established, no tax benefit will be recognized associated with
the Company's pre-tax accounting losses and a full income tax provision will not
be provided on any future pre-tax accounting income.

5.       SHAREHOLDERS' EQUITY

         In February 2002, the Company retired 3.0 million shares of its common
stock held in treasury, which is reflected in the accompanying consolidated
balance sheet at June 30, 2002.



                                       6
<PAGE>

                        BINDVIEW DEVELOPMENT CORPORATION
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


6.       SUBSEQUENT EVENT

         In July 2002, the Company approved a restructuring plan to improve
operating efficiency that includes: (i) a reduction of research and development
resources in Houston by shifting more of the development of certain products to
its lower cost India development center, (ii) a streamlining of sales management
and (iii) various non-personnel related cuts. The Company estimates it will take
a restructuring charge between $1.5 million and $2.0 million in the third
quarter of 2002 for expected costs to be incurred as a result of implementing
this plan.



                                       7
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

         Management's Discussion and Analysis of Financial Condition and Results
of Operations contain forward-looking statements which involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward-looking statements. Factors that might cause
such a difference include those discussed in the "Risk Factors" set forth in the
Company's Annual Report on Form 10-K for the year ended December 31, 2001, as
well as other factors such as, for example: the risks associated with lower
customer demand in a weak economy; increased competition within the network
management software industry; the effects of recently-implemented cost
reductions on the Company's business; transitional inefficiencies that may arise
during the Company's implementation of recently-announced reorganization plans;
and the management challenges of implementing those plans while attempting to
maintain employee motivation and effectiveness. The following discussion should
be read in conjunction with the Company's Consolidated Financial Statements.

OVERVIEW

         BindView Development Corporation ("BindView" or the "Company") delivers
proactive network security-management software and services to help secure,
automate and lower the costs of managing information technology infrastructures.
Our software helps safeguard our customers' computer networks from the inside
out, working to protect those networks from both internal and external threats,
while also helping to lower our customers' overall cost of ownership through
automation of numerous administrative tasks and security reporting requirements.

CRITICAL ACCOUNTING POLICIES

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the Company's Consolidated
Financial Statements and Notes thereto. Actual results could differ from those
estimates. BindView believes the following critical accounting policies affect
its more significant estimates and assumptions used in the preparation of its
Consolidated Financial Statements and Notes thereto.

Revenue Recognition

         We generate the large majority of our revenue from licenses of our
software. We also generate revenue from sales of maintenance service agreements
and, to a lesser extent, consulting and training services. Our service revenue
has increased in recent periods as the size of our installed base has grown. Our
customers typically purchase one year of maintenance with their initial license
of our products.

         We sell our products principally through both our direct sales force,
which includes our direct sales and telesales personnel, as well as through
indirect channels, such as distributors, value-added resellers ("VARs") and
original equipment manufacturers ("OEMs").

         We follow Statement of Position 97-2, "Software Revenue Recognition"
("SOP 97-2") and Statement of Position 98-9, "Modification of SOP 97-2, Software
Revenue Recognition with respect to certain transactions" ("SOP 98-9"), in
accounting for revenues. We primarily license our software products under
perpetual licenses. Revenues are recognized under these arrangements once the
following criteria are met: (i) a written purchase order,



                                       8
<PAGE>

license agreement or contract has been executed; (ii) software, or software
license authorization code in situations where the customer previously received
evaluation software, has been delivered to the customer; (iii) license
agreements with no significant vendor obligations or customer acceptance rights
outstanding have been issued to the customer; (iv) the license fee is fixed and
determinable and collection of the fee is probable; and (v) vendor-specific
objective evidence exists to allocate the total fee. Vendor-specific objective
evidence is based on the price generally charged when an element is sold
separately. In situations where vendor-specific objective evidence does not
exist, and all other revenue recognition criteria have been met, revenue is
recognized ratably over the life of the agreement. If installation is essential
to the functionality of the software, revenue is deferred until completion of
the installation.

         Revenues from maintenance contracts and other related services are
reported as service revenue. Customers are generally required to purchase a
one-year maintenance agreement in conjunction with their initial licensing of
the Company's software products and may elect to purchase up to three years of
maintenance. Maintenance revenues are recognized ratably over the contract term.
The portion of maintenance contract revenues that have not yet been recognized
as revenues is reported as deferred revenue in the accompanying Consolidated
Balance Sheets. Deferred maintenance revenue, which has not been collected is
not recognized. In addition to deferred maintenance, deferred revenues also
include services which have been billed but not performed or license contracts
for which the aforementioned revenue recognition criteria have not been met.

         Sales made through distributors, VARs, and OEMs are recognized upon
execution of a written purchase order, license agreement or contract with either
the reseller or end user and after all revenue recognition criteria previously
noted have been met. We perform ongoing credit evaluations and assessments of
the financial viability of our customers, including distributors, VARs and OEMs,
in determining whether or not revenue recognition is appropriate.

Stock Options

         We follow Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, in accounting for our employee stock options, which
generally provides that no compensation expense is recognized when options are
granted with an exercise price equal to fair market value on the date of the
grant.

Income Taxes

         We follow the liability method of accounting for income taxes. Under
this method, deferred income tax assets and liabilities are determined based on
differences between the financial statement and income tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse. Valuation allowances may also be provided
based upon subjective evaluations of facts, circumstances and expectations,
which may change over the course of time and may result in significant changes
in our tax provision. Each reporting period, we will evaluate the ultimate
recovery of our deferred tax assets and if we believe it is more likely than not
that the asset will not be utilized to the extent of the carrying amount on the
balance sheet, we will provide an additional valuation allowance on the portion
that we estimate is not expected to be recoverable.

Accounts Receivable and Provision for Doubtful Accounts

         We provide an allowance for doubtful accounts when collection is
considered doubtful. We perform ongoing credit evaluations of our customers,
review our collection efforts and analyze our payment experience with specific
customers in order to determine whether or not collection is doubtful. There may
be a significant fluctuation in our provision for doubtful accounts to the
extent that our subjective evaluation of the facts, circumstances and
expectations change.

RESULTS OF OPERATIONS

THREE MONTHS ENDED JUNE 30, 2002 COMPARED WITH THE THREE MONTHS ENDED JUNE 30,
2001

         REVENUES. Revenues for the current quarter decreased 14.4 percent to
$15.0 million, from $17.5 million for the second quarter of 2001. This reduction
in revenues related primarily to a decline in license revenues. License



                                       9
<PAGE>

revenues for the quarter were $7.6 million, compared with $10.3 million for the
second quarter of 2001. This decline reflected a lengthening of the sales cycle
for large enterprise transactions and lower than expected sales in Europe due to
the difficult economic environment. Service revenues increased 2.2 percent to
$7.4 million, from $7.2 million for the second quarter 2002.

         License revenues from our North American operations totaled $6.8
million, or approximately 89 percent of total license revenues in the second
quarter of 2002, down from $9.4 million, or approximately 91 percent of revenues
in the second quarter of 2001. The decline in license revenue is primarily
attributable to (i) the Company experiencing a lengthening sales cycle for
larger transactions ($250 thousand or higher) and (ii) lower productivity in
certain geographic areas. In July 2002, the Company reorganized its sales
management, realigned certain sales teams and put into place other enhancements
to the sales process to raise sales productivity levels.

         License revenues from our European operations were approximately $0.8
million, down from $0.9 million in the second quarter of 2001. To improve sales
efficiency in Europe, we are making changes in European sales management and
will focus additional efforts on training and sales support, as well as
increased executive-level involvement in larger opportunities.

         GROSS PROFIT. Gross profit for the current quarter totaled $13.6
million, which was down from $15.3 million in the second quarter of 2001. The
decrease in gross profit related to the decline in license revenues. Gross
margin for the current quarter was 90.3 percent compared with 87.4 percent in
the second quarter of 2001. The expansion in gross margin reflected the
improvement in operating leverage in our technical support and professional
services units as a result of our restructuring initiatives.

         OPERATING COSTS AND EXPENSES. Operating costs and expenses for the
current quarter totaled $16.4 million, down from $26.7 million for the second
quarter of 2001. The improvement was primarily the result of the Company's 2001
corporate reorganization and restructuring, as well as additional actions taken
to improve operating efficiency.

         Sales and marketing expenses for the current quarter decreased 35.8
percent to $9.5 million, from $14.8 million for the second quarter of 2001. The
significant level of spending in the second quarter of 2001 primarily related
to: (i) building and maintaining an enterprise sales force focused exclusively
on increasing sales to large enterprise customers and (ii) expanding the
Company's European sales offices. Because of the difficult operating
environment, these investments did not generate sufficient revenues to justify
their cost and were significantly reduced as part of our restructuring that took
place in mid-2001. As a result of this restructuring, we reduced the Company's
quarterly sales and marketing expenses to pre-build up levels. Furthermore, we
believe the restructuring initiatives currently underway, as well as our
anticipated growth in revenues will reduce sales and marketing expenses as a
percentage of revenues going forward.

         Research and development expenses for the current quarter decreased
17.2 percent to $4.9 million, from $6.0 million for the second quarter of 2001.
This decrease primarily related to the closing or downsizing of the Company's
development offices in Boston, Massachusetts and Arlington, Virginia and
consolidating those development activities into existing development centers in
Houston, Texas and Pune, India. We expect future research and development
expenses to decrease as a percentage of revenues as a result of our prior and
current restructuring initiatives as well as our anticipated growth in future
revenues.

         General and administrative expenses for the current quarter decreased
67.3 percent to $1.9 million, from $5.8 million for the second quarter of 2001.
This decrease primarily related to the reduction in administrative expenses
related to our restructuring initiatives and a $2.6 million provision for bad
debts taken in the second quarter of 2001. We expect future general and
administrative expenses to decrease as a percentage of revenues as a result of
restructuring initiatives commenced in late 2001 to improve operating
efficiencies as well as our anticipated growth in future revenues.

         In 2001, the Company completed a corporate reorganization and
implemented a number of cost-cutting measures to improve operating efficiency
and to accelerate the Company's return to profitability. The cost of this plan
totaled approximately $6.6 million, of which $0.6 million was incurred in the
first quarter of 2001 and $6.0 million was incurred in the third quarter of
2001, and consisted primarily of (i) involuntary employee separation for



                                       10
<PAGE>

approximately 160 employees (a reduction in workforce of approximately 21
percent), (ii) closing or downsizing of the Company's Boston and Arlington
development centers and certain European sales offices, (iii) reserves for
leasehold abandonment (net of expected sublease rentals of approximately $3.0
million), and (iv) various non-personnel related cuts. The restructuring costs
included a $1.2 million charge related to asset impairments of leasehold
improvements, equipment and other assets of the closed or downsized offices. The
costs of the plan were based on management's best estimate based on information
available at the time. Subsequent to recording the charge, the cost of employee
severances increased for certain foreign employees and the Company's estimate of
sublease rentals for certain leased property increased resulting in a reduction
in the Company's lease commitment obligation, which is reflected below in the
Adjustments column.

         The accrued restructuring expenses and amounts charged against the
provision as of June 30, 2002 were as follows (in thousands):


<Table>
<Caption>
                                                                                                                REMAINING
                                   RESTRUCTURING                            CASH                                 ACCRUAL
                                      CHARGES         ADJUSTMENTS       EXPENDITURES        WRITE-OFFS        JUNE 30, 2002
                                   -------------     -------------      -------------      -------------      -------------
<S>                                <C>               <C>                <C>                <C>                <C>
Employee severance ...........     $       2,791     $         809      $      (3,562)     $          --      $          38
Lease commitments ............             2,182              (987)              (894)                --                301
Office closure costs .........               111               (22)               (89)                --                 --
Asset impairments ............             1,169                --                 --             (1,169)                --
Other restructuring costs ....               341               200               (507)                --                 34
                                   -------------     -------------      -------------      -------------      -------------
                                   $       6,594     $          --      $      (5,052)     $      (1,169)     $         373
                                   =============     =============      =============      =============      =============
</Table>


         OTHER INCOME. Other income totaled $0.1 million and $0.5 million for
the three months ended June 30, 2002 and 2001, respectively. The decline in
other income was the result of lower interest rates as well as lower investment
balances during the period.

         PROVISION (BENEFIT) FOR INCOME TAXES. The Company provided a full
valuation allowance against the deferred tax assets of $19.8 million in the
current quarter, compared with a tax benefit of $3.2 million (an effective tax
rate of 29.1 percent) for the second quarter of 2001. As required by Statement
of Financial Accounting Standards No. 109, "Accounting for Income Taxes", the
Company continued its assessments of the realization of its deferred tax assets
and as a result, concluded that a full valuation allowance was appropriate at
June 30, 2002.

         As in its prior assessments, the Company considered its current and
previous performance and other relevant factors in determining the sufficiency
of its valuation allowance. Objective factors, such as current and previous
operating losses, were given substantially more weight than management's outlook
for future profitability. Management remains optimistic about the future
prospects of the Company's business and the industry and continues to believe
that over time, as the market improves, the Company should generate sufficient
taxable income to utilize a substantial portion of its net operating loss
carryforwards. Until such time as a consistent pattern of sufficient
profitability is established, no tax benefit will be recognized associated with
the Company's pre-tax accounting losses and a full income tax provision will not
be provided on any future pre-tax accounting income.

         NET LOSS. Due to the factors described above, net loss for the quarter
ended June 30, 2002 was $22.5 million compared with $7.7 million for the quarter
ended June 30, 2001.

         OUTLOOK. The Company expects revenues for the second half of 2002 to
range between $35.0 million and $40.0 million. At these revenue levels, the
Company expects to generate positive operating income and cash flows for the
second half of 2002, before the effects of any restructuring charges discussed
below. Excluding the restructuring charge of $1.5 million to $2.0 million,
described below, that the Company plans to take in the third quarter of 2002,
net income is expected to range between $1.0 million, or $0.02 per share, and
$4.0 million, or $0.08 per share, for the second half of 2002. The Company's
ability to achieve or exceed these estimates will depend on the expected
increase in IT security spending and continued improvement in the Company's
sales execution and marketing effectiveness.



                                       11
<PAGE>

         In July 2002 the Company approved a plan to improve operating
efficiency that includes a reduction of research and development resources in
Houston by shifting more of the development of certain products to its lower
cost India development center, a streamlining of its sales management and
various non-personnel related cuts. The restructuring includes eliminating the
chief operating officer position going forward and consolidating operations
across all sales and marketing functions under two new positions that are being
created for vice president of worldwide sales and vice president of worldwide
marketing.

         Management believes that this restructuring will both reduce expenses
and result in more effective sales and marketing operations going forward. Most
of the actions under the plan will be completed by the end of the third quarter
of 2002 and upon its full implementation, the Company expects to be able to
generate positive operating income on quarterly revenues of approximately $16.7
million. The Company expects to take a charge of $1.5 million to $2.0 million in
the third quarter of 2002 for the costs of the restructuring under the plan.
Restructuring costs are expected to consist primarily of employee severance and
leasehold abandonment costs.

         Early in the third quarter of 2002, William D. Miller, the Company's
chief operating officer, resigned to accept a management position with another
company. Mr. Miller's sales management responsibilities have been transferred to
Kenneth D. Naumann, who has been promoted to vice president of worldwide sales.
Mr. Naumann was formerly vice president of sales for the Americas. The Company
has begun a search for a senior vice president of worldwide marketing.

SIX MONTHS ENDED JUNE 30, 2002 COMPARED WITH THE SIX MONTHS ENDED JUNE 30, 2001

         REVENUES. Revenues for the first six months of 2002 decreased 7.9
percent to $31.8 million, from $34.5 million for the first six months of 2001.
The decline in revenues was primarily the result of a decrease in license
revenues of 14.4 percent to $17.2 million, from $20.0 million for the first six
months of 2001. The decline in license revenues reflected a lengthening of the
sales cycle for large enterprise transactions and lower than expected sales in
Europe due to the difficult economic environment. Service revenues increased
slightly to $14.6 million, from $14.5 million for the first six months of 2001.

         GROSS PROFIT. Gross profit for the first six months of 2002 totaled
$28.6 million, which was down from $30.5 million in the first six months of 2001
as a result of the decline in license revenues. Gross margin for the first six
months was 90.0 percent compared with 88.3 percent in the first six months of
2001. The expansion in gross margin reflected the improvement in operating
leverage in our technical support and professional services units as a result of
our restructuring initiatives.

         OPERATING COSTS AND EXPENSES. Operating costs and expenses for the six
months ended June 30, 2002 totaled $33.7 million, down from $48.8 million for
the six months ended June 30, 2001. The improvement was primarily the result of
the Company's 2001 corporate reorganization and restructuring initiated to
improve operating efficiency and leverage.

         Sales and marketing expenses for the six months ended June 30, 2002
decreased 28.5 percent to $19.9 million, from $27.8 million for the six months
ended June 30, 2001. The significant level of spending in the first half of 2001
primarily related to: (i) building and maintaining an enterprise sales force
focused exclusively on increasing sales to large enterprise customers and (ii)
expanding the Company's European sales offices. Because of the difficult
operating environment, these investments did not generate sufficient revenues to
justify their cost and were significantly reduced as part of our restructuring
that took place in mid-2001. As a result of this restructuring, we reduced the
Company's quarterly sales and marketing expenses to pre-build up levels.
Furthermore, we believe that the restructuring initiatives currently underway as
well as our anticipated growth in revenues will reduce sales and marketing
expenses as a percentage of revenues going forward.

         Research and development expenses for the six months ended June 30,
2002 decreased 16.3 percent to $10.0 million, from $11.9 million for the six
months ended June 30, 2001. This decrease primarily related to the closing or
downsizing of the Company's development offices in Boston, Massachusetts and
Arlington, Virginia and consolidating those development activities into existing
development centers in Houston, Texas and Pune, India. We expect future research
and development expenses to decrease as a percentage of revenues as a result of
these restructuring initiatives as well as our anticipated growth in future
revenues.



                                       12
<PAGE>

         General and administrative expenses for the six months ended June 30,
2002 decreased 55.2 percent to $3.8 million, from $8.5 million for the six
months ended June 30, 2001. This decrease primarily related to the reduction in
administrative expenses related to our restructuring initiatives and a $2.6
million provision for bad debts taken in the second quarter of 2001. We expect
future general and administrative expenses to decrease as a percentage of
revenues as a result of restructuring initiatives commenced in late 2001 to
improve operating efficiencies as well as our anticipated growth in future
revenues.

         In 2001, the Company completed a corporate reorganization and
implemented a number of cost-cutting measures to improve operating efficiency
and to accelerate the Company's return to profitability. The cost of this plan
totaled approximately $6.6 million, of which $0.6 million was incurred in the
first quarter of 2001 and $6.0 million was incurred in the third quarter of
2001, and consisted primarily of (i) involuntary employee separation for
approximately 160 employees (a reduction in workforce of approximately 21
percent), (ii) closing or downsizing of the Company's Boston and Arlington
development centers and certain European sales offices, (iii) reserves for
leasehold abandonment (net of expected sublease rentals of approximately $3.0
million), and (iv) various non-personnel related cuts. The restructuring costs
included a $1.2 million charge related to asset impairments of leasehold
improvements, equipment and other assets of the closed or downsized offices. The
costs of the plan were based on management's best estimate based on information
available at the time. Subsequent to recording the charge, the cost of employee
severances increased for certain foreign employees and the Company's estimate of
sublease rentals for certain leased property increased resulting in a reduction
in the Company's lease commitment obligation, which is reflected below in the
Adjustments column.

         The accrued restructuring expenses and amounts charged against the
provision as of June 30, 2002 were as follows (in thousands):


<Table>
<Caption>
                                                                                                                REMAINING
                                   RESTRUCTURING                            CASH                                 ACCRUAL
                                      CHARGES         ADJUSTMENTS       EXPENDITURES        WRITE-OFFS        JUNE 30, 2002
                                   -------------     -------------      -------------      -------------      -------------
<S>                                <C>               <C>                <C>                <C>                <C>
Employee severance ...........     $       2,791     $         809      $      (3,562)     $          --      $          38
Lease commitments ............             2,182              (987)              (894)                --                301
Office closure costs .........               111               (22)               (89)                --                 --
Asset impairments ............             1,169                --                 --             (1,169)                --
Other restructuring costs ....               341               200               (507)                --                 34
                                   -------------     -------------      -------------      -------------      -------------
                                   $       6,594     $          --      $      (5,052)     $      (1,169)     $         373
                                   =============     =============      =============      =============      =============
</Table>

         OTHER INCOME. Other income totaled $1.7 million and $1.3 million for
the six months ended June 30, 2002 and 2001, respectively. The increase in other
income in 2002 was due to the receipt of a $1.3 million settlement in the first
quarter of 2002 of a business interruption claim related to flooding that
occurred in June 2001. This increase was offset by lower interest rates as well
as lower investment balances during the period.

         PROVISION (BENEFIT) FOR INCOME TAXES. The Company provided a full
valuation allowance against the deferred tax assets of $19.6 million in the six
months ended June 30, 2002, compared with a tax benefit of $5.0 million (an
effective tax rate of 29.4 percent) for the first six months of 2001. As
required by Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes", the Company continued its assessments of the realization of its
deferred tax assets and as a result, concluded that a full valuation allowance
was appropriate at June 30, 2002.

         As in its prior assessments, the Company considered its current and
previous performance and other relevant factors in determining the sufficiency
of its valuation allowance. Objective factors, such as current and previous
operating losses, were given substantially more weight than management's outlook
for future profitability. Management remains optimistic about the future
prospects of the Company's business and the industry and continues to believe
that over time, as the market improves, the Company should generate sufficient
taxable income to utilize a substantial portion of its net operating loss
carryforwards. Until such time as a consistent pattern of sufficient
profitability is established, no tax benefit will be recognized associated with
the Company's pre-tax accounting losses and a full income tax provision will not
be provided on any future pre-tax accounting income.



                                       13
<PAGE>

         NET LOSS. Due to the factors described above, net loss for the first
six months ended June 30, 2002 was $22.9 million compared with $12.0 million for
the first six months ended June 30, 2001.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's capital requirements have principally related to working
capital needs and capital expenditures. These requirements have been met through
a combination of issuances of securities and internally generated funds.

         The Company had cash, cash equivalents and short-term investments of
$43.7 million at June 30, 2002 compared with $43.0 million at December 31, 2001.
The major reason for the increase related to improvements in working capital
management and receipt of a $1.3 million settlement in the first quarter of 2002
of a business interruption claim related to flooding that occurred in June 2001.

         Cash flows provided by (used in) operating activities were $1.9 million
in the first six months of 2002 compared with $(3.6) million in the first six
months of 2001. The increase in cash provided by operating activities in 2002
was due to: (i) the significant reduction in its loss before income taxes for
the first half of 2002 compared with the first half of 2001 and (ii) the
increase in cash generated from changes in net operating assets and liabilities
resulting from improvements in working capital management.

         Cash flows provided by investing activities were $1.2 million in the
first six months of 2002 compared with $4.8 million in the first six months of
2001. The decrease in cash generated from investing activities related to a
reduction in proceeds generated from the maturity of investments. Capital
expenditures for the first six months of 2002 were $2.1 million compared with
$2.0 million for the first six months of 2001. Capital expenditures for the
first six months of 2002 reflected investments in excess of $1.0 million in the
Company's customer relationship management systems made in order to enhance
sales force efficiency.

         Cash flows provided by (used in) financing activities were $0.3 million
in the first six months of 2002 compared with $(5.3) million in the first six
months of 2001. Cash provided by financing activities during the first six
months of 2002 was the result of $0.4 million in cash provided primarily by
employee purchases of common stock through the Company's Employee Stock Purchase
Plan. The use of cash in financing activities in the first six months of 2001
was primarily due to the repurchase of 2.0 million shares of the Company's
common stock for $7.1 million, partially offset by cash provided by the exercise
of employee stock options, which totaled $1.8 million. During the first half of
2002, the Company repurchased 28,500 shares of its common stock at an average
price of $1.41 per share. In July 2002, the Company's Board of Directors
approved $4.0 million for stock repurchases in the third quarter of 2002.
Thereafter, the Board will each quarter evaluate the buyback program and
determine the parameters for future stock repurchases.

         We conduct operations in leased facilities under operating leases
expiring at various dates through 2011. The contractual obligations under these
lease commitments were comprised of the following as of June 30, 2002:

<Table>
<Caption>
          CONTRACTUAL                                                                              2008 AND
          OBLIGATION                 TOTAL          2002        2003 -- 2005      2006 -- 2007      BEYOND
          -----------              ---------      --------      ------------      ------------     --------
<S>                                <C>            <C>           <C>               <C>              <C>
Operating leases .............     $  37,844      $  2,021      $     10,642      $      9,047     $ 16,134
Sub-leasing arrangements* ....        (2,261)         (575)           (1,686)               --           --
                                   ---------      --------      ------------      ------------     --------
                                   $  35,583      $  1,446      $      8,956      $      9,047     $ 16,134
                                   =========      ========      ============      ============     ========
</Table>

         * The Company has sub-leased portions of these facilities under
operating leases. Anticipated cash receipts from these sub-lease arrangements
have been taken into account when deriving expected cash outflow on operating
lease commitments.

         The Company's expected principal cash requirements for the remainder of
2002 are: (i) capital expenditures between $1.0 million and $1.5 million,
primarily for computer hardware and software, including enhancement to its
customer relationship management and revenue knowledge management systems (ii)
to fund working capital requirements, (iii) payment of restructuring expenses of
approximately $1.5 to $2.0 million and



                                       14
<PAGE>

(iv) stock repurchases (up to $4.0 million) under its buyback program. The
Company believes that it has sufficient cash on hand to meet these cash
requirements, as well as its cash requirements for the foreseeable future.

                           PART II. OTHER INFORMATION

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS


At the annual meeting of shareholders of the Company on May 23, 2002, Richard A
Hosley II was re-elected to a three-year term as a director of the Company. The
voting on Mr. Hosley's re-election was as follows:

         RE-ELECTION OF RICHARD A. HOSLEY II AS DIRECTOR

<Table>
<S>                                                                   <C>
     Total shares issued and outstanding at the record date           51,718,013
     of April 4, 2002:

     Shares voted in favor:                                           48,857,949

     Shares abstaining:                                                   78,663

     Total shares voted:                                              48,936,612
</Table>

The names of each other director whose term of office as a director continued
after the meeting are: Peter L. Bloom; Edward L. Pierce; Eric J. Pulaski; and
Armand S. Shapiro.


ITEM 5. OTHER INFORMATION

BY-LAW AMENDMENT

On May 23, 2002, the Board of Directors of the Company amended the first
sentence of Section 2.03 of the Company's by-laws to read as follows: "Special
meetings of the shareholders for any purpose or purposes may be called by the
board of directors."

SUBSEQUENT EVENTS

On July 15, 2002, William D. Miller, senior vice president and chief operating
officer of the Company, resigned to accept an executive position at another
company.

Peter L. Bloom, a director of the Company, resigned from the Board of Directors
effective August 1, 2002.


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

     This Quarterly Report on Form 10-Q includes "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All statements
other than statements of historical facts included in this Report, including
without limitation, statements regarding the Company's future financial
position, business strategy, planned products, products under development,
markets, budgets and plans and objectives of management for future operations,
are forward-looking statements. Although we believe that the expectations
reflected in these forward-looking statements are reasonable, we cannot assure
you that those expectations will prove to have been correct. Important factors
that could cause actual results to differ materially from the Company's
expectations are disclosed in statements set forth under "Cautionary



                                       15
<PAGE>

Statements" in our Annual Report on Form 10-K, as well as other factors such as,
for example: the risks associated with lower customer demand in a weak economy;
increased competition within the network management software industry; the
effects of recently-implemented cost reductions on the Company's business;
transitional inefficiencies that may arise during the Company's implementation
of recently-announced reorganization plans; and the management challenges of
implementing those plans while attempting to maintain employee motivation and
effectiveness. All subsequent written and oral forward-looking statements
attributable to us, or persons acting on our behalf, are expressly qualified in
their entirety by these Cautionary Statements, the other example factors listed
in the previous sentence, and such other statements.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

     Exhibit 3.3   Bylaws of BindView Development Corporation, as amended May
                   23, 2002

     Exhibit 99.1  Certification of Chief Executive Officer of BindView
                   Development Corporation

     Exhibit 99.2  Certification of Chief Financial Officer of BindView
                   Development Corporation

(b)  Reports on Form 8-K.

     None



                                       16
<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.

                                       BINDVIEW DEVELOPMENT CORPORATION


August 14, 2002                        By: /s/ Kevin P. Cohn
                                          --------------------------------------
                                                      Kevin P. Cohn
                                       Vice President, Controller and Chief
                                       Accounting Officer (Principal Accounting
                                       Officer)



                                       17
<PAGE>

                                  EXHIBIT INDEX

<Table>
<Caption>
         EXHIBIT
         NUMBER            DESCRIPTION
         -------           -----------
<S>                        <C>
         3.3               Bylaws of BindView Development Corporation, as
                           amended May 23, 2002

         99.1              Certification of Chief Executive Officer of BindView
                           Development Corporation

         99.2              Certification of Chief Financial Officer of BindView
                           Development Corporation
</Table>