<PAGE>   1
                       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 March 31, 1999.

                                       or

         Transition Report pursuant to Section 13 or 15(d) of the Securities
-----    Exchange Act of 1934 for the transition period from ______________ to
         _______________.

Commission file number 0-27056


                                   HIE, Inc.
                                   ---------
             (Exact name of registrant as specified in its charter)

          Georgia                                            58-2112366      
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(State or other jurisdiction of                          (I.R.S. Employer
incorporation or organization)                           Identification No.)


1850 Parkway Place, Suite 1100,  Marietta,  Georgia             30067        
------------------------------------------------------------------------------
       (Address of principal executive offices)              (Zip Code)

                                 (770) 423-8450
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              (Registrant's telephone number, including area code)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                            YES  X         NO
                               -----         -----

The number of shares outstanding of the issuer's only class of Common Stock, $
 .01 par value, together with associated preferred stock purchase rights (the
"Common Stock"), as of May 10, 1999 was 25,324,724 shares.

                      Exhibit Index is on Page 15 herein.


                                       1
<PAGE>   2

                         PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
HIE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)

<TABLE>
<CAPTION>
                                                                                     March 31,        December 31,
                                                                                       1999               1998
                                                                                     ---------        ------------
<S>                                                                                  <C>              <C>
ASSETS
Current assets:
  Cash and cash equivalents                                                           $  1,978          $  3,167
  Trade accounts receivable, less allowance of $720 at March 31, 1999
    and December 31, 1998                                                               12,780            12,295
  Other current assets                                                                   2,616             2,555
                                                                                      --------          --------
    Total current assets                                                                17,374            18,017

Purchased software, net of accumulated amortization of $1,449 and
 $1,341 at March 31, 1999 and December 31, 1998, respectively                            1,857             1,946
Capitalized software development costs, net of accumulated
 amortization of $416 and $329 at March 31, 1999 and
 December 31, 1998, respectively                                                         1,924             1,606
Property and equipment, net of accumulation depreciation of $2,413
 and $2,194 at March 31, 1999 and December 31, 1998, respectively                        2,673             2,289
Excess of cost over net assets of businesses acquired, less
 accumulated amortization of $2,779 and $2,611 at March 31, 1999
 and December 31, 1998, respectively                                                     7,391             7,535
Other assets                                                                               120               142
                                                                                      --------          --------
    Total assets                                                                      $ 31,339          $ 31,535
                                                                                      ========          ========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Current installments of long-term debt and capital lease obligations                $  2,922          $  2,911
  Accounts payable, principally trade                                                    1,823             1,276
  Accrued liabilities                                                                    2,336             1,718
  Deferred service revenue                                                               4,662             4,690
                                                                                      --------          --------
    Total current liabilities                                                           11,743            10,595
Other liabilities                                                                          529               642
                                                                                      --------          --------
    Total liabilities                                                                   12,272            11,237

Shareholders' equity:
  Preferred stock, without par value. Authorized 20,000 shares;
    designated Series A cumulative preferred stock 500 shares;
    issued none                                                                             --                --
  Common stock, $.01 par value. Authorized 50,000 shares; issued
    and outstanding 25,325 and 24,972 shares at March 31, 1999
    and December 31, 1998, respectively                                                    253               250
  Additional paid-in capital                                                            41,835            41,301
  Accumulated deficit                                                                  (23,021)          (21,253)
                                                                                      --------          --------
Shareholders' equity                                                                    19,067            20,298
                                                                                      --------          --------
    Total liabilities and shareholders' equity                                        $ 31,339          $ 31,535
                                                                                      ========          ========
</TABLE>

See accompanying Notes to Condensed Consolidated Financial Statements.


                                       2
<PAGE>   3

HIE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)

<TABLE>
<CAPTION>
                                                                  Three Months Ended March 31,
                                                                  ----------------------------
                                                                    1999                1998
                                                                  --------            --------
<S>                                                               <C>                 <C>
Revenue:
   Software                                                       $    981            $  1,979
   Services and other                                                4,264               3,222
                                                                  --------            --------
Total revenue                                                        5,245               5,201
                                                                  --------            --------

Cost of revenue:
   Software                                                            251                 222
   Services and other                                                2,294               1,565
                                                                  --------            --------
Total cost of revenue                                                2,545               1,787
                                                                  --------            --------

Gross profit                                                         2,700               3,414
                                                                  --------            --------

Operating expenses:
   Sales and marketing                                               1,747               1,421
   Research and development                                            981                 968
   General and administrative                                        1,639               1,231
                                                                  --------            --------
Total operating expenses                                             4,367               3,620
                                                                  --------            --------

Operating loss                                                      (1,667)               (206)
Interest income (expense), net                                        (101)                 (7)
                                                                  --------            --------

Loss before taxes                                                   (1,768)               (213)

Income tax expense                                                      --                (144)
                                                                  --------            --------

Net loss                                                          $ (1,768)           $   (357)
                                                                  ========            ========

Shares used in the calculation of net loss per share                25,223              23,602
                                                                  ========            ========

Net loss per share of common stock                                $  (0.07)           $  (0.02)
                                                                  ========            ========
</TABLE>

See accompanying Notes to Condensed Consolidated Financial Statements.


                                       3
<PAGE>   4

HIE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

<TABLE>
<CAPTION>
                                                                            Three Months Ended March 31,
                                                                            ----------------------------
                                                                              1999                1998
                                                                            --------            --------
<S>                                                                         <C>                 <C>
Cash flows from operating activities:
 Net loss                                                                   $ (1,768)           $   (357)
 Adjustments to reconcile net loss to net cash used in operating
  activities:
   Depreciation and amortization                                                 582                 526
   Compensation related to stock options, net                                     --                  22
   Increase in trade accounts receivable                                        (485)             (1,197)
   Increase in other current assets                                              (61)               (112)
   Increase in trade accounts payable                                            547                 292
   Increase (decrease) in accrued liabilities                                    618                (434)
   Increase (decrease) in deferred revenue                                       (28)                803
                                                                            --------            --------
     Net cash used in operating activities                                      (595)               (457)
                                                                            --------            --------

Cash flows from investing activities:
 Purchased software                                                              (19)               (137)
 Capitalized software development costs                                         (405)               (252)
 Capital expenditures                                                           (603)                (42)
 Change in other non-current assets and liabilities, net                          (2)                 (8)
                                                                            --------            --------
     Net cash used in investing activities                                    (1,029)               (439)
                                                                            --------            --------

Cash flows from financing activities:
 Principal payments on long-term debt, net                                      (102)             (2,870)
 Net repayments under line of credit                                              --                 (48)
 Proceeds from issuances of common stock                                         537                 241
                                                                            --------            --------
     Net cash provided by (used in) financing activities                         435              (2,677)
                                                                            --------            --------

Net decrease in cash and cash equivalents                                     (1,189)             (3,573)

Cash and cash equivalents at beginning of year                                 3,167               7,777
                                                                            --------            --------

Cash and cash equivalents at end of year                                    $  1,978            $  4,204
                                                                            ========            ========
</TABLE>


See accompanying Notes to Condensed Consolidated Financial Statements.


                                       4
<PAGE>   5

HIE, INC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999 AND 1998
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)


1.       Accounting Policies

         The condensed consolidated financial statements include the accounts
         of HIE, Inc. and subsidiaries (the "Company"). All significant
         intercompany accounts and transactions have been eliminated.

         The information contained in the financial statements is unaudited.
         The statements reflect all adjustments which, in the opinion of
         management, are necessary for a fair statement of the results for the
         interim periods presented.

         All such adjustments are of a normal, recurring nature. The accounting
         policies followed in the presentation of interim financial results are
         the same as those followed on an annual basis. These policies are
         presented in Note 1 to the consolidated financial statements included
         in the Company's Annual Report on Form 10-K for the year ended
         December 31, 1998 filed with the Securities and Exchange Commission.

         Certain prior year amounts have been reclassified to conform to
         current year classifications.

2.       Merger

         On May 12, 1998, the Company completed a stock-for-stock merger (the
         "Merger") with HUBLink, Inc. ("HUBLink") a privately-held integration
         software tool company. In connection with the Merger, the Company
         issued an aggregate of 2,800 shares of its Common Stock. The business
         combination has been accounted for as a pooling of interests and,
         accordingly, the consolidated financial statements for periods prior
         to the Merger have been restated to include the accounts and results
         of operations of HUBLink. In addition, the Company issued 100 shares
         of its Common Stock to a financial advisor, which was engaged by
         HUBLink to assist with possible business combinations.

         The results of operations previously reported by the separate
         enterprises prior to the combination and the combined amounts included
         in the accompanying consolidated condensed financial statements are
         summarized below:

<TABLE>
<CAPTION>
                                                       Three Months
                                                          Ended
                                                      March 31, 1998
                                                      --------------
                                                        (Unaudited)
             <S>                                      <C>
             Revenue:
               HIE                                        $ 4,701
               HUBLink                                        500
                                                          -------
                 Combined revenue                         $ 5,201
                                                          =======

             Net earnings (loss):
               HIE                                        $   352
               HUBLink                                       (709)
                                                          -------
                 Combined net loss                        $  (357)
                                                          =======
</TABLE>

3.       Debt

         In August 1998, the Company entered into a new $5.0 million line of
         credit (the "Credit Facility") with Silicon Valley Bank (the "Bank")
         of which $4.1 million was available for borrowing under the borrowing
         base 

                                       5
<PAGE>   6
HIE, INC AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999 AND 1998
(Unaudited)
(In thousands, except per share data)


         limitation at March 31, 1999. The balance outstanding under the Credit
         Facility was $2.5 million on March 31, 1999. The Credit Facility is
         for a one-year term, with borrowings bearing interest at the bank's
         prime rate plus 1% (8.75% at March 31, 1999). The Company plans to
         maintain the $5.0 million line of credit for unanticipated needs and
         financial flexibility. The Company was in default of two of the line
         of credit financial covenants under the Credit Facility at March 31,
         1999: (1) quarterly profitability; and (2) the minimum Quick Ratio,
         defined therein. The Company and the Bank reached an agreement whereby
         the Bank waived these defaults, the interest rate increased by 0.5%
         annually and the line of credit is secured by the Company's
         intellectual property.

4.       Shareholders' Equity

         On December 31, 1997, HIE issued warrants to purchase 50 shares of HIE
         common stock, at $1.59 per share, and 416 shares of HIE common stock
         to The Southern Venture Fund II, L.P. ("SVFII") (Massey Burch) in
         exchange for 50% equity ownership interest in Criterian Health
         Strategies, Inc. ("CHS"). In January 1999, SVFIT exercised the
         warrants to purchase 42 shares of HIE common stock.

5.       Segment Information

         The Company's reportable segments are strategic business units that
         offer different products and services. During 1998, the Company
         operated in two segments: (i) the licensing of integration software
         products and performance of related integration services ("Software")
         and (ii) the providing of consulting services related to information
         systems integration for healthcare organizations ("Consulting"). Prior
         to 1998, the Consulting business did not separately exist. On December
         31, 1998, the Consulting business was sold (see note 3 of the
         Company's 1998 Annual Report filed on Form 10-K with the Securities
         and Exchange Commission). The Company evaluates performance of the
         segments based on revenues and operating earnings (loss) of the
         segments. Segment information for the three months ended March 31,
         1998 is as follows:


<TABLE>
<CAPTION>
                                                       Three Months
                                                          Ended
                                                      March 31, 1998
                                                      --------------
                                                        (Unaudited)
             <S>                                      <C>
             Revenue:
               Software                                   $ 4,195
               Consulting                                   1,006
                                                          -------
                 Total revenue                            $ 5,201
                                                          =======

             Operating earnings (loss):
               Software                                   $  (353)
               Consulting                                     147
                                                          -------
                 Operating loss                           $  (206)
                                                          =======
</TABLE>



                                       6
<PAGE>   7

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

         This Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities Act")
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). The words "expect," "anticipate," "intend," "plan," "believe,"
"seek," "estimate" and similar expressions are intended to identify such
forward-looking statements; however, this Report also contains other
forward-looking statements in addition to historical information. Actual
results may differ materially from those indicated in the forward-looking
statements; accordingly, there can be no assurance that such indicated results
will be realized. Among the important factors that could cause actual results
to differ materially from those indicated by such forward-looking statements
are the factors set forth in "Item 1. Business -- Factors That May Affect
Future Performance" in the Company's 1998 Annual Report on Form 10-K filed with
the Securities and Exchange Commission(the "Commission"). By making these
forward-looking statements, HIE, Inc. does not undertake to update them in any
manner except as may be required by its disclosure obligations in filings it
makes with the Commission under the Federal securities laws.

RESULTS OF OPERATIONS

The following table sets forth for the periods indicated (1) the Company's
total revenue and (2) unless otherwise indicated, the percentage of total
revenue for each component included in the Company's Condensed Consolidated
Statements of Operations (unaudited):

<TABLE>
<CAPTION>
                                                                                   THREE MONTHS ENDED MARCH 31,
                                                                                  ------------------------------
                                                                                   1999                    1998
                                                                                  -------                -------

<S>                                                                               <C>                    <C>
Total HIE revenue (in thousands)                                                  $ 5,245                $ 5,201
                                                                                  =======                =======

Revenue:
  Software                                                                             19%                    38%
  Services and other                                                                   81%                    62%
                                                                                  -------                -------
Total revenue                                                                         100%                   100%

Cost of revenue:
  Software (as a percentage of software revenue)                                       26%                    11%
  Services and other (as a percentage of services and other revenue)                   54%                    49%
Total cost of revenue                                                                  49%                    34%
                                                                                  -------                -------

Gross profit                                                                           51%                    66%
                                                                                  -------                -------

Operating expenses:
  Sales and marketing                                                                  33%                    27%
  Research and development                                                             19%                    19%
  General and administrative                                                           31%                    24%
                                                                                  -------                -------
Total operating expenses                                                               83%                    70%

Operating loss                                                                        (32)%                   (4)%

Interest income (expense), net                                                         (2)%                   (0)%
                                                                                  -------                -------

Loss before income taxes                                                              (34)%                   (4)%

Income tax expense                                                                      0%                    (3)%
                                                                                  -------                -------

Net loss                                                                              (34)%                   (7)%
                                                                                  =======                =======
</TABLE>



                                       7
<PAGE>   8

COMPARISON OF THREE MONTHS ENDED MARCH 31, 1999 AND 1998

REVENUE. Revenue remained relatively consistent at $5.2 million for the three
months ended March 31, 1999 and 1998. The Company experienced a decrease in
software revenue offset by an increase in services and other revenue.

         Software. Software revenue decreased 50% to $1.0 million for the three
months ended March 31, 1999 from $2.0 million for the three months ended March
31, 1998. As a percentage of total revenue, software revenue decreased to 19%
in the three months ended March 31, 1999 from 38% in the three months ended
March 31, 1998. The dollar decrease in software revenue was attributable to a
decline in the Company's direct sales to distributors during the three months
ended March 31, 1999 compared to the three months ended March 31, 1998. In
addition, the Company did not establish any new distributor relationships and
experienced a decline in direct sales to end-users. The decrease in software
revenue as a percentage of total revenue resulted from the decrease in software
revenue previously discussed and the increase in service revenue discussed
below.

         Services and other. Services and other revenue increased 32% to $4.3
million for the three months ended March 31, 1999 from $3.2 million for the
three months ended March 31, 1998. Services and other revenue as a percentage
of total revenue increased to 81% for the three months ended March 31, 1999
from 62% for the three months ended March 31, 1998. The dollar increase in
services and other revenue was primarily due to an increase in the sale and
completion of projects. The increase in services and other revenue as a
percentage of total revenue resulted primarily from the decrease in software
revenue.

COST OF REVENUE. Total cost of revenue increased 42% to $2.5 million for the
three months ended March 31, 1999 from $1.8 million for the three months ended
March 31, 1998.

         Software. Cost of software revenue increased 13% to $251,000 for the
three months ended March 31, 1999 from $222,000 for the three months ended
March 31, 1998. As a percentage of software revenue, cost of software revenue
increased to 26% for the three months ended March 31, 1999 from 11% for the
three months ended March 31, 1998. Cost of software remained relatively flat
due to the amortization of capitalized software and purchased software. The
increase in cost of software as a percentage of software revenue was a result
of decreased software sales during the three months ended March 31, 1999
compared to March 31, 1998 previously discussed.

         Services and other. Cost of services and other revenue increased 47%
to $2.3 million for the three months ended March 31, 1999 from $1.6 million for
the three months ended March 31, 1998. As a percentage of services and other
revenue, cost of services and other revenue increased to 54% for the three
months ended March 31, 1999 from 49% for the three months ended March 31, 1998.
The dollar increase in cost of services and other revenue was attributable to
an increase in personnel needed to complete service projects. The increase in
cost of services and other revenue as a percentage of services and other
revenue was primarily attributable to an increase in service personnel and the
related startup time to train and educate new staff.

OPERATING EXPENSES:

         Sales and marketing. Sales and marketing expenses increased 23% to
$1.7 million for the three months ended March 31, 1999 from $1.4 million for
the three months ended March 31, 1998. Sales and marketing expense as a
percentage of total revenue increased to 33% for the three months ended March
31, 1999 from 27% for the three months ended March 31, 1998. The dollar
increase in sales and marketing was primarily due to addition of sales
personnel to market solutions developed for new vertical markets other than the
healthcare market. The increase in sales and marketing expenses as a percentage
of total revenue was primarily attributable to a decrease in software sales for
the three months ended March 31, 1999.

         Research and development. Research and development expenses remained
relatively consistent at $1.0 million for the three months ended March 31, 1999
and 1998. Research and development expenses as a percentage of total revenue
was 19% for the three months ended March 31, 1999 and 1998. Research and
development increased due to an increase in development costs for solutions in
vertical markets other than the healthcare market.


                                       8
<PAGE>   9

This increase was partially offset by an increase in capitalization of costs
related to internally developed software costs of $405 for the three months
ended March 31, 1999 from $252 for the three months ended March 31, 1998.

         General and administrative. General and administrative expenses
increased 33% to $1.6 million for the three months ended March 31, 1999 from
$1.2 million for the three months ended March 31, 1998. General and
administrative expenses as a percentage of revenue increased to 31% for the
three months ended March 31, 1999 from 24% for the three months ended March 31,
1998. The dollar increase in general and administrative expenses was primarily
due to increased human resources and facility costs related to staffing
increases. The increase in general and administrative expenses as a percentage
of total revenue was primarily due to the decrease in software sales for the
three months ended March 31, 1999.

INTEREST INCOME (EXPENSE), NET. Net interest expense increased $94,000 to
$101,000 for the three months ended March 31, 1999 from $7,000 for the three
months ended March 31, 1998. The increase in interest expense resulted from
lower cash balances during the three months ended March 31, 1999.

INCOME TAX (EXPENSE) BENEFIT. The Company did not record any income tax benefit
for the three months ended March 31, 1999.


LIQUIDITY AND CAPITAL RESOURCES

         The Company had working capital of $5.6 million at March 31, 1999
compared to $7.4 million at December 31, 1998. The working capital decrease was
primarily attributable to operating losses, purchases of computer equipment and
furniture and investment in internally developed software during the three
months ended March 31, 1999.

         Net cash used in operating activities totaled $595,000 for the three
months ended March 31, 1999 compared to net cash used of $457,000 for the three
months ended March 31, 1998. The cash used in operating activities was
primarily a result of operating losses and an increase in accounts receivable
partially offset by increases in accounts payable and accrued expenses.

         Net cash used in investing activities was $1.0 million for the three
months ended March 31, 1999 compared to net cash used in investing activities
of $439,000 for the three months ended March 31, 1998. This increase of $590
was due to expenditures for computer equipment and furniture due to increased
client services personnel.

         Net cash provided by financing activities was $435,000 for the three
months ended March 31, 1999 compared to net cash used in financing activities
of $2.7 million for the three months ended March 31, 1998. Net cash provided by
financing activities resulted from exercises of stock options and warrants
during the three months ended March 31, 1999. The variance from the three
months ended March 31, 1998 was due to principal payments of long-term debt of
$2.9 million during the three months ended March 31, 1998.

         In August 1998, the Company entered into a $5.0 million line of credit
(the "Credit Facility") with Silicon Valley Bank (the "Bank"). The Company was
in default of two of the line of credit financial covenants under the Credit
Facility at March 31, 1999: (1) quarterly profitability; and (2) the minimum
Quick Ratio, defined therein. The Company and the Bank reached an agreement
whereby the Bank waived these defaults, the interest rate increased by 0.5%
annually and the line of credit is secured by the Company's intellectual
property.

         Based on the Company's business plan and business model projections,
the Company believes that currently available cash, anticipated cash flow from
operating activities, especially the collection of accounts receivable, and
cash available from the line of credit mentioned above will be sufficient to
meet the Company's capital requirements for at least the next twelve months and
for the foreseeable future.


                                       9
<PAGE>   10

YEAR 2000

         The Year 2000 issue refers generally to the data structure and
processing problem that may prevent systems from properly processing
date-sensitive information when the year changes to 2000. The Year 2000 issue
affects IT systems, such as computer programs and various types of electronic
equipment that process date information by using only two digits rather than
four digits to define the applicable year, and thus may recognize a date using
"00" as the year 1900 rather than the year 2000. The issue also affects some
non-IT systems, such as devices which rely on a microcontroller to process date
information. The Year 2000 issue could disrupt a company's operations by
generating erroneous data or causing system failures or miscalculations.

State of Readiness

         HIE has formed a Year 2000 task force which is systematically
evaluating its systems, products and key external relationships to ascertain
material Year 2000 issues and solutions. HIE's Year 2000 readiness program has
two phases: (1) assessment and (2) remediation (including modification,
upgrading, replacement and validation by third parties). HIE's Year 2000
readiness program is an ongoing process involving continual evaluation and may
be subject to change in response to new developments.

         HIE's products and services. HIE is in the process of assessing the
Year 2000 readiness of all products available currently or previously sold to
customers and distributors. HIE expects this assessment to be complete in
mid-1999.

         Although HIE does not generally warrant the Year 2000 readiness of its
products, it has disclosed to its customers and distributors that its products
are "Year 2000 ready." HIE has defined "Year 2000 ready" as the ability for a
product component to initialize and operate normally on and after January 1,
2000; and, where applicable, the ability to correctly manipulate, display,
store and exchange with other components of its system all dates, either prior,
during, or after January 1, 2000. However, HIE's products are configurable and
programmable by end users, and Year 2000 problems relating to re-configurations
and programming extensions to HIE's base product generated by an end user
cannot be anticipated by HIE.

         HIE also markets its products and services as a solution for
addressing the Year 2000 problem. As part of its Year 2000 risk assessment
services, HIE executes an application that browses all Cloverleaf site
configuration files and provides a listing of the date fields that are at risk
and where the fields are integrated within the Cloverleaf system. After
executing its Year 2000 risk assessment application, HIE provides the customer
with a written report describing the location of these at risk fields and the
application interface that is affected.

         HIE attempts to limit by contract, both with its customers and with
the parties that license technology to HIE, its liability for damages arising
in rendering its products and services. Despite this precaution, there can be
no assurance that the limitations of liabilities set forth in its contracts
would be enforceable or would otherwise protect HIE from liability for damages.
In addition, HIE's products are generally integrated into enterprise systems
involving sophisticated hardware and complex software products that HIE cannot
adequately evaluate for Year 2000 problems. HIE may face claims based on Year
2000 problems in other companies' products, or issues arising from the
integration of multiple products within an overall system.

         Internal IT and non-IT systems. HIE is in the process of implementing
new software for its accounting, internal network and timekeeping functions in
order to consolidate various systems under its new strategic direction and
integrate HUBLink's operations. Representations made by software vendors for
these new systems, including Year 2000 readiness, will be validated at the
completion of that implementation, which is expected to be mid 1999. Non-IT
systems, such as telecommunications systems, as well as existing IT systems
have been assessed and are currently in remediation.

         Other third parties. HIE has surveyed with a questionnaire material
vendors and suppliers of systems used by HIE for internal IT and research and
development in order to determine the extent to which HIE is vulnerable to


                                      10
<PAGE>   11

any failure by such material third parties to remediate their respective Year
2000 problems and resolve such problems to the extent practicable. HIE expects
the assessment to be complete in mid 1999 and will take the necessary
remediation action, including changing to vendors who are Year 2000 compliant
or installing internal IT systems, to minimize the Year 2000 non-compliance
risk with respect to third parties. HIE has not conducted a Year 2000 survey of
the distributors and financial institutions with whom it has material
relationships.

Year 2000 Costs and Contingency Plans

         To date, HIE has not incurred any material costs directly associated
with its Year 2000 readiness efforts nor accelerated the replacement of any
system due to Year 2000 issues. HIE does not anticipate that it will incur
either significant operating expenses or significant capital expenditures to
address Year 2000 issues with respect to its internal systems and the software
products and services that it markets.

         In view of HIE's Year 2000 assessment and remediation efforts to date,
and the limited activities that remain to be completed, HIE's contingency plans
consist of plans to re-route phone calls, manual accounting and restoring
working systems with backup files. HIE is in the final stages of development of
these contingency plans, which are expected to be completed by mid-1999.

Risks of Year 2000 Issues

         In light of its compliance efforts, HIE does not believe that the Year
2000 issue will materially adversely affect operations or results of
operations, and does not expect implementation to have a material impact on
HIE's consolidated financial statements. However, there can be no assurance
that HIE's systems will be Year 2000 compliant prior to December 31, 1999, or
that the failure of any such system will not have a material adverse effect on
HIE's business, results of operations and financial condition. In addition, to
the extent the Year 2000 problem has a material adverse effect on business,
operations or financial condition of third parties with whom HIE has material
relationships, such as customers, distributors, vendors, suppliers and
financial institutions, the Year 2000 problem could have a material adverse
effect on HIE's business, results of operations and financial condition.

         Although HIE has not been a party to any litigation or arbitration
proceeding involving its products or services related to Year 2000 issues, HIE
may in the future be required to defend its products or services in such
proceedings or to negotiate resolutions of claims based on Year 2000 issues.
The costs of defending and resolving Year 2000-related disputes, regardless of
the merits of such disputes, and any liability HIE may have for Year
2000-related damages, including consequential damages, could materially
adversely affect its business, results of operations and financial condition.
There also can be no assurance that HIE will be able to obtain or maintain
insurance coverage for such liabilities, that such coverage will continue to be
available on acceptable terms, or that such coverage will be available in
amounts to cover one or more large claims. The assertion of claims against HIE
that exceed available insurance coverage or changes in HIE's insurance
policies, including premium increases or the imposition of large deductible or
co-insurance requirements, could have a material adverse effect on HIE's
business, financial condition and results of operations.

         The above Year 2000 discussion contains forward-looking statements
reflecting management's current assessment and estimates with respect to HIE's
Year 2000 readiness efforts and the impact of Year 2000 issues on HIE's
business, financial condition and results of operations. Various factors, many
of which are beyond the control of HIE, could cause actual plans and results to
differ materially from those contemplated by such assessments, estimates and
forward-looking statements. Some of these factors include, but are not limited
to, the accuracy of the Year 2000 assurances, disclosures or representations by
HIE's customers, distributors, vendors, suppliers, financial institutions and
other third parties with whom it has material relationships, availability of
qualified personnel and other IT resources and any actions of third parties
with respect to Year 2000 problems.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

         The Company currently maintains all cash in United States dollars in
highly liquid, interest-bearing, investment-grade instruments with maturities
of less than three months, which the Company considers cash 


                                      11
<PAGE>   12

equivalents; therefore the Company has no "market risk sensitive investments,"
and no disclosure is required under this Item.


                                      12
<PAGE>   13

                          PART II - OTHER INFORMATION

Item 1.  Legal Proceedings

         None

Item 2.  Changes in Securities and Use of Proceeds.

         On December 18, 1996, the Company issued a warrant to purchase up to
         50,000 shares of the Company's common stock to The Southern Venture
         Fund II, L.P. ("SVFII") (Massey Burch). On December 31, 1997, the
         Company amended and restated this warrant (as so amended and restated,
         the "Warrant") to change the per share exercise price from $4.5625 to
         the average of the closing prices of the Common Stock as quoted on the
         Nasdaq National Market for the five trading days prior to December 31,
         1997, or approximately $1.59. In January 1999, SVFII exercised the
         Warrant in full through a cashless exercise. As a result, the Company
         issued 41,598 shares of its common stock to SVFII. The issuance of
         shares of HIE common stock upon exercise of the Warrant was exempt
         from registration under Section 4(2) of the Securities Act as a
         transaction not involving a public offering. In addition, the SVFII
         was sophisticated and had access to information about the Company.

Item 3.  Defaults Upon Senior Securities.

         The Company was in default of two of the line of credit financial
         covenants under the Credit Facility at March 31, 1999: (1) quarterly
         profitability; and (2) the minimum Quick Ratio, defined therein. The
         Company and the Bank reached an agreement whereby the Bank waived
         these defaults, the interest rate increased by 0.5% annually and the
         line of credit is secured by the Company's intellectual property.

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

         None

Item 5.  Other Information

         None

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

         (a)  Exhibits

<TABLE>
<CAPTION>
              Exhibit No.           Description
              -----------           -----------

              <S>                   <C>
               3                    By-laws of HIE, Inc.

              11                    Statements of Computation of Per Share Loss.

              27                    Financial Data Schedule (for SEC use only).
</TABLE>

(b)      Reports on Form 8-K

         During the quarter ended March 31, 1999 the Company did not file any
reports on Form 8-K.


                                      13
<PAGE>   14

                                   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.

                      HIE, Inc.

May 14, 1999          By:  /s/ Joseph A. Blankenship          
                         ----------------------------------------
                          Joseph A. Blankenship
                          Vice  President - Controller, Chief Accounting 
                          Officer, Assistant  Treasurer and Assistant Secretary
                          (duly authorized officer and principal accounting
                          officer)


                                      14
<PAGE>   15

EXHIBIT INDEX

<TABLE>
<CAPTION>
               Exhibit No.          Description
               -----------          -----------

               <S>                  <C>
                3                   By-laws of HIE, Inc.

               11                   Statements of Computation of Per Share Loss.

               27                   Financial Data Schedule (for SEC use only).
</TABLE>



                                      15