<PAGE>

                                 UNITED STATES
                       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, 1999

                                       OR

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

                         Commission file number 0-19872


                        WALKER INTERACTIVE SYSTEMS, INC.
                        --------------------------------
             (Exact name of registrant as specified in its charter)


          Delaware                                  95-2862954
          --------                                  ----------
   State or other jurisdiction                   (I.R.S. Employer
of incorporation or organization)              Identification Number)



                  303 Second Street, San Francisco, CA  94107
                  -------------------------------------------
          (Address of principal executive offices including zip code)



                                 (415) 495-8811
                                 --------------
              (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 report) and (2) has been subject to such filing
requirements for the past 90 days.

                           Yes    X    No
                                -----     ------


 There were 14,013,999 Shares of $.001 Par Value Common Stock outstanding as of
                                August 10, 1999.
<PAGE>

                        WALKER INTERACTIVE SYSTEMS, INC.
                                   FORM 10-Q
                                     INDEX

<TABLE>
                                 PART I.  FINANCIAL INFORMATION                                                       Page
                                                                                                                      ----
<S>         <C>                                                                                                       <C>
Item 1.     Consolidated Financial Statements

            Consolidated Balance Sheets as of June 30, 1999 and December 31, 1998....................................    3

            Consolidated Statements of Operations for the three and six months ended June 30, 1999 and 1998..........    4

            Consolidated Statements of Cash Flows for the three and six months ended June 30, 1999 and 1998..........    5

            Notes to Consolidated Financial Statements...............................................................    6

Item 2.     Management's Discussion and Analysis of Financial Condition and Results of Operations....................    9

Item 3.     Quantitative and Qualitative Disclosures About Market Risk...............................................   18

Item 4.     Submission of Matters to a Vote of Security Holders......................................................   19

                                 PART II.  OTHER INFORMATION

Item 6.     Exhibits and Reports on Form 8-K.........................................................................   20

Signatures  .........................................................................................................   21
</TABLE>

                                       2
<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                       WALKER INTERACTIVE SYSTEMS, INC.
                          CONSOLIDATED BALANCE SHEETS
                     (in thousands, except share amounts)

<TABLE>
<CAPTION>
                                                                        JUNE                 DECEMBER
                                   ASSETS                             30, 1999               31, 1998
                                                                   -----------             ------------
                                                                    (unaudited)
<S>                                                                <C>                     <C>
Current assets:
      Cash and cash equivalents                                      $  12,000                $  15,556
      Short-term investments                                             5,956                    5,135
      Accounts receivable, net                                          28,870                   30,457
      Prepaid expenses                                                   3,469                    2,347
                                                                   -----------             ------------
                     Total current assets                               50,295                   53,495

Long-term investments                                                    5,432                    1,906
Property and equipment, net                                              4,765                    4,962
Capitalized software, net                                               13,154                   18,186
Deferred tax assets, net                                                     -                   12,501
Other assets                                                               549                    4,047
                                                                   -----------             ------------
TOTAL ASSETS                                                         $  74,195                $  95,097
                                                                   ===========             ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
      Accounts payable and accrued liabilities                       $  19,868                $  18,496

      Deferred revenue                                                  18,094                   14,819
                                                                   -----------             ------------

                     Total current liabilities                          37,962                   33,315


Deferred revenue                                                         3,280                    1,600
Accrued rent                                                             1,004                      954
Other long-term obligations                                              2,562                    2,177
                                                                   -----------             ------------
                     Total liabilities                                  44,808                   38,046
                                                                   -----------             ------------

Commitments and Contingencies                                                -                        -

Stockholders' equity:
      Common stock, $.001 par value: 50,000,000 shares
         authorized; issued 14,013,999 shares - June 30, 1999;
         14,184,685 shares - December 31, 1998                              14                       14
      Additional paid-in capital                                        74,116                   74,719
      Accumulated other comprehensive income                                 2                      232
      Accumulated deficit                                              (44,571)                 (17,662)
      Treasury stock at cost (64,166 shares - June 30, 1999;
         49,207 shares - December 31, 1998)                               (174)                    (252)
                                                                   -----------             ------------
                     Total stockholders' equity                         29,387                   57,051
                                                                   -----------             ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                           $  74,195                $  95,097
                                                                   ===========             ============
</TABLE>

See notes to consolidated financial statements

                                       3
<PAGE>


                       WALKER INTERACTIVE SYSTEMS, INC.
               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                   (in thousands, except per share amounts)
<TABLE>
<CAPTION>
                                                                            THREE MONTHS                      SIX MONTHS
                                                                           ENDED JUNE 30,                   ENDED JUNE 30,
                                                                       1999             1998            1999             1998
REVENUES:                                                            ---------       -----------     ----------       ----------
<S>                                                                  <C>             <C>             <C>              <C>
    License                                                           $  4,778           $ 5,560       $  8,168          $11,967
    Maintenance                                                          8,038             7,602         15,947           15,327
    Consulting                                                          12,528            12,278         25,136           21,808
                                                                     ---------       -----------     ----------       ----------
                    Total revenues                                      25,344            25,440         49,251           49,102

OPERATING EXPENSES:
    Costs of revenues:
                    Costs of licenses, maintenance and consulting       11,520            10,522         22,964           20,258
                    Amortization of capitalized software                 1,140             1,037          2,629            2,070
    Sales and marketing                                                  5,707             5,698         11,643           11,337
    Product development                                                  4,112             3,191          7,462            6,392
    General and administrative                                           3,696             3,173          7,297            5,896
    Write-down of capitalized research and
                    development and associated goodwill                  9,003                 -          9,003                -
    Restructuring charges                                                3,134                 -          3,134                -
                                                                     ---------       -----------     ----------       ----------
                    Total operating expenses                            38,312            23,621         64,132           45,953

Operating income (loss)                                                (12,968)            1,819        (14,881)           3,149
                    Interest income, net                                   234               276            473              584
                                                                     ---------       -----------     ----------       ----------
Income (loss) before income taxes                                      (12,734)            2,095        (14,408)           3,733
                    Income tax expense                                  13,137               755         12,501            1,344
                                                                     ---------       -----------     ----------       ----------
NET INCOME (LOSS)                                                     $(25,871)          $ 1,340       $(26,909)         $ 2,389
                                                                     =========       ===========     ==========       ==========

BASIC NET INCOME (LOSS) PER SHARE                                       $(1.85)            $0.10         $(1.92)           $0.17
                                                                     =========       ===========     ==========       ==========

Shares used in computing
    basic net income (loss) per share                                   13,965            13,978         14,022           13,976
                                                                     =========       ===========     ==========       ==========

DILUTED NET INCOME (LOSS)  PER SHARE                                    $(1.85)            $0.09         $(1.92)           $0.16
                                                                     =========       ===========     ==========       ==========
Shares used in computing
    diluted net income (loss) per share                                 13,965            15,196         14,022           15,140
                                                                     =========       ===========     ==========       ==========
</TABLE>

See notes to consolidated financial statements

                                       4
<PAGE>

                        WALKER INTERACTIVE SYSTEMS, INC
               CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                (in thousands)

<TABLE>
<CAPTION>
                                                                                              SIX MONTHS
                                                                                            ENDED JUNE 30,
                                                                                      1999                  1998
                                                                                    --------               -------
<S>                                                                                 <C>                    <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

     Net Income (loss)                                                              $(26,909)              $ 2,389
     Adjustments to reconcile net income (loss) to net cash
          provided by operating activities:
          Depreciation and amortization                                                4,325                 3,267
          Tax benefit of nonqualified stock options                                        -                   203
          Write-down of capitalized research and
                development and associated goodwill                                    9,003                     -
     Changes in operating assets and liabilities:
          Accounts receivable, net                                                     1,587                (3,690)
          Prepaids & other assets                                                     (1,122)                 (363)
          Accounts payable & accrued liabilities                                       1,589                (2,376)
          Deferred tax asset                                                          12,501                 1,344
          Deferred revenue                                                             4,955                (1,178)
          Other                                                                           77                   486
                                                                                    --------               -------
                Net cash provided by operations                                        6,006                    82
                                                                                    --------               -------

CASH FLOWS FROM FINANCING ACTIVITIES:
     Proceeds from employee stock purchase plan
          issuances and stock options exercised                                          381                 1,201
     Treasury stock acquired                                                            (906)               (1,578)
     Capital lease and loan payments                                                     (71)                  (43)
     Repayment of borrowings                                                               -                (1,422)
                                                                                    --------               -------
                Net cash used by financing activities                                   (596)               (1,842)
                                                                                    --------               -------

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchases of short- and long-term investments                                    (8,540)               (3,256)
     Maturities of short-term investments                                              2,625                 8,150
     Sales of short-term investments                                                   1,508                 5,221
     Purchases of property                                                            (1,192)                 (966)
     Additions to capitalized software                                                (3,184)               (3,719)
     Effective exchange rate changes on cash                                            (169)                  (19)
     Other                                                                               (14)                    7
                                                                                    --------               -------
                Net cash provided (used) by investing activities                      (8,966)                5,418
                                                                                    --------               -------

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                  (3,556)                3,658

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                                       15,556                 7,646
                                                                                    --------               -------

CASH AND CASH EQUIVALENTS - END OF PERIOD                                           $ 12,000               $11,304
                                                                                    ========               =======
</TABLE>

See notes to consolidated financial statements

                                       5
<PAGE>

                        WALKER INTERACTIVE SYSTEMS, INC.
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.   SIGNIFICANT ACCOUNTING POLICIES
--   -------------------------------

     BASIS OF PRESENTATION

     The accompanying unaudited consolidated financial statements have been
     prepared in accordance with generally accepted accounting principles for
     interim financial statements and include all adjustments (consisting only
     of normal recurring adjustments) which the Company considers necessary for
     a fair presentation of the financial position, operating results and cash
     flows for those periods.  Results for the interim periods are not
     necessarily indicative of the results for the entire year.  These
     consolidated financial statements and any notes thereto, should be read in
     conjunction with the audited consolidated financial statements included in
     the Walker Interactive Systems, Inc. Annual Report on Form 10-K for the
     year ended December 31, 1998.

2.   EARNINGS PER SHARE
--   ------------------

     The Company calculates basic earnings per share ("EPS") and diluted EPS in
     accordance with Statement of Financial Accounting Standards ("SFAS") No.
     128, "Earnings per Share".  Basic EPS is computed by dividing net income
     (loss) by the weighted average number of common shares outstanding for that
     period.  Diluted EPS takes into account the effect of dilutive instruments,
     such as stock options, and uses the average share price for the period in
     determining the number of incremental shares that are to be added to the
     weighted average number of shares outstanding.

     The following is a summary of the calculation of the number of shares used
     in calculating basic and diluted EPS (in thousands):


<TABLE>
<CAPTION>
                                                        THREE MONTHS                 SIX MONTHS
                                                       ENDED JUNE 30,              ENDED JUNE 30,
                                                     1999          1998          1999          1998
                                                 ------------  ------------  ------------  ------------
<S>                                              <C>           <C>           <C>           <C>
Shares used to compute basic EPS                       13,965        13,978        14,022        13,976
Add: effect of dilutive securities                          -         1,218             -         1,164
                                                 ------------  ------------  ------------  ------------
Shares used to compute diluted EPS                     13,965        15,196        14,022        15,140
                                                 ============  ============  ============  ============
</TABLE>

                                       6
<PAGE>

3.   COMPREHENSIVE INCOME
--   --------------------

     SFAS No. 130 requires disclosure of total non-stockholder changes in
     equity, which include unrealized gains and losses on securities classified
     as available-for-sale under SFAS No. 115, foreign currency translation
     adjustments accounted for under SFAS No. 52, and minimum pension liability
     adjustments made pursuant to SFAS No. 87.

     The reconciliation of net income (loss) to comprehensive income (loss) for
     the three and six months ended June 30, 1999 and 1998 is as follows (in
     thousands):

<TABLE>
<CAPTION>
                                                         THREE MONTHS                   SIX MONTHS
                                                        ENDED JUNE 30,                ENDED JUNE 30,
                                                     1999           1998           1999           1998
                                                 ------------   ------------   ------------   ------------
<S>                                              <C>            <C>            <C>            <C>
Net income (loss)                                    $(25,871)        $1,340       $(26,909)        $2,389
Other comprehensive loss                                 (119)           (13)          (230)           (10)
                                                 ------------   ------------   ------------   ------------
Total comprehensive income (loss)                    $(25,990)        $1,327       $(27,139)        $2,379
                                                 ============   ============   ============   ============
</TABLE>


4.  RESTRUCTURING CHARGES
--  ---------------------

     During the quarter ended June 30, 1999, the Board of Directors approved a
     plan to realign Walker's focus on its core financial and analytic
     applications.  Associated with this change in strategy, the Board of
     Directors approved steps to restructure its operations to increase
     operating efficiencies.  The Company will focus on the Tamaris and Horizon
     product lines, specifically investing in Web-enabled functionality.  The
     Company will continue to support its Aptos and IMMPOWER customers, focusing
     sales and marketing on certain geographic regions, but will limit its
     investment in these applications.  During the quarter ended June 30, 1999,
     the Company recorded a pretax charge of $12.1 million in connection with
     the change in strategic direction and the related cost restructuring.

     The Company re-evaluated capitalized research and development carrying
     amounts, and associated goodwill, against related estimated undiscounted
     cashflows.  The evaluation indicated that the future undiscounted cashflows
     were not sufficient to recover the carrying values of some assets.  These
     assets were adjusted to net realizable value resulting in a charge of $5.3
     million associated with IMMPOWER and Aptos capitalized research and
     development costs and $3.2 million related to goodwill.  The Company
     additionally wrote-off $0.5 million in capitalized research and development
     costs which had no future value.

     Costs associated with office consolidations in Europe and North America
     resulted in a pretax charge of $3.1 million which was required to cover
     costs of reducing certain areas of the workforce and facilities to levels
     more appropriate to current and expected business requirements. A charge of
     $2.0 million was recognized to cover costs associated with excess
     facilities.  The Company intends to continue to search for tenants to
     sublet any vacant excess facilities. The Company also recognized a charge
     of $1.1 million due to the reduction in workforce; 40 employees were
     terminated in the quarter ended June 30, 1999 or will be terminated as a
     result of the Company's realignment strategy.  Of the total, 14 were in
     product development, 13 were in administrative and finance positions, nine
     were engaged in sales and marketing, and four were in customer support.
     All terminated employees were informed of their terminations by June 30,
     1999.

                                       7
<PAGE>

     Restructuring charges taken during the second quarter of 1999 and related
     charges against respective liabilities are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                           Expected           Expected
                                        Restructuring    Charges to    Balance at    charges to liability    balance at
                                           charges        liability   June 30, 1999         in 1999         Dec 31, 1999
                                        --------------------------------------------------------------------------------
<S>                                     <C>            <C>            <C>            <C>                    <C>
Termination payments
  to employees                                $ 1,145       $  (280)         $  865               $  (473)        $  392
Facility Closures:                              1,989             -           1,989                  (530)         1,459
Write-down of capitalized
  research and development                      5,788        (5,788)              -                                    -
Goodwill impairment                             3,215        (3,215)              -                                    -
                                        --------------------------------------------------------------------------------
                                              $12,137       $(9,283)         $2,854               $(1,003)        $1,851
                                        ================================================================================
</TABLE>

     Subsequent to December 31, 1999, the remaining expected charges against
     liabilities will be attributable to termination payments to employees and
     future lease payments on excess facilities.

                                       8
<PAGE>

                        WALKER INTERACTIVE SYSTEMS, INC.

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

The report on this Form 10-Q contains forward-looking statements, including
statements related to prospects associated with certain product lines, working
capital requirements and Year 2000 related issues.  Discussions containing such
forward-looking statements may be found in the material set forth in this
section, generally and specifically herein under the captions "Restructuring
Charges", "Liquidity and Capital Resources", "Year 2000 Readiness" and
"Additional Risk Factors."  Actual events or results may differ materially from
those discussed herein.  The Company disclaims any obligation to update these
forward-looking statements as a result of subsequent events.  The risk factors
on pages 14 through 18, among others, should be considered in evaluating the
Company's prospects and future financial performance.

Walker Interactive Systems, Inc.(TM) (hereinafter "Walker" or the "Company") was
incorporated in California in 1973 and reincorporated in Delaware in March 1992.
Walker designs, develops, markets and supports, on an international basis, a
family of network computing and client server based enterprise wide financial,
operational and analytic application software products and related services.
These products and services enable organizations to improve profitability
through the availability of timely and accurate information, reflect new
business processes as a result of organizational change and exploit the latest
technological advances in order to reduce costs.

Walker designs its software products specifically for the network computing and
client/server models and believes that its architecture is among the most
scalable and adaptable available for enterprise-level financial and analytical
applications software.  The Company's strategy is to offer enterprise wide
financial, operational and analytical application software solutions, and
related services, to a variety of industries with best-of-breed software
products utilized in a wide variety of cross-industry solutions.  The Walker
applications support and enhance enterprise-wide financial, operational and
analytic processes, including planning, budgeting, forecasting, consolidation,
financial management, performance measurement,  revenue and procurement
management.  The Company's software products utilize the Microsoft Windows
operating systems on the desktop, NT, UNIX and OS/390 operating systems on the
server and industry-leading On Line Analytical Processing ("OLAP"), Relational
Database Management Systems ("RDBMS") including Hyperion Solutions Essbase,
IBM's DB2, Oracle Express and Microsoft SQL/Server.

The Tamaris product line represents the Company's core suite of business and
financial solutions utilizing the power of the enterprise server, while the
Aptos suite of financial applications runs on UNIX and Windows NT servers.  The
Company also develops and markets Horizon(TM) best-of-breed analytic
applications which provide financial reporting, budgeting and financial
consolidation solutions. The Horizon analytic applications products integrate
with Tamaris and also work standalone with leading Enterprise Resource Planning
("ERP") applications.

The Company's software products include productivity tools that allow the
Company's applications to be customized to fit the customer's particular
requirements.  The Company complements its software products by providing
specialized professional consulting services to assist customers with
customization and implementation of financial, analytical and operational
solutions to fuel business advantage.

The Company derives its revenues primarily from software licenses, software
maintenance and professional consulting services.

RESTRUCTURING CHARGES
---------------------

During the quarter ended June 30, 1999, the Board of Directors approved a plan
to realign Walker's focus on its core financial and analytic applications.
Associated with this change in strategy, the Board of Directors approved steps
to restructure its operations to increase operating efficiencies.  The Company
will focus on the Tamaris and Horizon product lines, specifically investing in
Web-enabled functionality.  The Company will continue to support its Aptos and
IMMPOWER customers, focusing sales and marketing on certain geographic regions,
but will limit its investment in these applications.  During the quarter ended
June 30, 1999, the Company recorded a pretax charge of $12.1 million in
connection with the change in strategic direction and the related cost
restructuring.

                                       9
<PAGE>

The Company re-evaluated capitalized research and development carrying amounts,
and associated goodwill, against related estimated undiscounted cashflows.  The
evaluation indicated that the future undiscounted cashflows were not sufficient
to recover the carrying values of some assets.  These assets were adjusted to
net realizable value resulting in a charge of $5.3 million associated with
IMMPOWER and Aptos capitalized research and development costs and $3.2 million
related to goodwill.  The Company additionally wrote-off $0.5 million in
capitalized research and development costs which had no future value.

Costs associated with office consolidations in Europe and North America resulted
in a pretax charge of $3.1 million which was required to cover costs of reducing
certain areas of the workforce and facilities to levels more appropriate to
current and expected business requirements. A charge of $2.0 million was
recognized to cover costs associated with excess facilities.  The Company
intends to continue to search for tenants to sublet any vacant excess
facilities. The Company also recognized a charge of $1.1 million due to the
reduction in workforce; 40 employees were terminated in the quarter ended June
30, 1999 or will be terminated as a result of the Company's realignment
strategy.  Of the total, 14 were in product development, 13 were in
administrative and finance positions, nine were engaged in sales and marketing,
and four were in customer support.  All terminated employees were informed of
their terminations by June 30, 1999.

Restructuring charges taken during the second quarter of 1999 and related
charges against respective liabilities are as follows (in thousands):

<TABLE>
<CAPTION>
                                                                                           Expected           Expected
                                        Restructuring    Charges to    Balance at    charges to liability    balance at
                                           charges        liability   June 30, 1999         in 1999         Dec 31, 1999
                                        --------------------------------------------------------------------------------
<S>                                     <C>            <C>            <C>            <C>                    <C>
Termination payments
  to employees                                $ 1,145       $  (280)         $  865               $  (473)        $  392
Facility Closures:                              1,989             -           1,989                  (530)         1,459
Write-down of capitalized
  research and development                      5,788        (5,788)              -                                    -
Goodwill impairment                             3,215        (3,215)              -                                    -
                                        --------------------------------------------------------------------------------
                                              $12,137       $(9,283)         $2,854               $(1,003)        $1,851
                                        ================================================================================
</TABLE>

Subsequent to December 31, 1999, the remaining expected charges against
liabilities will be attributable to termination payments to employees and future
lease payments for excess facilities.

The following paragraph contains forward-looking statements.  Walker will
continue to evaluate its reserves in the future which may result in additional
charges associated with the Company's change in strategy or ongoing cost
reduction program.  There can be no assurance that Walker will or will not
dispose or sell assets, liabilities and/or intellectual property associated with
the IMMPOWER or Aptos product lines.

RESULTS OF OPERATIONS
---------------------

REVENUES.   The Company recorded total revenues of $25.3 million and $25.4
million for the three months ended June 30, 1999 and 1998, respectively.  For
the first half of 1999, total revenues for the Company were $49.3 million
compared to $49.1 million for the same period last year.  Although total
revenues for the first half of 1999 were relatively unchanged from 1998 to 1999,
the Company's revenue mix had increases in consulting revenues offset by a
decrease in license revenues.  Maintenance revenues have remained relatively
flat for the first half of 1999 from 1998.

License revenues for the current quarter decreased $0.8 million or 14 percent
from the second quarter of 1998 to $4.8 million in the comparable 1999 period.
Second quarter 1999 license revenues increased in North America and in the Asia
Pacific region, offset by a decrease in license revenue in Europe.  For the
first half of 1999, license revenues decreased $3.8 million or 32 percent from
$12.0 million in 1998 to $8.2 million in 1999. For the first half of 1999,
license revenues decreased in all regions except for Asia Pacific, where license
revenues were relatively unchanged. During the second quarter of 1998, license
revenues recognized in Europe reached record levels, which were not attained in
1999. The Company believes the decrease in license revenues in 1999 is primarily
attributable to a general softness in the enterprise financial application
software industry as a whole.  The Company believes that potential customers are
utilizing resources to ensure that current software applications are Year 2000
compatible instead of immediately purchasing and implementing new software
applications.  The ongoing downturn in the Asia Pacific economy continues to
restrict license revenue growth in that region.

                                       10
<PAGE>

Consulting revenues were relatively flat at $12.5 million and $12.3 million for
the three months ended June 30, 1999 and 1998, respectively.  For the first half
of 1999, consulting revenues increased 15 percent to $25.1 million compared to
$21.8 million for the comparable prior year period.  Consulting revenues are
generated from new and existing customers for services related to training,
implementation, customization, migration, enhancement, Year 2000 readiness
engagements, best practice consulting engagements and other special projects.
The Company generates a majority of its consulting revenues from implementation-
related projects.  The increase in consulting revenues during the first half of
1999 is attributable to revenues generated from Year 2000 readiness engagements,
best practice consulting engagements, and migration-related projects associated
with the Company's Tamaris, Aptos and Horizon product lines.

COSTS OF LICENSES, MAINTENANCE AND CONSULTING.  Costs of licenses, maintenance
and consulting represented 45 percent and 41 percent of total revenues for the
three months ended June 30, 1999 and 1998, respectively.  For the six months
ended June 30, 1999, costs of licenses, maintenance and consulting represented
47 percent compared to 41 percent in 1998.  Contributing to the increase in the
ratio of costs of licenses, maintenance and consulting over total revenues for
1999 were lower profit margins in Europe associated with fixed-fee consulting
engagements, partially offset by relatively higher profit margins recognized on
Year 2000 readiness and best practice consulting engagements. A decrease in
total license revenues, which generally have a higher profit margin compared to
consulting revenue, has negatively impacted cost of licenses, maintenance and
consulting as a percent of total revenues.  Further contributing to the increase
in the percent of cost of licenses, maintenance and consulting of total revenues
was an increase in the proportion of license sales which incorporate third party
technology.

AMORTIZATION OF CAPITALIZED SOFTWARE. Amortization of capitalized software
increased $0.1 million or 10 percent in the second quarter of 1999 compared to
the same period in 1998.  For the six months ended June 30, 1999, amortization
of capitalized software increased 27 percent to $2.6 million compared to $2.1
million for the same period in 1998.  The increase is due to additional
amortization associated with the Company's ongoing practice of evaluating the
lives of capitalized software products and additional amortization resulting
from recent product releases.  Offsetting the increase in amortization is the
decrease in amortization associated with products which have been written off as
part of the restructuring in the second quarter of 1999.

SALES AND MARKETING.  In absolute dollars, sales and marketing expenses were
flat at $5.7 million for the three months ended June 30, 1999 and 1998.  Sales
and marketing expenses increased $0.3 million or three percent to $11.6 million
for the first half of 1999 compared to $11.3 million for the same prior year
period.  Due to newly opened sales offices during the first quarter of 1999,
sales expenses in Europe for the first half of 1999 and in the Asia Pacific
region for the first quarter of 1999 increased over the prior year.  Offsetting
the increase was a reduction in marketing expenses in North America as the
Company reduced headcount and marketing promotions in 1999 compared to 1998.

PRODUCT DEVELOPMENT.  Product development-related expenses, excluding
amortization of capitalized software, are detailed as follows (in thousands):

<TABLE>
<CAPTION>
                                                          THREE MONTHS                    SIX MONTHS
                                                         ENDED JUNE 30,                 ENDED JUNE 30,
                                                      1999            1998           1999           1998
                                                 -------------   -------------   ------------   ------------
<S>                                              <C>             <C>             <C>            <C>
Product development costs, including additions
 to capitalized software  (gross)                      $ 5,386         $ 4,975        $10,596        $10,111
Less: additions to capitalized software                 (1,274)         (1,784)        (3,134)        (3,719)
                                                 -------------   -------------   ------------   ------------
Product development expenses                           $ 4,112         $ 3,191        $ 7,462        $ 6,392
                                                 =============   =============   ============   ============
</TABLE>

During the first quarter of 1999, the Company acquired $0.2 million in software
technology which complemented internally developed products and related
technology.  Excluding the acquired software, gross product development expenses
increased slightly due to increased costs associated with the Horizon and
Tamaris product lines.  The decrease in additions to capitalized software in
absolute dollars and as a percentage of gross product development costs is
attributable to product development resources which were allocated to non-
capitalizable projects.  Historical additions to capitalized software, in
absolute dollars and as a percentage of gross product development costs, are not
a reliable indicator of additions to capitalized software that will be incurred
in the future.

                                       11
<PAGE>

GENERAL AND ADMINISTRATIVE.  General and administrative expenses were $3.7
million and $3.2 million for the three months ended June 30, 1999 and 1998,
respectively.   For the first half of the 1999, general and administrative
expenses were $7.3 million and $5.9 million for the same period in 1998.  The
increase of $1.4 million or 24 percent for the first half on 1999 is
attributable to increased usage of outside contractors and increased labor
expenses.

INCOME TAX EXPENSE.  Due to the change in strategic direction and the timing of
expiration of certain tax credits, the Company recorded a valuation allowance in
the second quarter of $13.1 million to fully reserve its deferred tax assets.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

The Company's operating activities provided cash of $5.8 million in the first
half of 1999 and $0.1 million during the comparable 1998 period.  The change in
deferred revenue was the primary factor contributing to cash provided from
operation.  Offsetting the cash proceeds was the Company's net loss of $26.9
million for the six months ended June 30, 1999.

Financing activities used $0.6 million in cash during the first half of 1999 and
$1.8 million during the same period in 1998.  There were proceeds of  $0.4
million from the employee stock purchase plan issuances during the first half of
1999 compared to $1.2 million from employee stock purchase plan issuances and
stock option exercises in the comparable 1998 period.    The Company used $0.9
million in cash in the first half of 1999 and $1.6 million in cash in the
comparable 1998 period for the acquisition of common stock from the open market.
All stock repurchases were made pursuant to resolutions of the Company's Board
of Directors authorizing the repurchase of the Company's outstanding shares of
common stock, which in aggregate is not to exceed a total cost of $17.5 million.
As of  June 30, 1999, the Company had acquired 1,007,000 shares of its common
stock at a cost of $10.9 million.  As of June  30, 1999, the Company had
reissued 974,000 of the repurchased shares in connection with the Company's
employee stock purchase plan, one of its employee stock option plans and the
December 1997 acquisition of Revere, Inc. ("Revere").

In connection with the acquisition of Revere, the Company assumed a line of
credit with an outstanding balance of $1.5 million.  The outstanding balance on
the assumed line of credit was subsequently paid in full in January 1998.

The Company has a line of credit in the amount of $6.0 million, secured by
marketable securities.  The line of credit expires on September 1, 1999.  The
Company has never borrowed against this line of credit.

Investing activities used cash of $8.8 million in the first half of 1999
compared to providing cash of $5.4 million for the same period in 1998.  The
increase in cash used is primarily attributable to an increase of investment
purchases in 1999.

As of June 30, 1999, the Company's principal sources of liquidity included cash,
cash equivalents and short- and long-term investments aggregating $23.4 million.
The following sentence is a forward looking statement.  The Company believes
that its principal sources of liquidity, together with funds expected to be
generated from operations, will satisfy the Company's currently anticipated
working capital and capital expenditure requirements for at least the next
twelve months.

YEAR 2000 READINESS
-------------------

The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year.  The Company's computer
equipment and software and devices with imbedded technology that are time-
sensitive may recognize a date using "00" as the year 1900 rather than the year
2000.  This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices or engage in normal business activities.

The Company has completed an assessment to determine the effect that the Year
2000 issue will have on it.  The Company believes that its current commercial
application software products generally offered for license by the Company to
end-user customers are Year 2000 ready.  However, certain versions of these
products currently installed

                                       12
<PAGE>

at customers' sites will require upgrading or other modifications to become Year
2000 ready. The Company has identified those affected customers who are on the
Company's warranty maintenance program, has contacted those customers and is
assisting those customers to assess their readiness. The Company is making
available to those customers a Year 2000 ready release of its software and will
assist such customers to become Year 2000 ready. The following sentence is a
forward-looking statement. The Company believes that the costs associated with
making certain versions of the Company's products Year 2000 ready will not be
material to the Company's business, results of operations or financial
condition.

The Company has completed an assessment of its computer equipment and software,
including information technology systems, such as accounting, data processing
and telephone/PBX systems, and non-information technology systems, such as fax
machines and alarm systems, to determine if they are Year 2000 ready.  The
following three sentences are forward-looking statements.  The Company believes
that certain of its non-critical computer equipment and software will require
replacement or modification, at a total cost which is not material to the
Company's results of operations or financial condition.  The Company believes
that even if such replacements or modifications were not completed, the Year
2000 issue would not have a material adverse effect on the Company's business,
results of operations or financial condition.  In addition, even if the
Company's vendors or suppliers fail to become Year 2000 ready in a timely
manner, the Company believes that such failure would not have a material adverse
effect on the Company's business, results of operations or financial condition.

The costs and impact of the Year 2000 issue are based upon management's best
estimates, which were derived using numerous assumptions regarding future
events, including the continued availability of certain resources, the
functioning of its products in accordance with specifications and other factors.
There can be no assurance that these estimates will prove to be accurate and
actual results could differ from those currently anticipated.  Specific factors
that could cause such material differences include, but are not limited to, the
availability and cost of personnel trained in Year 2000 issues and the
functioning of the Company's products in accordance with specifications.  In
addition, variability of definitions of "Year 2000 ready" and the number of
products that the Company has sold, may lead to claims for which the impact on
the Company is not currently estimable.  No assurance can be given that the
aggregate cost of defending and resolving such claims, if any, would not
materially adversely affect the Company's business, results of operations or
financial condition.

OTHER MATTERS
-------------

On July 14, 1999, the Company announced that they commenced a search for a new
Chief Executive Officer.

                                       13
<PAGE>

ADDITIONAL RISK FACTORS
-----------------------

The Company operates in a rapidly changing environment that involves numerous
risks and uncertainties which could have a material adverse effect on the
Company.  The following discussion details some, but not all, of these risks and
uncertainties.

LIQUIDITY AND CAPITAL RESOURCES.

There can be no assurance that the Company will not need to raise substantial
additional capital to fund its operations in the future. There can be no
assurance that additional financing will be available on acceptable terms or
will be available at all.

FLUCTUATION IN OPERATING RESULTS.

The Company's operating results fluctuate as a result of a variety of  factors
including:

    (i)     the execution of new license agreements;
    (ii)    the shipment of software products;
    (iii)   customer acceptance criteria for services performed;
    (iv)    completion of milestone or other significant development
            requirements pursuant to the Company's license agreements;
    (v)     the financial terms of consulting agreements and the inclusion of
            fixed as opposed to variable pricing;
    (vi)    third-party royalty payments for licensed software;
    (vii)   the demand for the Company's products and services;
    (viii)  changes in the Company's product mix;
    (ix)    the development and launch of new products, and the life cycles of
            the Company's existing products;
    (x)     research and development expenditures required to update and expand
            the Company's product portfolio and related third-party consulting
            costs;
    (xi)    sales and marketing expenses generally related to the entry into new
            markets with new or existing products and maintenance of market
            share in existing markets;
    (xii)   acquisitions and the integration and development of acquired
            entities or products;
    (xiii)  competitive conditions in the industry; and
    (xiv)   general economic conditions.

As a result, the Company believes that period-to-period comparisons of its
operating results are not necessarily meaningful and should not be relied upon
as indications of future performance.

The Company's quarterly operating results are particularly dependent on the
number of license agreement bookings executed in each quarter.  The amount of
quarterly bookings has varied substantially from quarter to quarter due to a
variety of reasons including:

    (i)     a high proportion of license agreements are negotiated during the
            latter part of each quarter and may not be completed before the
            quarter end;
    (ii)    the sales cycles for some of the Company's products are relatively
            long due to the Company's focus on "enterprise solutions" as opposed
            to individual products, which adds complexity to the customer's
            selection, negotiation and approval process;
    (iii)   the amount related to each booking may vary significantly due to the
            need for different solutions for different customers;
    (iv)    procurement procedures may vary from customer to customer, which may
            affect the timing of the bookings;
    (v)     customers may continue to forego or delay software purchases due to
            increased attention and spending on Year 2000 related projects;
    (vi)    the period for a customer to complete product evaluations and to
            complete any subsequent purchase approval may be delayed due to
            resource limitations; and
    (vii)   economic, political and industrial conditions can adversely affect
            business opportunities without notice.

                                       14
<PAGE>

In addition, bookings that are executed during a particular quarter may not be
recognized as revenue during such quarter because such bookings may not have met
the Company's revenue recognition criteria.  No assurance can be given that the
Company will be able to effect new bookings in accordance with historical
results or management's expectations, and the inability of the Company to do so
could have a material adverse effect on the Company's operating results.

The Company believes that Year 2000 pressures have caused customers to forego or
delay the licensing of new software as they utilize resources to ensure that
their existing software products are Year 2000 ready.  Continuation of this
trend will have an adverse impact on Company revenues and results of operations.
There can be no assurance that revenues will return to historical levels or
obtain historical growth rates in the Year 2000 or beyond.

While the Company typically sells its software under a standard license
agreement, license agreements associated with large enterprise solutions often
require the negotiation of terms and conditions that differ substantially from
the Company's standard license agreement terms.  The negotiation of these
agreements may extend the sales cycle. The Company may not always obtain terms
and conditions that permit the recognition of revenue upon shipment of the
licensed product or under the percentage of completion method of contract
accounting rules.  Accordingly, revenue may not be recognized after shipment of
a product because specified milestones have not been met or because applicable
services have not been completed or cash is secured.

The Company has entered and expects to enter into fixed-price consulting
agreements, particularly in response to increased competition in the industry.
The Company has recognized lower profit margins on certain fixed-price service
agreements when compared to variable agreements. No assurance can be given that
the Company will be able to negotiate fixed-price agreements on terms that will
allow the Company to retain its historical operating margins.

The Company has historically generated a majority of its consulting revenue from
pre- and post-implementation services.  Recently, the Company has provided
services which include, but are not limited to, Year 2000 readiness engagements,
best practice solution engagements and other hardware and software solutions.
The Company intends to continue its pursuit of consulting engagements for which
the Company believes it is qualified. There can be no assurance that these
engagements will result in profit margins equal to or greater than those
engagements that are specific to a customer's product implementation.  Also,
there can be no assurance that consulting revenue generated from non-
implementation-related projects will continue in the future.

Employee- and facility-related expenditures comprise a significant portion of
the Company's operating costs and expenses, and are therefore relatively fixed
over the short term.  In addition, the Company's expense levels are based, in
significant part, on the Company's forecasted revenue.  If revenue levels fall
below expectations, net income is likely to be adversely affected.  There can be
no assurance that the Company will be profitable on a quarterly or annual basis
in the future. Any of the foregoing factors could cause the Company's future
operating results to fall below the expectations of public securities market
analysts, which could have an adverse effect on the trading price of the
Company's common stock.  See "Volatility of Stock Price."

RELIANCE ON THIRD PARTY TECHNOLOGY.

The Company generates revenue from internally developed software products, some
of which utilize technology licensed from third parties.  The Company expects to
continue utilizing third party technology and may enter into agreements with
additional business partners.  If sales of software utilizing third party
technology increase disproportionately, gross margins may be below historical
levels due to third party royalty obligations.  There can be no assurance that
the third parties will renew existing agreements with the Company or will not
require financial conditions which are unfavorable to the Company.  In addition,
there can be no assurance that existing third party agreements will not be
terminated.

INDUSTRY.

Certain software companies, including the Company, have experienced significant
economic downturns as a result of technological shifts, competitive pressures
and uncertainties caused by the Year 2000 transition.  These downturns are
characterized by decreased product demand, price erosion, work slowdowns and
layoffs.  The Company's operations may, in the future, experience substantial
fluctuations from period to period because of such industry patterns and general
economic and political conditions which could affect the timing of orders from
customers.

                                       15
<PAGE>

There can be no assurance that such factors will not have a materially adverse
effect on the Company's business, operating results or financial condition.

INTERNATIONAL.

The Company plans to increase its presence in international markets by marketing
its Tamaris, Horizon and consulting and services products.  The Aptos and
IMMPOWER product lines will be focused in the geographic areas that have
traditionally proven successful.  Risks associated with such pursuits include,
but are not limited to, the following:

    (i)      changing market demands,
    (ii)     economic and political conditions in foreign markets,
    (iii)    foreign exchange fluctuations,
    (iv)     longer collections cycles,
    (v)      difficulty in managing a geographically dispersed organization and
    (vi)     changes in international tax laws.

The downturn in the Asia Pacific business climate had and continues to have an
adverse effect on some market opportunities. Operating results are likely to be
adversely affected if the Company's expansion into international markets is not
successful.

COMPETITION.

The business and financial applications software market for complex
organizations is intensely competitive.  The Company's principal competitors
with Tamaris solutions are SAP AG, Oracle Corporation and PeopleSoft, Inc. With
the Horizon suite of products, the Company principally competes with Hyperion
Solutions Corporation, and Comshare, Inc. With Aptos solutions, the Company
principally competes with Oracle Corporation, Lawson Software, Inc., Platinum
Software, Inc.,  and Systems Union Group Ltd.  With the IMMPOWER suite of
products, the Company principally competes with Datastream/SQL, Indus
International, Marcam, Mincom, PSDI and SAP AG.

The Company also competes to a lesser extent with other independent software
application vendors.  Some of the Company's current and potential competitors
have substantially greater financial, technical, marketing and sales resources
than the Company.  Some of these competitors also offer business application
products not offered by the Company, primarily in the areas of human resources
and manufacturing.  However, Walker remains one of the few companies committed
to providing and enhancing applications for the mainframe environment.  Most of
the competitors listed above compete with Walker by offering UNIX-based
applications.

The Company encounters competition from a broader range of firms in the market
for professional services.  Principal competitors include Andersen Consulting,
IBM Global Services and the consulting divisions of the major accounting firms.
These competitors possess greater resources than the Company.  Niche consulting
firms which specialize in the Company's products also compete with the Company
primarily on the basis of price.

The principal competitive factors in the market for business and financial
applications software and services include:

    (i)     product functionality,
    (ii)    flexibility,
    (iii)   portability,
    (iv)    integration,
    (v)     reliability,
    (vi)    performance,
    (vii)   product availability,
    (viii)  speed of implementation,
    (ix)    quality of customer support and user documentation,
    (x)     vendor reputation,
    (xi)    experience,
    (xii)   financial stability,
    (xiii)  cost effectiveness, and
    (xiv)   price.

                                       16
<PAGE>

The Company believes that it competes favorably with respect to these factors.
There can be no assurance, however, that the Company will be able to compete
successfully in the future.

RAPID TECHNOLOGICAL CHANGE.

The software industry is characterized by rapid technological change.  The pace
of change has accelerated due to advances in mainframe and client/server
technology and the growth in Internet, Intranet and extranet utilization.  The
Company expects to evaluate potential opportunities and may invest in those
which are compatible with the Company's strategic direction.  However, there can
be no assurance that any such investments will be profitable.  The Company's
products are also designed primarily for use with certain mainframe and
client/server systems.  The introduction of products embodying new technologies
and the emergence of new industry standards can render existing products
obsolete.  Accordingly, the Company's future success depends in part upon its
ability to continue to enhance its current products and to develop and introduce
new products that respond to evolving customer requirements and keep pace with
technological development and emerging industry standards, such as new operating
systems, hardware platforms, interfaces and third party applications software.
There can be no assurance that:

    (i)    the Company will be successful in developing and marketing product
           enhancements or new products that respond to technological change,
           changes in customer requirements or emerging industry standards;
    (ii)   the Company will not experience difficulties that could delay or
           prevent the successful development, introduction and marketing of
           such products and enhancements; or
    (iii)  any new products or enhancements that it may introduce will achieve
           market acceptance.

PRODUCT DEVELOPMENT.

The Company's continued success is dependent on its continued ability to
introduce, develop and market new and enhanced versions of its software
products, although there can be no assurance that such ability can be
maintained.  The Company plans to continue its investment in product development
in future periods.  However, there can be no assurance that revenues will be
sufficient to support the future product development which is required for the
Company to be competitive.  Although the Company may be able to release new
products in addition to enhancements to existing products, there can be no
assurance that the Company's new or upgraded products will be accepted, will not
be delayed or canceled, or will not contain errors or "bugs" that could affect
the performance of the product or cause damage to users' data.

PROPRIETARY RIGHTS.

The Company regards its products as proprietary.  Through its license agreements
with customers and its internal security systems, confidentiality procedures and
employee agreements, the Company has taken steps to maintain the trade secrecy
of its products.  However, there can be no assurances that misappropriation will
not occur.  In addition, the laws of some countries do not protect the Company's
proprietary rights to the same extent as do the laws of the United States.
There can be no assurance that the confidentiality of any proprietary
information will provide any meaningful competitive advantage.  The Company has
no patents relating to its products.  The Company believes that, because of the
rapid pace of technological change in the computer software industry, that
patents and copyrights are less significant than factors such as the knowledge,
ability and experience of the Company's employees, frequent product enhancements
and the timeliness and quality of support services.  There can be no assurance
that the Company's current efforts to retain its products as proprietary will be
adequate.

Although the Company believes that its products do not infringe upon the
proprietary rights of third parties, there can be no assurance that third
parties will not assert infringement claims against the Company in the future
with respect to current or future products or that any such assertions will not
require the Company to enter into royalty arrangements or result in costly
litigation.

PRODUCT LIABILITY.

The Company's license agreements with its customers contain provisions designed
to limit the Company's exposure to potential product liability claims. It is
possible, however, that the limitation of liability provisions contained in such
license agreements may not be enforced as a result of international, federal,
state and local laws or ordinances or unfavorable judicial decisions. The
license and support of the Company's software for use in mission critical

                                       17
<PAGE>

applications creates the risk of product liability claims against the Company.
Damage liability or injunctive relief resulting from such a claim could cause a
materially adverse impact on the Company's business, operating results and
financial condition.

EMPLOYEES.

The Company believes that its continued success will depend in large part upon
its ability to attract, train and retain highly-skilled technical, sales,
marketing and managerial personnel.  Because of a high level of demand,
competition for such personnel is intense and the Company sometimes experiences
difficulty in locating candidates with appropriate qualifications or within
desired geographic locations.  Revenue growth is dependent on the Company's
ability to attract, train, retain and productively manage such personnel.

ACQUISITION-RELATED RISKS.

The Company has acquired and may continue to acquire complimentary businesses,
products or technology.  The process of integrating an acquired company's
business into the Company's operations may result in unforeseen operating
difficulties and expenditures and may require significant management attention
that would otherwise be available for the ongoing development of the Company's
business.  There can be no assurance that any anticipated benefits of an
acquisition will be realized.  Future acquisitions by the Company could result
in potentially dilutive issuances of equity securities, the incurrence of debt
and contingent liabilities and amortization related to goodwill and other
intangible assets, which could materially affect the Company's operating results
and financial condition.  Acquisitions involve numerous risks, including
difficulties in the assimilation of operations, technologies and products of the
acquired company, risks associated with entering markets in which the Company
has no or limited direct prior experience and the potential loss of key
employees of the acquired company.

VOLATILITY OF STOCK PRICE.

High technology companies, including the Company, frequently experience
volatility in their common stock prices.  Factors such as quarterly fluctuations
in results of operations, announcements of technological innovations by the
Company or its competitors or the introduction of new products by the Company or
its competitors and macroeconomic conditions in the computer hardware and
software industries generally may have a significant adverse impact on the
market price of the Company's stock.  If revenues or earnings in any quarter
fail to meet the expectations of the investment community, there could be an
immediate impact on the Company's stock price.  In addition, the Company has
issued shares and stock options which if sold directly or exercised and sold on
the open market in large concentrations, could cause the Company's stock price
to decline in the short term. Furthermore, the stock market has from time to
time experienced extreme price and volume fluctuations which have particularly
affected the market price for many high technology companies, in some cases
unrelated to the operating performance of those companies.  These broad market
fluctuations may materially adversely affect the market price of the stock of
the Company.

Item 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company has U.S. dollar interest-bearing investments that are subject to
interest rate risk.  The Company analyzed its investments at year-end to
determine the sensitivity to interest rate changes.  The fair values of these
instruments were determined by net present values.   The Company's sensitivity
analysis used  the same change in interest rates for all maturities.  All other
factors were held constant.  If interest rates increased by 10 percent the
expected effect on net income related to the Company's investments would be
immaterial.

The majority of the Company's revenues are denominated in the U.S. dollar.  The
Company does not engage in interest rate swaps or enter into foreign currency
forward contracts.

No material changes have occurred since December 31, 1998.

                                       18
<PAGE>

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

(a)  The Annual Meeting of Stockholders of Walker Interactive Systems, Inc. was
     held on May 20, 1999.

(b)  William A. Hasler, Leonard Y. Liu and David C. Wetmore were elected to the
     Board of Directors to hold office until the 2002 Annual Meeting of
     Stockholders. The Directors whose term of office as Director continued
     after the meeting were: Richard C. Alberding, Tania Amochaev and John M.
     Lillie.

(c)  The matters voted upon at the meeting and the voting of the stockholders
     with respect thereto are as follows:

     (i)    The election of William A. Hasler as a Director to hold office until
            the 2002 Annual Meeting of Stockholders:

            For: 10,798,658   Withheld: 1,927,983

     (ii)   The election of Leonard Y. Liu as a Director to hold office until
            the 2002 Annual Meeting of Stockholders:

            For: 10,792,613   Withheld: 1,934,028

     (iii)  The election of David C. Wetmore as a Director to hold office until
            the 2002 Annual Meeting of Stockholders:

            For: 10,804,158   Withheld: 1,922,483

     (iv)   To approve the Company's 1992 Employee Stock Purchase Plan, as
            amended, to increase the aggregate number of shares of Common Stock
            authorized for issuance under such plan from 950,000 shares to
            1,500,000, an increase of 550,000 shares:

            For:  9,840,707   Against: 2,861,099   Abstain:24,835

     (v)    To approve the Company's 1993 Non-Employee Directors' Stock Option
            Plan, as amended, to increase the aggregate number of shares of
            Common Stock authorized for issuance under such plan from 250,000
            shares to 350,000, an increase of 100,000 shares.

            For:  9,618,396   Against: 3,084,055   Abstain: 24,193

     (vi)   To ratify the selection of Deloitte & Touche LLP as independent
            public accountants of the Company for its fiscal year ending
            December 31, 1999.

            For: 11,354,837   Against: 1,363,616   Abstain: 8,188

                                       19
<PAGE>

PART II.  OTHER INFORMATION
---------------------------

Item 6.  EXHIBITS AND REPORTS ON FORM 8-K

         (a)   Exhibits

               10.14  1995 Non-Statutory Stock Option Plan for Non-Officer
                      Employees, as amended to date

               10.19  Agreement between Leonard Y. Liu and the Registrant

               27.1   Financial Data Schedule (electronic filing only)

         (b)   Reports on Form 8-K

               The Company filed no reports on Form 8-K during the quarter ended
               June 30, 1999.

                                       20
<PAGE>

                        WALKER INTERACTIVE SYSTEMS, INC.
                                   FORM 10-Q
                                   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.


                        WALKER INTERACTIVE SYSTEMS, INC.
                        --------------------------------
                                  (Registrant)




Date:  August 16, 1999                By:   /s/ Michael B. Shahbazian
       ---------------                     --------------------------
                                           Michael B. Shahbazian
                                           Senior Vice President and
                                           Chief Financial Officer
                                           (Principal Financial Officer)

                                       21
<PAGE>

                        WALKER INTERACTIVE SYSTEMS, INC.
                                   FORM 10-Q
                               INDEX TO EXHIBITS

    10.14  1995 Non-Statutory Stock Option Plan for Non-Officer Employees, as
           amended to date

    10.19  Agreement between Leonard Y. Liu and the Registrant

    27.1   Financial Data Schedule (electronic filing only)

                                       22