<PAGE>
 
                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-Q

(Mark One)

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

               For the quarterly period ended March 31, 1999

                                       OR

   [ ]         TRANSITION REPORT PURSUANT TO SECTION 13 OR
               THE SECURITIES EXCHANGE ACT OF 1934

               For the transition period from _________ to __________

                        Commission File Number:  0-22145

                             RWD TECHNOLOGIES, INC.
             (Exact name of Registrant as specified in its Charter)

              Maryland                                  52-1552720
    (State or other jurisdiction of                  (I.R.S. Employer
    incorporation or organization)                  Identification No.)

     10480 Little Patuxent Parkway                       21044-3530
          Columbia, Maryland                             (Zip Code)
(Address of principal executive offices)

                                 (410) 730-4377
              (Registrant's telephone number, including area code)

                                      None
    (Former name, former address and former fiscal year - if changed since 
                                 last report)

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 March 31, 1999, 15,022,469 shares of common stock $0.10 par value ("Common
Stock") of the Registrant were outstanding.
<PAGE>
 
                             RWD TECHNOLOGIES, INC.

                                     INDEX

                                   FORM 10-Q
<TABLE>
<CAPTION>
                                                                                          Page
                                                                                          ----
PART I - FINANCIAL INFORMATION                                              
                                                                            
<S>             <C>                                                                        <C>  
Item 1.         Financial Statements                                        
                                                                            
                Consolidated Condensed Balance Sheets as of March 31, 1999,                 1
                (Unaudited) and December 31, 1998                           
                                                                            
                Consolidated Statements of Income for the Three Months ended                2
                March 31, 1999, and 1998 (Unaudited)                        
                                                                            
                Consolidated Statements of Cash Flows for the Three Months                  3
                ended March 31, 1999, and 1998 (Unaudited)                  
                                                                            
                Notes to Consolidated Financial Statements                                  4
                                                                            
Item 2.         Management's Discussion and Analysis of Financial Condition                 6
                and Results of Operations                                   
                                                                            
Item 3.         Quantitative and Qualitative Disclosures About Market Risk                 N/A
                                                                            
PART II - OTHER INFORMATION                                                 
                                                                            
Item 1.         Legal Proceedings                                                          N/A
                                                                            
Item 2.         Changes in Securities                                                       11
                                                                            
Item 3.         Defaults Upon Senior Securities                                            N/A
                                                                            
Item 4.         Submission of Matters to a Vote of Security Holders                        N/A
                                                                            
Item 5.         Other Information                                                          N/A
                                                                            
Item 6.         Exhibits and Reports on Form 8-K                                            11
                                                                            
Signatures                                                                                  12
</TABLE>
<PAGE>
 
                         PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements

                    RWD TECHNOLOGIES, INC., AND SUBSIDIARIES
                     Consolidated Condensed Balance Sheets
                                 (In thousands)

<TABLE>
<CAPTION>
                                                                      March 31, 1999            December 31, 1998
                                                                      --------------            -----------------
                                                                        (unaudited)
                             ASSETS
<S>                                                                    <C>                       <C>
CURRENT ASSETS:
  Cash and investments........................................           $48,342                    $51,224
  Contract accounts receivable, net...........................            22,250                     20,388
  Costs and estimated earnings in excess of billings on
     uncompleted contracts....................................            10,536                      7,889
Prepaid expenses and other....................................             1,489                      1,199
                                                                 ---------------------       --------------------
     Total Current Assets.....................................            82,617                     80,700
NET FIXED ASSETS:.............................................             9,918                      9,394
OTHER ASSETS..................................................               359                        300
                                                                 ---------------------       --------------------
     Total Assets.............................................           $92,894                    $90,394
                                                                 =====================       ====================

            LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable and accrued expenses.......................           $ 9,938                    $ 9,245
  Billings in excess of costs and estimated earnings on
     uncompleted contracts....................................             4,317                      4,554
  Deferred tax liability......................................               471                        471
  Current portion of capital lease obligation.................                16                         31
                                                                 ---------------------       --------------------
     Total Current Liabilities................................            14,742                     14,301
NONCURRENT LIABILITIES:
  Other liabilities...........................................               592                        834
  Deferred tax liability......................................               998                      1,298
                                                                 ---------------------       --------------------
     Total Liabilities........................................            16,332                     16,433
                                                                 ---------------------       --------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
  Common stock................................................             1,502                      1,502
  Additional paid-in capital..................................            51,560                     52,461
  Accumulated comprehensive income............................                58                         81
  Retained earnings...........................................            23,442                     19,917
                                                                 ---------------------       --------------------
     Total Stockholders' Equity...............................            76,562                     73,961
                                                                 ---------------------       --------------------
        Total Liabilities and Stockholders' Equity............           $92,894                    $90,394
                                                                 =====================       ====================
</TABLE>

         See accompanying notes to consolidated financial statements.

                                                                               1
<PAGE>
 
                   RWD TECHNOLOGIES, INC., AND SUBSIDIARIES
                       Consolidated Statements of Income
               (Unaudited) (In thousands, except per share data)

<TABLE>
<CAPTION>
                                                      Three Months Ended March 31,
                                                      1999                   1998
                                              ------------------     ------------------
<S>                                              <C>                    <C>
Revenue....................................              $33,242                $26,204
Cost of services...........................               23,592                 18,411
                                              ------------------     ------------------
 Gross profit..............................                9,650                  7,793
General and administrative expenses........                4,024                  3,446
                                              ------------------     ------------------
Operating income...........................                5,626                  4,347
Other income, net..........................                  460                    439
                                              ------------------     ------------------
 Income before taxes.......................                6,086                  4,786
Income tax provision.......................                2,282                  1,819
                                              ------------------     ------------------
 Net income................................              $ 3,804                $ 2,967
                                              ==================     ==================

 Diluted earnings per share................                $0.24                  $0.19
                                              ==================     ==================
 Basic earnings per share..................                $0.25                  $0.20
                                              ==================     ==================

 Weighted average shares outstanding -
       Diluted calculation.................               15,920                 15,947
                                              ==================     ==================
       Basic calculation...................               15,032                 14,766
                                              ==================     ==================
</TABLE>

         See accompanying notes to consolidated financial statements.

                                                                               2
<PAGE>
 
                    RWD TECHNOLOGIES, INC., AND SUBSIDIARIES
                     Consolidated Statements of Cash Flows
                           (Unaudited) (In thousands)

<TABLE>
<CAPTION>
                                                                                Three Months Ended March 31,
                                                                               1999                      1998
                                                                      -------------------       -------------------
<S>                                                                     <C>                       <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income.....................................................              $ 3,804                   $ 2,967
  Adjustments to reconcile net income to net cash
    provided by operating activities:
      Depreciation and amortization..............................                  967                       865
      (Gain)/loss on sale of fixed assets........................                   (1)                       37
      Deferred income taxes......................................                 (300)                     (305)
      (Increase)/decrease in trade accounts receivable...........               (1,862)                       21
      Increase in costs and earnings in
        excess of billings on uncompleted contracts..............               (2,647)                   (3,361)
      Increase in prepaid expense and other......................                 (230)                     (262)
      Increase in accounts payable and accrued expenses..........                1,611                     2,493
      (Decrease)/increase in billings in excess of
         earnings on uncompleted contracts.......................                 (237)                       48
      Decrease in other liabilities..............................                 (242)                     (184)
                                                                      -------------------       -------------------
      Net cash provided by operating activities..................                  863                     2,319
                                                                      -------------------       -------------------

CASH FLOWS FROM INVESTING ACTIVITIES:
      Purchases of investments, net..............................                 (351)                     (239)
      Purchase of fixed assets...................................               (1,740)                   (1,314)
      Increase in other assets...................................                  (59)                      (32)
      Proceeds from sale of fixed assets.........................                    8                         5
                                                                      -------------------       -------------------
      Net cash used in investing activities......................               (2,142)                   (1,580)
                                                                      -------------------       -------------------

CASH FLOWS FROM FINANCING ACTIVITIES:
      Principal portion paid on capital lease....................                  (15)                      (12)
      Issuance of common stock...................................                  252                       624
      Repurchase of common stock.................................               (2,168)                       --
                                                                      -------------------       -------------------
      Net cash (used in) provided by financing activities........               (1,931)                      612
                                                                      -------------------       -------------------

NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS......................................................               (3,210)                    1,351
                                                                      -------------------       -------------------
CASH AND CASH EQUIVALENTS, beginning of period...................               13,328                     3,620
                                                                      -------------------       -------------------
CASH AND CASH EQUIVALENTS, end of period.........................              $10,118                   $ 4,971
                                                                      ===================       ===================
Supplemental Cash Flow Disclosures:
      Income taxes paid..........................................              $ 1,613                   $   246
                                                                      ===================       ===================
      Interest expense paid......................................              $     2                   $     5
                                                                      ===================       ===================
</TABLE>

         See accompanying notes to consolidated financial statements.

                                                                               3
<PAGE>
 
                   RWD TECHNOLOGIES, INC., AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements
                                  (Unaudited)

1.  Summary of Significant Accounting Policies:

Organization and Business
-------------------------

  RWD Technologies, Inc., and subsidiaries (the ''Company'') was incorporated on
January 22, 1988, in the State of Maryland. The Company provides a broad range
of integrated solutions designed to improve the productivity and effectiveness
of workers in complex operating environments.

  The Company's operations depend upon, among other things, the Company's
ability to attract, develop, and retain a sufficient number of highly skilled
professional employees. In addition, the Company's revenue is generated from a
limited number of clients in specific industries. Future operations may be
affected by its ability to retain these clients and cyclical and economic
factors that could have an impact on those industries.

Basis of Presentation
---------------------

  The accompanying consolidated financial statements include the accounts of RWD
Technologies, Inc., and its wholly owned subsidiaries and are presented on the
accrual basis of accounting in accordance with generally accepted accounting
principles. All significant intercompany balances and transactions have been
eliminated in consolidation. The preparation of consolidated financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities as of
the date of the consolidated financial statements and the reported amounts of
total revenue and expenses during the reporting period. Actual results could
differ from those estimates.

Comprehensive Income
--------------------

  Comprehensive income is defined as the change in equity of a business
enterprise during a period from transactions and other events and circumstances
from nonowner sources. The Company's comprehensive income for the periods
presented is listed below:

<TABLE>
<CAPTION>
                                                                         For the Three Months Ended March 31,
                                                               ------------------------------------------------------
                                                                                    (in thousands)
                                                                           1999                          1998
                                                               ------------------------        ----------------------
<S>                                                               <C>                             <C>
Net Income as Reported                                                           $3,804                        $2,967
Effect of Unrealized Gains on Investments Available-for-Sale                        (23)                            4
                                                               ------------------------        ----------------------
Comprehensive Net Income                                                         $3,781                        $2,971
                                                               ========================        ======================
</TABLE>

                                                                               4
<PAGE>
 
2.  Business Segments:

  The Company believes it has reportable operating segments, as defined by
Statement of Financial Accounting Standards No. 131. The Company has identified
four distinct operating segments: Information Technology Services; Enterprise
Resource Planning Services; Lean Manufacturing Consulting Services; and
Technology Performance Support Services.

  The accounting policies for these segments are the same as those described in
the summary of significant accounting policies. Depreciation and amortization
expense is reported in each operating segment. However, the Company's tangible
assets are not managed as distinct asset groups. All tangible assets are
recorded at the corporate level with depreciation expense allocated to operating
segments based on headcount. Interest expense, interest income, and income taxes
are reported at the corporate level only and are not disclosed below.

<TABLE>
<CAPTION>
                                                            For the Three Months Ended March 31,
                                                  -----------------------------------------------------
                                                                       (in thousands)
                                                             1999                           1998
                                                  ------------------------       ----------------------
<S>                                                  <C>                             <C>
Revenue (all external):
    Information Technology                                         $ 8,167                       $ 6,229
    Enterprise Resource Planning                                    12,107                         7,282
    Lean Manufacturing Consulting                                    4,813                         4,588
    Technology Performance Support                                   8,155                         8,105
                                                  ------------------------       -----------------------
Total Revenue                                                      $33,242                       $26,204
                                                  ========================        ======================
 
Gross Profit:
    Information Technology                                         $ 2,872                       $ 2,298
    Enterprise Resource Planning                                     3,371                         2,004
    Lean Manufacturing Consulting                                    1,449                         1,486
    Technology Performance Support                                   1,958                         2,005
                                                  ------------------------       -----------------------
Total Gross Profit                                                 $ 9,650                       $ 7,793
                                                  ========================        ======================
 
Depreciation and Amortization Expense Allocated To Segments:
    Information Technology                                         $   180                       $   135
    Enterprise Resource Planning                                       287                           161
    Lean Manufacturing Consulting                                       59                            51
    Technology Performance Support                                     199                           198
                                                  ------------------------       -----------------------
Total Allocated to Segments                                            725                           545
Amount not Allocated to Segments                                       242                           309
                                                  ------------------------       -----------------------
Total Depreciation and Amortization Expense                        $   967                       $   854
                                                  ========================        ======================
Revenue (by geography):
    United States                                                  $30,019                       $22,802
    Non-United States                                                3,223                         3,402
                                                  ------------------------       -----------------------
Total Revenue                                                      $33,242                       $26,204
                                                  ========================        ======================
</TABLE>

                                                                               5
<PAGE>
 
Item 2.   Management's Discussion and Analysis of Financial Condition and
          Results of Operations.

Results of Operations

  Quarter Ended March 31, 1999, Compared to Quarter Ended March 31, 1998

  Revenue.  Revenue for the total Company increased by $7.0 million (or 26.9
percent), from $26.2 million for the quarter ending March 31, 1998, to $33.2
million for the quarter ending March 31, 1999. The Company experienced revenue
growth in all of its operating segments as follows:

  .  Information Technology Services. Revenue for the Company's Information
     Technology Services increased by $1.9 million (or 31.1 percent), from $6.2
     million in the quarter ending March 31, 1998, to $8.2 million in the
     quarter ending March 31, 1999, representing 23.8 percent of the Company's
     revenue in 1998 and 24.6 percent of the Company's revenue in 1999. Key
     factors in revenue increases included strong follow-on business with
     existing clients as well as business deriving from expansion into strategic
     IT consulting and alliance relationships.

  .  Enterprise Resource Planning Services.  Revenue for the Company's
     Enterprise Resource Planning Services increased by $4.8 million (or 66.3
     percent), from $7.3 million in the quarter ending March 31, 1998, to $12.1
     million in the quarter ending March 31, 1999, representing 27.8 percent of
     the Company's revenue in 1998 and 36.4 percent of the Company's revenue in
     1999. This growth was due in part to strong demand in the market for the
     services offered by the Company throughout 1998, as well as the Company's
     alliances with SAP and PricewaterhouseCoopers, partially offset by
     moderating demand in the ERP market in 1999.

  .  Lean Manufacturing Consulting Services.  Revenue for the Company's Lean
     Manufacturing Consulting Services increased by $224,300 (or 4.9 percent),
     from $4.6 million in the quarter ending March 31, 1998, to $4.8 million in
     the quarter ending March 31, 1999, representing 17.5 percent of the
     Company's revenue in 1998 and 14.5 percent of the Company's revenue in
     1999. This increase in revenue was attributable to growth in business with
     automotive supplier and other non-auto industry clients, and increases in
     billing rates charged to clients, partially offset by decreases in business
     with a large lean manufacturing client.

  .  Technology Performance Support Services. Revenue for the Company's
     Technology Performance Support Services increased by $49,600 (or 0.6
     percent), from $8.1 million in the quarter ending March 31, 1998, to $8.2
     million in the quarter ending March 31, 1999, representing 30.9 percent of
     the Company's revenue in 1998 and 24.5 percent of the Company's revenue in
     1999. This increase in revenue resulted primarily from increases in billing
     rates charged to clients, partially offset by decreases in staff
     utilization. Revenues in the first quarter of 1999 were also 9.8 percent
     ahead of the fourth quarter of 1998. This reversed the downward revenue
     trend experienced during 1998 that was attributed to the transfer of
     personnel from the performance support area to the ERP area during 1998.

                                                                               6
<PAGE>
 
  The Company's total number of employees grew 5.1 percent, from 988 at the end
of 1998 to 1,038 employees at March 31, 1999.

  Gross Profit.  Gross profit for the total Company increased by $1.9 million
(or 23.8 percent), from $7.8 million in the quarter ending March 31, 1998, to
$9.6 million in the quarter ending March 31, 1999, and decreased from 29.7
percent of revenue in 1998 to 29.0 percent of revenue in 1999. This decrease in
gross profit as a percentage of revenue resulted primarily from decreases in
staff utilization, increases in facility rent and depreciation on capital
equipment, partially offset by decreases in indirect travel. Gross profit for
individual operating segments were as follows:

  .  Information Technology Services. Gross profit for Information Technology
     Services increased by 25.0 percent from $2.3 million in the quarter ending
     March 31, 1998, to $2.9 million in the quarter ending March 31, 1999. Gross
     profit margin for Information Technology Services decreased from 36.9
     percent of this segment's revenue in the first quarter of 1998 to 35.2
     percent in 1999. This decrease in gross profit margin resulted primarily
     from decreases in staff utilization, partially offset by decreases as a
     percent of revenue in employee related expenses.

  .  Enterprise Resource Planning Services. Gross profit for Enterprise Resource
     Planning Services increased by 68.3 percent from $2.0 million in the
     quarter ending March 31, 1998, to $3.4 million in the quarter ending March
     31, 1999. Gross profit margin for Enterprise Resource Planning Services
     increased from 27.5 percent of this segment's revenue in the first quarter
     of 1998 to 27.8 percent in 1999. This increase in gross profit margin
     resulted primarily from increases in the proportion of labor revenue to
     other revenue and decreases as a percent of revenue in employee related
     expenses, partially offset by decreases in staff utilization.

  .  Lean Manufacturing Consulting Services. Gross profit for Lean Manufacturing
     Consulting Services decreased by 2.5 percent from $1.49 million in the
     quarter ending March 31, 1998, to $1.45 million in the quarter ending March
     31, 1999. Gross profit margin for Lean Manufacturing Consulting Services
     decreased from 32.4 percent of this segment's revenue in the first quarter
     of 1998 to 30.1 percent in 1999. This decrease in gross profit margin
     resulted primarily from decreases in staff utilization, and, as a percent
     of revenue, employee related expenses, partially offset by increases in
     billing rates.

  .  Technology Performance Support Services. Gross profit for Technology
     Performance Support Services decreased by 2.4 percent from $2.0 million in
     the quarter ending March 31, 1998, to $1.96 million in the quarter ending
     March 31, 1999. Gross profit margin for Technology Performance Support
     Services decreased from 24.7 percent of this segment's revenue in the first
     quarter of 1998 to 24.0 percent in 1999. This decrease in gross profit
     margin resulted primarily from decreases in the proportion of labor revenue
     to other revenue and decreases in staff utilization, partially offset by
     increases in billing rates.

  General and Administrative Expenses. General and administrative expenses
increased by $577,900 (or 16.8 percent), from $3.4 million in the first quarter
of 1998 to $4.0 million in the first quarter of 1999, decreasing from 13.2
percent of revenue in 1998 to 12.1 percent of revenue in 1999. This decrease in
general and administrative expenses as a percentage of revenue resulted
primarily

                                                                               7
<PAGE>
 
from decreases as a percent of revenue in employee related expenses and
depreciation, partially offset by increases in consultant fees.

  Operating Income. As a result of the foregoing, the Company's operating income
increased by $1.3 million (or 29.4 percent), from $4.3 million in the first
quarter of 1998 to $5.6 million in the first quarter of 1999 and increased from
16.6 percent of revenue in the first quarter of 1998 to 16.9 percent of revenue
in the first quarter of 1999.

  Other Income. Other income was $439,500 in the first quarter of 1998 and
$460,600 in the first quarter of 1999. In both periods, this income consisted
primarily of interest income from cash and investment balances partially offset
by interest expense from the Company's capital leases.

  Net Income. Net income increased by $836,600 (or 28.2 percent), from $3.0
million in the first quarter of 1998 to $3.8 million in the first quarter of
1999, increasing from 11.3 percent of revenue in 1998 to 11.4 percent of revenue
in 1999.


Liquidity and Capital Resources

  The Company's cash and investments were $48.3 million at March 31, 1999,
compared to $51.2 million at December 31, 1998. Decreases in cash and
investments at March 31, 1999, were attributable primarily to decreases in cash
provided by investing and financing activities as they relate to the repurchase
of common stock and increases in the purchase of capital equipment. The
Company's working capital was $67.9 million at March 31, 1999, and $66.4 million
at December 31, 1998.

  The Company's operating activities provided cash of approximately $863,000 for
the three months ended March 31, 1999, compared to $2.3 million for the same
period in 1998. The cash provided from operations in the first quarter of 1999
resulted primarily from increases in net income, trade accounts payable, and
depreciation expense, partially offset by increases in unbilled revenue, and
accounts receivable.

  Investing activities used cash of $2.1 million in the three months ended March
31, 1999, compared to $1.6 million for the same period in 1998. Cash used for
investing activities in the three months ended March 31, 1999, consisted
primarily of the net purchase of capital equipment.

  Financing activities utilized cash of $1.9 million in the three months ended
March 31, 1999, compared to generation of $612,500 for the same period in 1998.
Cash used for financing activities in the three months ended March 31, 1999,
consisted primarily of the repurchase of 145,000 shares of the Company's common
stock, partially offset by proceeds from the issuance of common stock due to the
exercise of employee stock options.

  The Company has a $10.0 million unsecured revolving line of credit with a
commercial bank, which bears interest at the 30-day, LIBOR rate, plus 1.0
percent (5.3 percent on March 31, 1999). The Company utilizes this line of
credit to finance a portion of its working capital needs. There was no balance
outstanding on the line of credit as of March 31, 1999, or on December 31, 1998.

                                                                               8
<PAGE>
 
  During the quarter ending March 31, 1999, the Company made $1.5 million in
capital expenditures, primarily for office furniture, computer and office
equipment, and leasehold improvements to support the growth in its professional
and administrative staff. Capital expenditures currently are funded from
available cash, although the Company may consider alternative financing methods,
such as equipment leases or asset-based borrowings in future periods.


Year 2000 Compliance

  The Company has commenced a process to assure Year 2000 compliance of all
hardware, software, and ancillary equipment which are date dependent. The
process involves four phases:

     Phase I - Inventory and Data Collection. This phase involves an
     identification of all items that are date dependent. The Company commenced
     this phase in the fourth quarter of 1997. This phase is now complete.

     Phase II - Compliance Requests. This phase involves requests to systems
     vendors for verification that the systems identified in Phase I are Year
     2000 compliant. The Company has identified critical systems that cannot be
     updated or certified as compliant. The Company commenced this phase in the
     first quarter of 1998. This phase is now complete. The Company has verified
     that its accounting, payroll, human resources, banking and local wide area
     network hardware and software systems are compliant. In addition, the
     Company has determined that substantially all of its personal computers and
     PC applications are compliant.
 
     Phase III - Test, Fix, and Verify. This phase involves testing all items
     that are date dependent and upgrading all non-compliant systems. The
     Company has made substantial progress in implementing this phase of its
     Year 2000 compliance program and expects to complete this phase during the
     second quarter of 1999.
 
     Phase IV - Final Testing, New Item Compliance. This phase involves review
     of all systems for compliance and re-testing as necessary. During this
     phase, all new systems and equipment will be tested for compliance. The
     Company expects to complete this phase by the end of the third quarter of
     1999.

  To date, the Company has no knowledge that any of its major systems are not
Year 2000 compliant or will not be compliant by the end of the second quarter of
1999. The Company has not incurred significant expenditures and should achieve
substantial Year 2000 compliance without the need to acquire significant new
hardware, software, or systems other than in the ordinary course of business.
The Company is not aware of any non-compliance that would have a material effect
on its operations if not replaced or that would be costly to replace. The
Company is not aware of any non-compliance by its suppliers that is likely to
have material impact on the Company's business. Nevertheless, there can be no
assurance that unanticipated non-compliance will not occur, that such non-
compliance would not require material costs to repair or that it would not cause
material disruptions if not repaired.

                                                                               9
<PAGE>
 
  The Company delivers software solutions to clients and believes that all such
software delivered over the past several years is Year 2000 compliant. Because
such software is usually the property of the client, the Company has no control
over modifications to the software by the client or over its integration with
other software, either of which could potentially cause Year 2000 compliance
difficulties.


Effects of Inflation

  Inflation has not had a significant effect on the Company's business during
the past three years. The Company cannot predict what effect, if any, inflation
may have on its future results of operations.


Forward Looking Statements

     Certain statements contained herein, including statements regarding
development of the Company's services, markets, and future demands for the
Company's services, and other statements regarding matters that are not
historical facts, are forward-looking statements (as defined in the Private
Securities Litigation Reform Act of 1995). Such forward-looking statements
include risks and uncertainties; consequently, actual results may differ from
those expressed or implied thereby. Factors that could cause actual results to
differ materially are described in the Company's filings with the Securities and
Exchange Commission including its most recent Form 10-K, and include reliance on
strategic alliances, geographic expansion, slower growth in the Enterprise
Resource Planning industry, rapid change in the Information Technology sector,
customer and industry revenue concentration, attracting and retaining personnel,
increasing competition, and other factors such as the Company's ability to
effectively manage its growth, the inherent variability of its operating
results, various risks associated with the success and profitability of
individual projects, and its dependence on key personnel.

                                                                              10
<PAGE>
 
                          PART II - OTHER INFORMATION

Item 2.   Changes in Securities.

(c)       Issuance of Securities

          N/A


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

(a)       Exhibits

          27. Financial Data Schedule

(b)       Current Reports on Form 8-K

          N/A

                                                                              11
<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.

                                 RWD TECHNOLOGIES, INC.



                                 By:  /s/ Ronald E. Holtz
                                      -------------------
                                      Ronald E. Holtz
                                      Vice President, Chief Financial Officer,
                                      and Director

Dated: May 12, 1999

   Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
            Name                                         Capacity                              Date
----------------------------            -------------------------------------------   -----------------------
<S>                                     <C>                                           <C>
/s/ Robert W. Deutsch                   Chairman of the Board,                             May 12, 1999
----------------------------
Robert W. Deutsch                       Chief Executive Officer, and Director
 
/s/ Ronald E. Holtz                     Vice President, Chief Financial Officer,           May 12, 1999
----------------------------
Ronald E. Holtz                         and Director
</TABLE>