SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

|X|  ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

                    For the fiscal year ended April 30, 2001

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

                  For the transition period from _____ to _____

                           Commission File No. 0-21359

                     INDUSTRI-MATEMATIK INTERNATIONAL CORP.
             (Exact name of registrant as specified in its charter)

           DELAWARE                                      51-0374596
(State of or other jurisdiction                       (I.R.S. Employer
of incorporation or organization)                    Identification No.)

                               901 Market Street
                                   Suite 475
                              Wilmington, DE 19801

                   (Address of principal executive offices)

Registrant's telephone number, including area code: 302-777-1608
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:

                          Common Stock, $.01 par value
                                (Title of class)

      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 [ ]

      Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in the definitive proxy or
information statement incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]

    The aggregate market value of the voting stock held by non-affiliates of
the registrant on July 26, 2001, was approximately $17,700,000.

    At July 26, 2001, 32,298,073 shares of the registrant's Common Stock,
$.01 par value, were outstanding.



                       DOCUMENTS INCORPORATED BY REFERENCE

      The registrant incorporates by reference in Part III of this Report
specified portions of its definitive Proxy Statement to be filed with the
Securities and Exchange Commission in connection with its 2001 Annual Meeting
of Shareholders ("2001 Proxy Statement").




This Report contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, as amended ("Securities Act"), and Section
21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), that
involve certain risks and uncertainties. Discussions containing such forward-
looking statements may be found in the material set forth below as well as in
this report generally, including the documents incorporated in this Report by
reference. Without limiting the foregoing, the words "believes,"
anticipates," "plans," "expects," and similar expressions are intended to
identify forward-looking statements. The Company's actual results could
differ materially from those anticipated in such forward-looking statements
as a result of certain factors, including those appearing elsewhere in this
Report and in the documents incorporated in this Report by reference. These
forward-looking statements are made as of the date of this Report and the
Company assumes no obligation to update such forward-looking statements or to
update the reasons why actual results could differ materially from those
anticipated in such forward-looking statements.

                                     PART I
ITEM 1. BUSINESS

INDUSTRI-MATEMATIK INTERNATIONAL CORP. ("IMI" or "Company"), was incorporated
in the State of Delaware in 1995 and conducts its business through domestic
and international subsidiaries. The Company's business was founded in 1967 by
incorporation in Sweden as Industri-Matematik AB ("IMAB"). In May 1995, the
then stockholders of IMAB exchanged all of their IMAB shares for shares of
the Company's capital stock and IMAB became a wholly-owned subsidiary of the
Company. Pursuant to a Prospectus dated September 25, 1996, 5,060,000 shares
of the Company's Common Stock were sold to the public in an initial public
offering and the Company's Common Stock began trading on the Nasdaq National
Market under the symbol "IMIC". During fiscal 1998, pursuant to a Prospectus
dated October 31, 1997, the Company completed a secondary public offering of
8,136,250 shares of Common Stock.

IMI develops, markets, and supports client/server and internet based
application software that enables manufacturers, distributors, wholesalers,
retailers, logistics service providers and e-businesses to more effectively
manage their supply chains and their customer relationships.  Supply chain
management encompasses the execution of multiple customer-focused order
fulfillment processes, including order management, pricing and promotion,
handling, sourcing, warehouse management, transportation management, service
management, and replenishment planning and coordination. These processes are
made more efficient and effective through collaboration with vendors,
customers, and service providers, and, based upon this collaboration IMI's
software product monitors and manages events beyond the physical limitations
of the enterprise.  CRM encompasses the development and management of
customer relationships through the processes of marketing and selling, and
capturing, processing, fulfilling, and servicing customer orders.  It
includes activities such as marketing campaign management and analysis, sales
force automation, call center management, customer maintenance and service,
and customer retention and support.

The Company's suite of software products, marketed as VIVALDI(TM), is
designed to meet the complex fulfillment and customer service needs of
distribution-intensive businesses.  VIVALDI products allow customers to
leverage the value of their existing enterprise systems by integrating with
legacy, new client/server, and new internet based manufacturing, advanced
planning, and financial management systems.  VIVALDI products provide an
easy-to-install, quickly implemented fulfillment and customer service
backbone enabling additional functionality and capabilities as the business
grows.

Representative customers of IMI include Albert Heijn, AT&T Pre-Paid Phone
Cards, Brunswick Corporation - Mercury Marine, CoShopper.com, Canadian Tire
Corporation, Ericsson, FedEx Corp., Hakon, J.R. Hillebrand, The Kellogg
Company, Kramp Groep, SCO Unix, Shenker-BTL, Sherwin-Williams Company,
Smuckers, Spray AB, Starbucks Corporation, Telia AB, TNT, Volvo Action
Services, and West Farm Foods.

INDUSTRY BACKGROUND

The current or "new" economy has fundamentally changed the way companies
compete by forcing them to shift their business models from the traditional
Buy/Hold/Sell model where they buy or make materials or finished goods and
hold them in inventory while they try to sell them.  The trend today is
towards a more dynamic and fluid model where companies first sell a product,
source or build it based on the customer's needs, and then ship it to the
customer.  Pure e-businesses are the best example of this new model, but
traditional, distribution-intensive manufacturers, wholesalers, and retailers
are being forced to adapt their business processes to compete.

Advanced fulfillment and customer service software applications are helping
companies accelerate this shift by enabling them to anticipate shifts in
customer demand earlier and respond more quickly by reducing cycle time and
moving product through their supply chains at a more rapid pace freeing up
working capital invested in inventory for other parts of the business.
Today, companies are competing based on their supply chains instead of
competing with product.  As a result, there is an increasing demand for
advanced supply chain management software solutions that can meet the
rigorous demands of the new economy by providing real-time information to
companies about their customers, their supply chains, and their business and
operational performance.

In this new environment, the Internet provides customers with immediate and
constant access.  This means the ability to place an order at anytime, from
anywhere, for anything.  Continuous ordering - 24 hours per day, 7 days per
week, 365 days per year ("24/7/365") - is increasing the order volumes,
velocity, and complexity that companies must handle.  As a result, many
companies need fulfillment solutions that can handle much higher transaction
volumes and more complex logistics to satisfy customers.

To meet these needs, enterprises are extending their supply chain
capabilities by enabling collaboration with trading partners, such as
customers, vendors, and services providers.  This collaborative environment
enables more efficient and effective control and visibility  for all of the
processes necessary for supply chain management.

Another area that is taking on critical importance in collaborative supply
chains is customer relationship management ("CRM").  With increased access to
information comes an increased need for around the clock customer service.
Call centers need to be available at any time to answer questions, configure
orders, and provide service. By integrating customer relationship
capabilities with advanced supply chain solutions, companies can manage
customers throughout their entire relationship - from the time they acquire
them, to the time they fulfill their orders, to the time they service them.
As a result, companies will be able to capture, access, and leverage critical
customer information about marketing, order fulfillment, product preference,
and service requirements.  This is high-value information as companies
strategize on how to increase customer retention, target new product
offerings, and differentiate customers by revenue and profit potential.

For web-based businesses, fulfillment and customer service are the keys to
customer retention and profitability.  To date, most web-based businesses
have focused the majority of their efforts on attracting new visitors and
providing an appealing shopping experience on-line.  Thus far, this has not
led to profitability as even the largest web-based businesses have failed to
handle the difficult task of fulfilling their customer commitments in a way
that is satisfactory to the customer and profitable to the company.

STRATEGY

IMI's objective is to be a leading supplier of advanced supply chain software
solutions to markets with complex, high-performance supply chain
requirements.  To accomplish this, IMI configures industry-specific solutions
to meet the specific requirements of different supply chain environments.

IMI serves three principal categories of customers with supply chain software
products:

     1.   Large, distribution-intensive companies in wholesale, retail, and
          consumer goods manufacturing with complex supply chain requirements
          that need enterprise-wide software solutions.

     2.   Web-based businesses selling goods and services over the
          Internet that need fulfillment and customer service solutions.

     3.   Logistics service providers who manage supply chain processes for
          their clients.

The Company serves these three types of customers from a common product
platform.  While IMI approaches each market with some common strategies, each
also has its own unique elements.

Industry-Specific Solution Sets.

The Company has focused its marketing, sales, and product development efforts
in enterprise applications in specific target markets, particularly the
consumer packaged goods market and the high-volume wholesale distribution
industry.  Two years ago, the Company set out to establish a presence in
other vertical markets characterized by a need for highly flexible order
fulfillment solutions that can support complex logistics and high transaction
volumes.  These new segments include large consumer durable goods
manufacturers and retailers

Expanded Usage within Existing Customer Base.

The Company's traditional enterprise customers are large, multinational
businesses that initially have licensed Company software for use within one
or more specific divisions.  IMI believes that a significant opportunity
exists within its established customer base to expand usage of its software
by licensing new sites and additional users as well as licensing its new
applications like warehouse management, store replenishment, and CRM.

Enhanced Core Product Functionality.

The Company will continue to focus its product development resources on the
development and enhancement of advanced supply chain management software
solutions.  IMI has over 25 years of experience in developing logistics
management software, and the Company intends to continue to increase product
functionality through both in-house development and selected acquisitions.
IMI currently is funding development efforts to increase order volume
throughput, enhance and expand Internet and Intranet applications, enable
collaborative supply chain management, and extend its use of object-oriented
technology.

Integration with Complementary Products.

The Company believes that the ability to offer a software product that can
integrate seamlessly with selected third party components to provide a
comprehensive solution tailored for a particular vertical market is a key
competitive advantage.  The Company intends to continue to integrate its
solutions with complementary planning, manufacturing, finance, and decision
support systems developed by others.  Global Partner agreements have been
signed to that effect with IBM, Business Objects S.A., Viewlocity, Taxware
International, Inc., and Jetform Corporation as well as regional agreements
with additional software partners and hardware partners such as Ericsson and
Symbol Technologies. The Company will also continue to develop capabilities
designed to open its application environment to accepted standards for
messaging and integration.  Consistent with that effort, the Company has
determined that it will subscribe to the Open Applications Group (OAG)
standards and practices.

IMI's solution is a fulfillment and service transaction backbone for web-
based businesses rather than a front-end shopping experience.  As such, it is
designed to integrate easily with most web front-end storefront solutions.

Partnerships to Leverage Third Party Strengths.

In addition to its direct sales and support organizations, the Company has
and intends to continue to establish partnerships with third parties to
assist the Company in developing customer relationships and in customizing
and implementing its solutions. In connection with specific implementations,
the Company has partnered with Accenture (f/k/a Andersen Consulting, LLC),
Computer Sciences Corporation, IBM, and MCI Systemhouse in the United States,
and Cap Gemini, ECsoft Group, and Plus Integration in Europe.  The Company
intends to rely more on partners like these for implementation services to
accelerate customer development activities.

IMI PRODUCTS and SERVICES

Overview

     IMI's software enables large manufacturers, distributors, wholesalers,
logistics service providers, and retailers to fulfill and service their
customers' orders faster and more efficiently.  The Company believes that e-
commerce is fundamentally changing the ways companies compete and that
fulfillment and customer service will be the two most critical elements for
supply chain excellence and competitiveness going forward.

IMI's VIVALDI Suite of software addresses these high-performance challenges
by combining and integrating best-of-class capabilities in Advanced Order
Management, Supply Chain Execution, and Customer Relationship Management.
The components in the VIVALDI Suite are specifically designed to manage
complex, multi channel, high-volume supply chains that require collaborative
execution capabilities.  These environments demand customer responsiveness.

One of the most expensive and time consuming systems challenges businesses
face is building a custom order management system into their web front end in
order to provide customers with information on the availability of products
and services, order status, pricing, and ship date.  Once they build them,
they are often difficult to maintain and impossible to scale with increasing
order volumes.  Another challenge businesses face is integrating their web
front end with their customer contact centers to enable call center agents to
be truly knowledgeable about their customers and provide the most responsive
customer service possible.  This new channel of sales and distribution must
also be integrated with the existing enterprise systems to allow for a
seamless customer interface.

IMI's solutions solves these problems by providing a pre-configured, pre-
integrated contact center and fulfillment solution that can be seamlessly and
tightly integrated to almost any web front end and leverages the best-of-
class capabilities of IMI's enterprise business solution applications.  The
software is designed for very fast implementation and to scale for future
growth and is built to handle very high volumes and complex logistics.  The
Company believes it is the first to offer such a package.  At a practical
level, VIVALDI replaces inventory with information.  This helps companies
reduce inventories while at the same time delivering products more quickly
and efficiently while improving customer service.  Some of VIVALDI's advanced
capabilities include:

Full-Circle Customer Management. VIVALDI enables companies to capture
information throughout the customer's lifecycle so that they can segment and
differentiate between customers, create profiles that identify how to best
service and support them, identify opportunities to sell additional products
and services, and provide visibility into all customer interactions and
activities.

Fulfillment Coordination. VIVALDI increases the velocity and efficiency of a
company's supply chain by coordinating, monitoring, and measuring the
physical movement of goods both inside and outside of the organization.
Through the use of intelligent messaging and alert capabilities, VIVALDI can
identify events that impact a company's ability to execute and deliver the
product to the customer on time.  This allows trading partners to coordinate
their plans and schedules across inter-enterprise supply chains and measure
and analyze the performance of vendors, products, and processes throughout
complex Global Logistics.  VIVALDI's advanced logistics engine allows complex
orders to be captured and fulfilled seamlessly by treating each line of an
order independently.  This "order line independence" allows a customer order
to be serviced automatically by any number of sales organizations, from any
number of dispersed inventory locations, and for any number of customer
destinations.  Moreover, this capability allows the individual order lines in
a customer order to be fulfilled simultaneously or sequentially.  With
VIVALDI, a customer can place a single order that mixes supply modes,
shipping dates and destinations, pricing structures, discount schedules,
special promotions, and terms of payment.  In addition, VIVALDI enables
companies to automate the order fulfillment process, reduce order cycle time
and administrative costs, and present information in a form which is
optimized for detailed measurement and planning.

High-Volumes. VIVALDI is built on an architecture that provides for extremely
reliable and scalable transaction handling.  VIVALDI enables 24/7/365
computing and handles two to three times the transaction volume of any other
packaged application.

Integration with Complementary Products and Technologies.  VIVALDI is
designed specifically to maximize the value of existing and new complementary
systems performing manufacturing, finance, or decision support functions as
well as to integrate with EDI systems and web storefronts to facilitate
electronic commerce with customers and suppliers.  The software's design also
allows customers the freedom to choose the most functional and advanced
component applications for creating complete, robust enterprise business
systems.

Multi-Channel Distribution. Unlike other applications such as ERP sales and
distribution systems, VIVALDI can accommodate orders from multiple channels
through the same order transaction system.  This capability simplifies
fulfillment, service, and invoicing for both the customer and the supplier
while reducing the cost and complexity of connecting and operating additional
systems.  This function is particularly important as traditional brick and
mortar companies add e-business channels.

Timely Implementation. IMI has designed its solutions to enable customers to
configure and implement the software on a timely basis, thereby reducing
costs and speeding the customer's return on investment.  Implementation
assistance is provided for customers through the Company's service
organization and from leading systems integrators.

Enterprise Applications

In 1999, the Company began marketing its products as VIVALDI, a suite of
global fulfillment and customer service applications for e-commerce and
supply chain management.  VIVALDI is a combination of the Company's former
product, System ESS(R), an advanced order management and supply chain
execution application, together with warehouse management and demand
replenishment capabilities and customer relationship management solutions.
More recently the Company has added a retail store replenishment capability,
extended supply chain event management capabilities, and portal technology.

VIVALDI is a suite of open applications that provide capabilities for
managing and executing global fulfillment and customer service processes in
an inter-enterprise supply chain environment. These processes include
marketing and sales campaign management, order capture and fulfillment,
distribution management, warehouse management, demand replenishment, price
and promotion management, global organization management, electronic
commerce, call center management, customer service, supply chain event
management and decision support.

VIVALDI can currently operate on UNIX server platforms from Hewlett-Packard
Corporation, IBM, Digital Equipment Corporation, Sun Microsystems
Corporation, as well as on Windows NT server platforms.  VIVALDI provides an
object-oriented architecture, supports Internet-based electronic commerce and
currently supports 13 languages. VIVALDI supports Microsoft Windows and Web
and Java-based clients.  VIVALDI makes full use of relational database
technology, storing each field in its own column, using descriptive column
names and identifying primary key/foreign key relations.  Since VIVALDI makes
use of relational database technology, additional third party tools and
complementary applications are easily integrated with it. In general,
relatively little modification to, or customization of, the standard VIVALDI
software is required in order for the software to meet the basic
functionality requirements of individual customers.

The VIVALDI Suite is divided into four basic areas - each with a separate set
of components.

VIVALDI Advanced Order Management ("AOM")

VIVALDI AOM improves the flexibility, responsiveness, and speed of order
processing and fulfillment operations.  It has the ability to define and
support a global fulfillment and customer service organization that covers
multiple countries, legal entities, currencies, suppliers, and customers to
ensure that businesses can distribute products from any location and support
local business practices across international borders.  Each customer demand
is handled smoothly and with minimal intervention to ensure a quick,
efficient outcome for the business and its customers. AOM's proven high-
volume engine coordinates and monitors the progress of orders and material
through the most complex supply chains ensuring maximum flexibility,
streamlined operations, and speed.  These capabilities allow an enterprise to
operate in a multi-channel environment, realize optimal operational
efficiencies, and maximize customer service.

Recently added capabilities allow the VIVALDI software to automatically
prioritize information and customers for customer service professionals using
intelligent and dynamic information filtering. This allows for more
responsive customer visibility and service based on customer preferences and
history and creates opportunities for targeted cross-selling and up-selling.

VIVALDI SUPPLY CHAIN EXECUTION ("SCE")

VIVALDI SCE enables companies to improve the flexibility, responsiveness, and
speed of their supply chain operations. SCE coordinates, manages, and
monitors the progress of orders and material through the supply chain to
ensure maximum flexibility, efficiency, and speed.

SCE includes point applications with significant scalability, flexibility,
and functionality.  The applications are built for stand-alone use as well as
for integration with VIVALDI AOM and most ERP and legacy systems.  SCE
includes components that manage end-to-end replenishment processes, as well
as high speed fulfillment centers for warehouse operations and return
processing.

VIVALDI NET SERIES

VIVALDI NET SERIES is a recently developed product offering which delivers
the capabilities for supply chain event management ("SCEM").  In today's
world of inter-enterprise supply chains, there is the need for visibility and
control of all movement and activities effecting the entities and
participants in the supply chain.  SCEM provides enterprises with the ability
to monitor and  control all activities, as they occur, in the extended supply
chain.  This collaborative ability enables companies to develop supply chain
processes and practices which maximize the potential for implementing world
class supply chain best practices.

The initial SCEM components have been developed in a joint project with an
IMI customer.  The continued development of the full solution set will be
completed and brought to market through a series of joint development efforts
with market leading customer/partners.

VIVALDI CUSTOMER RELATIONSHIP MANAGEMENT ("CRM")

The more channels companies have, the more fragmented their view of the
customer is likely to be.  Each channel works with its own discrete knowledge
of the customer based on its own databases or files.  The key for a company
to really know its customers is collecting and sharing all its customer
knowledge across the organization.  That requires a single view of the
customer across all of a company's business processes.

VIVALDI CRM gives organizations that single view, and along with it, the
ability to manage customers from the time they are targeted and acquired,
through fulfillment, and onto service and support.  Marketing, sales,
logistics, and supply chain processes are integrated through common data
environments that support information sharing.  VIVALDI CRM also utilizes the
latest Internet and wireless technologies.  With all these capabilities,
companies can manage their customer relationships more responsively and
efficiently.  VIVALDI CRM marries the functionality of a world class CRM
application with the deep domain expertise in logistics and distribution that
IMI has demonstrated for the past 25 years.

VIVALDI CRM delivers functionality to enable companies to deliver marketing
and sales force automation, and improves customer interaction via world class
contact center capabilities.

Pricing

     The license fees for VIVALDI have been determined based on specific
components, number of servers, number of defined users, and the projected
number of order lines to be processed per year in the customer's system.

Software Tools

     The Company supports its products with a range of software tools
developed by the Company or by third parties. These tools are used by the
Company to develop, deliver, and maintain the software and by the Company's
customers to implement, develop extensions to, and support the software.

     TRIM. TRIM is a 4GL application development tool that is optimized for
applications involving large transaction volumes and large numbers of
concurrent users. TRIM is licensed to the Company from Trifox, Inc. and was
used by the Company to develop System ESS and VIVALDI.  TRIM also is sold as
an application development tool to customers requiring the ability to develop
custom applications.

     SDCM. SDCM, the Software Development and Configuration Manager tool,
allows the Company to develop, deliver, and maintain VIVALDI.  SDCM also
allows customers to develop customized functionality in a multi-user
environment, control the modification of programs, documentation, and
databases, as well as manage data security and system integrity in the
implementation of its software.

     Express Gateways. Express Gateways allow customers to integrate the
software with other management information systems, such as financial
reporting and manufacturing resource-planning systems.

     Business Engineering Workbench. This is a Windows client-based tool
focused on enhancing the implementation process. This tool consists of two
components:  Navigation Express and Implementation Express. Navigation
Express provides a comprehensive review of the key software business
concepts, routine flows, and implementation codes and parameters.
Implementation Express utilizes an upper case facility to document
graphically all software business processes, routines, and functions. These
graphical views of the software data model provide IMI customers with tools
for mapping current and future business processes against the software
business flows.

CUSTOMER SERVICE AND SUPPORT

The Company believes that providing a high level of customer service and
technical support is essential to customer satisfaction and timely
implementation of its software applications.  As of April 30, 2001, IMI had
298 employees worldwide in its services and maintenance organization
providing software maintenance and support, training, and consulting
services.

IMI provides the following services and support to its customers:

VIVALDI VALUE IMPROVEMENT PROCESS ("VIP")

VIVALDI VIP enables companies to quantify the bottom line impact the software
can have on an organization and target an implementation strategy to deliver
and measure that value efficiently.

There are three steps in the process:

     Value Improvement Analysis ("VIA") - a tool that provides a structured
way to identify and quantify the highest potential area for increased
profitability and customer satisfaction within a company.

     Value Focused Implementation - a methodology which uses the VIA analysis
to target those areas in the supply chain which will provide the biggest and
fastest time-to-benefit for the business.  This focuses the implementation
plan and provides important visibility about the benefits to be realized by
the company.

     Value Improvement Review - IMI's software solutions provide
comprehensive and detailed data that enable companies to review their
progress against their business value goals. Special focus is placed on
economic value added as well as performance scorecards relating to customers,
suppliers, products, warehouses, and distribution channels.

Implementation and Technical Services.  Customers have the option of
purchasing implementation services for VIVALDI from IMI or third-party
providers.  Implementation services typically involve assistance with the
integration of the software with other software applications and databases
used by the customer.  Such software applications and databases will vary
from customer to customer, but often include legacy management, support,
logistics, or ERP applications.  The integration of the software with a
customer's existing applications allows the customer to utilize the
application more efficiently by linking data flows between the IMI software
and various existing applications.  Such integration is not, however, a
prerequisite to the basic functionality of the IMI software.  Product
extensions are developed using the same software tools used in VIVALDI and
state of the art software configuration management tools document all of the
additions made to the software for each customer for future upgrades of the
software.

The Company has established a Strategic Supply Chain Alliance Program
("SSCA") which trains and certifies third party providers.  SSCA participants
include: Worldwide -- Accenture, Cap Gemini, Emerald Solutions, IBM, and
Oracle Consulting; North America -- Safeguard Solutions Inc. and Unisys Inc.;
and Europe -- Ceratina Logistics OY, Debis, ECsoft, Icon Medialab, Logistics
Consultancy Norway Medata, Ordina, Tamperen Systemitiimi, and Tieto-Enator.
These companies provide systems integration and expertise to IMI customers
and aid in the implementation of and ongoing technical consulting for IMI's
software solutions.  The implementation of VIVALDI, which generally includes
the integration of the software with existing customer application software
and customer training, typically requires 3 to 12 months.

Training Services.  IMI customers can receive, for a fee, training either at
the customer's premises or at one of IMI's offices.  Course offerings are
divided into three primary blocks: VIVALDI, System Administration, and System
Development.  Customers who purchase training services receive training in
the use of the software, particularly in the use of some of the software's
more advanced features.  Customers often purchase training services as a
means of efficiently introducing those staff members who will be users of the
software to the basic operation of the system.  Such training services are
not, however, necessary for VIVALDI to function.

Customer Support. The Company has fully-staffed support centers in the United
States, the United Kingdom, and Sweden.  IMI provides 24 hour a day, 7 day a
week support through the Web, electronic mail, and telephone, and uses
logging/tracking systems for quality assurance.

CUSTOMERS

The following list below features some of IMI's customers worldwide:

Ahlsell (Sweden)                      Albert Heijn (Netherlands)
ASG Finland (Finland)                 AT&T Pre-Paid Phone Cards (US)
British Airways (UK)                  Brunswick Corp/Mercury Marine (US)
Canadian Tire (Canada)                Canal Digital (Norway)
Cornerstone AB (Sweden)               CoShopper.com  (Norway)
Electronic Business Partners (Sweden) ERA Taiwan (Taiwan)
Ericsson Business Networks (Sweden)   FedEx Corp. (US)
Forlagscentralen (Norway)             Gamesa/Frito Lay (Mexico, Neth., US)
GE Plastics (US)                      General Domestic Appliances (UK)
Hakon (Norway)                        InterPharm Group B.V. (Netherlands)
J.F. Hillebrand (Neth., France, SA)   Kramp Groep (Netherlands, German, UK)
K-World Knowledge Network (Sweden)    Land O'Lakes (US)
LeGrand (France)                      LM Ericsson Data (Sweden)
Mind Innovative AB (Sweden)           National Grid Ltd.  (UK)
New Zealand Dairy Industry            PDC Inc. (US)
Ralcorp (US)                          Resco (Sweden)
SCO Ltd. (UK)                         Schenker-BTL (Sweden)
Sherwin-Williams (US)                 Starkist Foods (US)
Smuckers (US)                         Spray International (Germany, Sweden)
Starbucks (US)                        Sun Valley Foods Ltd. (UK)
Telia AB (Sweden)                     VLT (Sweden)
Volvo Action Services (Sweden, US)    VWR Scientific Products (US)
Walker Foods/Frito Lay (UK)           Warner Elektra-Atlantic (US)
West Farm Foods Inc. (US)             Zurn Industries (US)

License sales of VIVALDI have usually been (and are expected to continue to
be) for large dollar amounts, with licenses ranging from $0.5 million to $5.0
million.

As a result of large VIVALDI license sales, individual customers have in the
past accounted for more than 10% of total revenues in particular quarterly
periods.  For the years ended April 30 1999, April 30, 2000, and April 30,
2001, respectively, the Company had no single customer representing more than
10% of total revenues.  The Company believes that the loss of any of its
customers would not have a material adverse effect upon the Company's
business, operating results, or financial condition.  The Company does not
expect any of its current customers to account for 10% or more of its total
revenues in fiscal 2002, but the Company expects that individual customers
(the identity of which likely will change on a quarterly basis) will continue
to account for 10% or more of the Company's total quarterly revenues in
future periods.

SALES AND MARKETING

The Company sells and supports its products through direct sales and support
organizations in Sweden, Finland, Norway, North America, Australia, Germany,
the Netherlands, and the United Kingdom. The Company's corporate
administrative offices are in Stockholm, Sweden, and it maintains offices for
product development, sales, and/or support in Mt. Laurel, New Jersey; London,
United Kingdom; Zeist, the Netherlands; Melbourne, Australia; and Stockholm,
Gothenburg, Linkoping, and Hassleholm, Sweden.

As of April 30, 2001, the Company employed 61 sales and marketing personnel.
The Company intends to maintain current expenditures for marketing activities
worldwide to support its direct sales force.  These programs will include
public relations, direct mail, trade shows, product seminars, web marketing,
user group conferences, and ongoing customer communication programs.

The Company also relies on informal arrangements with a number of hardware,
software, consulting, and systems integration firms to enhance its marketing,
sales, and customer support efforts, particularly with respect to
implementation and support of its products as well as lead generation and
assistance in the sales process. The Company expects to continue to rely
significantly upon such third parties for marketing and sales, lead
generation, product implementation, customer support services, and end user
training.

IBM Relationship

In September, 1999, the Company signed a partnership agreement with IBM
Corporation. As part of this agreement, the Company was chosen by IBM to be
one of three software vendors (along with i2 Technologies and EXE
Technologies) in IBM's Global Supply Chain Management initiative.  As part of
this initiative, IBM recommends and delivers end-to-end supply chain
management solutions to its customer base that may include IBM's own
consulting, middleware, hardware, and/or implementation services as well as
IMI's software applications.  The agreement calls for joint sales, marketing,
product development, and research and includes a fee for IBM every time the
Company sells a new software license based on IBM's recommendation.  The
Company believes this agreement can benefit its business development
activities going forward.

Sales Cycles

Because the licensing of the Company's products generally involves a
relatively significant capital expenditure by the customer, the Company's
sales processes are subject to the delays and lengthy approval processes that
are typically associated with such expenditures.  For these and other
reasons, the sales cycle associated with the licensing of the Company's
products varies substantially from customer to customer and typically lasts
between 3 and 12 months, during which time the Company may devote significant
time and resources to a prospective customer, including costs associated with
multiple site visits, product demonstrations, and feasibility studies, and
experience a number of significant delays over which the Company has no
control.  In addition the Company's quarterly operating results are subject
to certain seasonal fluctuations.

PRODUCT DEVELOPMENT

The Company has devoted significant resources to product development since
its inception, and the Company's product development expenses for the years
ended April 30, 1999, 2000, and 2001 were $24.3 million, $17.8 million, and
$15.5 million respectively.  As of April 30, 2001, the Company employed 112
people in product development.  The Company believes that its future success
depends upon its ability to continue to enhance existing products, respond to
changing customer requirements, and develop and introduce new or enhanced
products that keep pace with technological developments and emerging industry
standards. There can be no assurance that the Company will be successful in
developing enhanced versions of VIVALDI or other new products on a timely
basis, or that such enhancements or new products, when introduced will
achieve market acceptance or will adequately address the changing needs of
the marketplace.

EMPLOYEES

As of April 30, 2001, the Company employed a total of 534 full-time
employees, including 355 in Sweden, 114 in the United States, 39 in the
United Kingdom, 19 in the Netherlands, and 7 in Australia.  The Company
believes its future success will depend in part upon its ability to attract
and retain highly skilled management, marketing, sales, consulting, and
product development personnel.  Competition for such personnel is intense,
and there can be no assurance that the Company will be able to retain its key
employees or that it will be successful in attracting, assimilating, and
retaining such personnel in the future.  Of the Company's full-time
employees, 61 are in sales and marketing, 298 are in services and
maintenance, 121 are in product development, and 54 are in general
administrative functions.  The Company does not have any collective
bargaining agreements with its employees and believes that its employee
relations are good.  The foregoing discussion does not give effect to the
reduction in staff resulting from the reorganization announced in April,
2001, and discussed in the Management's Discussion and Analysis of Financial
Condition and Results of Operations in Part II of this Report.

RISK FACTORS

In addition to the other information in this Report, the following risk
factors should be considered carefully in evaluating the Company and its
business.

No Assurance of Profitability.  Although the Company achieved net income of
$6.9 million and $9.4 million in its 1997 and 1998 fiscal years,
respectively, the Company had losses of $35.3 million,$22.8 million, and
$35.3 million in its 1999, 2000, and 2001 fiscal years, respectively.  There
can be no assurance that the Company will be profitable in any future period.
Future operating results will depend on many factors, including the growth of
the market for supply chain and customer relationship management software,
market acceptance of the Company's existing and new or enhanced software
products, competition, the success of the Company's sales, support, service,
and marketing organizations, general economic conditions, and other factors.

Significant Fluctuations in Quarterly Operating Results and Seasonality. The
Company has experienced, and expects to continue to experience, significant
fluctuations in quarterly operating results that may be caused by many
factors, including, among others: the size and timing of orders for the
Company's products; the lengthy sales and/or implementation cycle for the
Company's products; delays in the implementation process; introduction or
enhancement of products by the Company or its competitors; changes in pricing
policies of the Company or its competitors; increased competition;
technological changes in computer systems and environments; the ability of
the Company to timely develop, introduce, and market new products and new
versions of existing products; quality control of products sold; market
readiness to deploy supply chain and customer relationship management
products for distributed computing environments; market acceptance of new
products and product enhancements; seasonality of revenue; customer order
deferrals in anticipation of new products and product enhancements; personnel
changes; fluctuations in foreign currency exchange rates; and mix of license
and service and maintenance revenues and general economic conditions. The
Company's revenues have been, and the Company believes will continue to be,
derived from sales (licenses) significant to its customers and, as such, the
timing of such sales is difficult to predict.  Timing of sales (licenses) has
caused, and is expected to continue to cause, material fluctuations in the
Company's operating results, particularly on a quarterly basis. As a result
of these and other factors, the Company believes that period-to-period
quarterly comparisons of its results of operations are not necessarily
meaningful and should not be relied upon as indications of future
performance. The Company's quarterly operating results also are subject to
certain seasonal fluctuations. The Company's revenues, particularly its
license revenues, are typically strongest in its third and fourth fiscal
quarters, which end January 31 and April 30, respectively, and weakest in its
first and second fiscal quarters, which end July 31 and October 31,
respectively. The Company's revenues and operating results in its third
fiscal quarter typically benefit from purchase decisions made by the large
concentration of customers with calendar year-end budgeting, while revenues
and operating results in its fourth fiscal quarter typically benefit from the
efforts of the Company's sales force to meet fiscal year-end sales quotas.
Like many application software vendors, in its first and second fiscal
quarters, the Company's sales force initiates sales activity directed to
achieving fiscal year-end goals. In addition, the Company's first and second
fiscal quarters include the months of July and August when both sales and
billable customer services activity, as well as customer purchase decisions,
are reduced, particularly in Europe, due to summer vacation schedules.  As a
result of these seasonal factors, the Company generally experiences weaker
performance in its first and/or second fiscal quarters as compared to its
third and/or fourth fiscal quarters.

Unpredictability of Orders. Because the Company generally ships software
products within a short period after receipt of an order, it typically does
not have a material backlog of unfulfilled orders. License revenues in any
quarter are substantially dependent on orders booked and shipped in that
quarter and cannot be predicted with any degree of certainty. The Company has
historically recognized a significant portion of its license revenues in the
last two weeks of a quarter. Any significant shortfall of license revenues in
relation to the Company's expectations or any material delay of customer
orders may have an immediate adverse effect on its business, operating
results, and financial condition.  Due to the foregoing factors, it is
possible that in future periods the Company's revenues and thus its operating
results may be below the expectations of public market analysts and
investors. In such event, the price of the Company's Common Stock could be
materially and adversely affected.

Lengthy Sales and Implementation Cycle. The sale (license) and implementation
of the Company's products, particularly those related to larger sales of
enterprise applications, generally involve a significant commitment of
resources by prospective customers. As a result, the Company's sales process
often is subject to delays associated with lengthy approval processes
associated with significant capital expenditures. For these and other
reasons, the sales cycle associated with the license of the Company's
products varies substantially from customer to customer and typically lasts
between 3 and 12 months during which time the Company may devote significant
time and resources to a prospective customer, including costs associated with
multiple site visits, product demonstrations, and feasibility studies, and
experience a number of significant delays over which the Company has no
control. Any significant or ongoing failure by the Company to ultimately
achieve such sales could have a material adverse effect on the Company's
business, operating results, and financial condition. In addition, following
license sales, the software implementation typically involves customer
training, integration with the customer's other existing systems, and the
development of product extensions to add customer-specific functionality. The
Company and/or a third party consultant generally provide such post delivery
implementation services pursuant to a separate professional services
agreement.  A successful implementation requires a close working relationship
between the Company, the customer, and, frequently, third party consultants
who assist in the implementation process. Any inability of the Company to
achieve such close working relationships, or any inability of the Company's
consulting services organization or third party consultants to perform
implementation services on a timely basis, may result in delays in the
customer implementation process.  There can be no assurance that delays in
the implementation process for any given customer will not have a material
adverse effect on the Company's business, operating results, and financial
condition.

Competition. The Company's products are targeted at markets for supply chain
and customer relationship management software products. This market space is
very competitive and characterized by rapid technological change. The
Company's competitors are diverse and offer a variety of solutions directed
at various segments of the supply chain and customer relationship management
as well as the enterprise as a whole. These competitors include (i)
enterprise application software vendors which offer client/server ERP
solutions, such as SAP AG, J.D. Edwards & Company, System Software
Associates, Inc., and Oracle, (ii) companies offering e-commerce and CRM
solutions, such as Yantra Corporation, CommercialWare, Descarte Systems,
Siebel, and I2,(iii) companies offering standardized or customized products
on mainframe and/or mid-range computer systems, (iv) internal development
efforts by corporate information technology departments, (v) smaller
independent companies which have developed or are attempting to develop
advanced supply chain management and/or logistics execution software which
complements or competes with the Company's software solutions, and (vi) other
business application software vendors who may broaden their product offerings
by internally developing, or by acquiring or partnering with independent
developers of, advanced logistics execution software. In addition, many of
the Company's competitors have longer operating histories, significantly
greater financial, technical, marketing, and other resources, greater name
recognition, and a larger installed base of customers than the Company. In
order to be successful in the future, the Company must continue to respond
promptly and effectively to the challenges of technological change and
competitive innovations. The Company's competitors may be able to respond
more quickly to new or emerging technologies and changes in customer
requirements or devote greater resources to the development, promotion, and
sale of their products than the Company. The Company also expects to face
additional competition as other established and emerging companies enter the
market for order fulfillment and customer relationship management software
and new products and technologies are introduced. In addition, current and
potential competitors may make strategic acquisitions or establish
cooperative relationships among themselves or with third parties, thereby
increasing the ability of their products to address the needs of the
Company's prospective customers. Accordingly, it is possible that new
competitors or alliances among current and new competitors may emerge and
rapidly gain significant market share resulting in price reductions, fewer
customer orders, and reduced gross margins, any one of which could materially
adversely affect the Company's business, operating results, and financial
condition. There can be no assurance that the Company will be able to compete
successfully with existing or new competitors or that competition will not
have a material adverse effect on the Company's business, operating results,
and financial condition.

Attracting and Retaining Key Employees. The Company believes its future
success and ability to achieve revenue growth will depend in significant part
upon its ability to attract and retain highly skilled management, sales,
support, service, marketing, and product development personnel. Competition
for such personnel is intense, and recruiting such personnel is becoming
increasingly difficult because of the strong world-wide economy. In addition,
the loss of one or more of the Company's key personnel could have a material
adverse effect on the Company's business, operating results, and financial
condition. The Company does not have, and does not intend to obtain, key man
life insurance on any of its executive management personnel. There can be no
assurance that the Company will be able to retain its key employees or that
it will be successful in attracting, assimilating, and retaining such
personnel in the future. Failure to attract, assimilate, and retain key
personnel could have a material adverse effect on the Company's business,
operating results, and financial condition.

Reliance on and Need to Develop Additional Relationships with Third Parties.
The Company relies on formal and informal arrangements with a number of
software vendors and consulting and systems integration firms to enhance its
sales, support, service, and marketing efforts, particularly with respect to
implementation and support of its products and lead generation and assistance
in the sale process. Such firms include Accenture, Cap Gemini, Emerald
Solutions, IBM, and Oracle Consulting Worldwide, Safeguard Solutions and
Unisys Inc. in North America, and Ceratina Logistics OY, Debis, ECsoft,
IconMedialab, Logistics Consultancy Norway Medata, Ordina, Tamperen
Systemitiimi, and Tieto-Enator in Europe. The Company expects to continue to
rely significantly upon such third parties for marketing and sales, lead
generation, product implementation, customer support services, and end user
training. The Company will need to expand its relationships with these
parties and enter into relationships with additional third parties in order
to support revenue growth.  Many such firms have similar, and often more
established, relationships with the Company's principal competitors. There
can be no assurance that these and other third parties will provide the level
and quality of service required to meet the needs of the Company's customers,
that the Company will be able to maintain an effective, long term
relationship with such third parties, or that such third parties will
continue to meet the needs of the Company's customers. If the Company is
unable to develop and maintain effective relationships with these and other
third parties, or if such parties fail to meet the needs of the Company's
customers, the Company's business, operating results, and financial condition
could be adversely affected. Further, there can be no assurance that these
software vendors and third party implementation providers, many of which have
significantly greater financial, technical, personnel, and marketing
resources than the Company, will not market software products in competition
with the Company in the future or will not otherwise reduce or discontinue
their relationships with or support of the Company and its products.

Dependence on VIVALDI Suite. License and service and maintenance revenues
related to the Company's VIVALDI suite of software products (which includes
products formerly know as System ESS) have represented a substantial portion
of the Company's revenues in recent years. Such sales are expected to
continue to represent a significant part of the Company's revenues in the
future. The Company's success depends on continued market acceptance of these
products as well as its ability to introduce new versions and products to
meet the evolving needs of its customers. There can be no assurance that the
Company's products will continue to achieve market acceptance or that the
Company will introduce enhanced versions on a timely basis, or at all, to
meet the evolving needs of its customers. Any reduction in demand for the
Company's products, increased competition in the market for supply chain and
customer relationship management software, technological change, or other
factors could have a materially adverse effect on the Company's business,
operating results and financial condition.

Dependence on Market for Supply Chain and Customer Relationship
Management Software. The Company currently derives, and is expected to
continue to derive, a substantial portion of its revenues from licenses and
services related to its VIVALDI suite of client/server supply chain and
customer relationship management software products. The market for
enterprise-wide management software in general, and for supply chain and
customer relationship management software in particular, has been limited in
recent periods, and there can be no assurance that it will stabilize or that
businesses will continue to license components of the VIVALDI suite. The
Company has spent, and intends to continue to spend, considerable resources
educating potential customers generally about supply chain and customer
relationship management, about the need for order fulfillment and customer
relationship management software solutions, and specifically about the
VIVALDI suite. However, there can be no assurance that such expenditures will
enable the VIVALDI suite to achieve any additional degree of market
acceptance. If the supply chain and customer relationship management software
market fails to grow or grows more slowly than the Company currently
anticipates, the Company's business, operating results, and financial
condition could be materially and adversely affected.

Rapid Technological Change and Requirement for Frequent Product Transitions.
The market for the Company's products is characterized by rapid technological
developments, evolving industry standards, and rapid changes in customer
requirements. The introduction of products embodying new technologies, the
emergence of new industry standards, or changes in customer requirements
could render the Company's existing products obsolete and unmarketable. As a
result, the Company's success depends upon its ability to continue to enhance
existing products, respond to changing customer requirements, and develop and
introduce in a timely manner new or enhanced products that keep pace with
technological developments and emerging industry standards. Customer
requirements include, but are not limited to, operability across distributed
and changing heterogeneous hardware platforms, operating systems, relational
databases, and networks. The VIVALDI suite of software currently provides
support for 13 languages. VIVALDI can currently operate on UNIX server
platforms for Hewlett-Packard Corporation, IBM, Digital Equipment
Corporation, and Sun Microsystems Corporation as well as on Windows NT server
platforms. The Company continues to enhance its products to operate on such
platforms in order to meet customers' requirements. There can be no
assurances that the Company will be successful in developing enhanced
versions or new components of the VIVALDI suite or new products on a timely
basis, or that such enhancements or new products, when introduced, will
achieve market acceptance or will adequately address the changing needs of
the marketplace. If the Company is unable to develop and introduce new
products or enhancements to existing products in a timely manner in response
to changing market conditions or customer requirements, the Company's
business, operating results, and financial condition could be materially and
adversely affected.

Litigation.  The Company is engaged in an arbitration to collect monies due
from a customer in which the customer has interposed a claim for damages.
The Company believes that the customer's claim is without merit.  In
addition, in February, 1999, a class action lawsuit was commenced by service
of a complaint against the Company, certain of its officers, directors, and
controlling shareholders who sold shares of Common Stock during the class
period, and its underwriters claiming violations of the Federal securities
laws.  The complaint was dismissed, but the plaintiff had the right and did
serve a new complaint.  A motion to dismiss the second complaint has been
submitted.  No answer to either complaint was filed.  While management
believes the class action to be without merit, an unfavorable outcome in that
case or any other action which may be brought against the Company may have a
material adverse affect upon the Company's business, operating results, and
financial condition.

Risk of Software Defects. Software products as complex as those offered by
the Company frequently contain errors or defects, especially when first
introduced or when new versions or enhancements are released. Despite product
testing, the Company has in the past released products with defects,
discovered software errors in certain of its new versions after introduction,
and experienced delays or lost revenue during the period required to correct
these errors. The Company regularly introduces new releases and periodically
introduces new products.  There can be no assurance that, despite testing by
the Company and by its customers, defects and errors will not be found in
existing products or in new products, releases, versions, or enhancements
after commencement of commercial shipments. Any such defects and errors could
result in adverse customer reactions, negative publicity regarding the
Company and its products, harm to the Company's reputation, loss of or delay
in market acceptance, or require product changes, any of which could have a
material adverse effect upon the Company's business, operating results, and
financial condition.

Product Liability. The Company's license agreements with customers typically
contain provisions designed to limit the Company's exposure to potential
product liability claims. The limitation of liability provisions contained in
such license agreements, professional services agreements, and support
agreements may not be effective. The Company's products are generally used to
manage data critical to its customers and, as a result, the sale and support
of products by the Company may entail the risk of product liability claims. A
successful liability claim brought against the Company not covered by
insurance could have a material adverse effect upon the Company's business,
operating results, and financial condition.

Dependence on Proprietary Technology; Risks of Infringement. The Company's
success depends, in part, upon the protection of its proprietary technology.
The Company relies on a combination of copyright, trademark, and trade secret
laws, confidentiality procedures, and license arrangements to establish and
protect its proprietary rights. As part of its confidentiality procedures,
the Company licenses its software pursuant to signed license agreements that
impose restrictions on the licensee's ability to utilize the software and
generally enters into non-disclosure agreements with its employees,
distributors, and partners, and limits access to and distribution of its
software, documentation, and other proprietary information. Despite these
precautions, it may be possible for a third party to copy the Company's
products or otherwise obtain and use the Company's proprietary technology
without authorization. In addition, the laws of certain countries do not
protect the Company's proprietary rights to the same extent as do the laws of
the United States or Sweden. Accordingly, third parties may copy or otherwise
obtain and use the Company's proprietary technology without authorization.
There can be no assurance that the Company's protection of its proprietary
rights will be adequate or that the Company's competitors will not
independently develop similar technology or duplicate illegally the Company's
products.

The Company is not aware that any of its products infringe the proprietary
rights of third parties. There can be no assurance, however, that third
parties will not claim such infringement by the Company with respect to
current or future products. The Company expects that software product
developers increasingly will be subject to such claims as the number of
products and competitors in the Company's industry segment grows and the
functionality of products in the industry segment overlap. Any such claims,
with or without merit, could result in costly litigation that could absorb
significant management time, which could have a material adverse effect on
the Company's business, operating results, and financial condition. Such
claims might require the Company to enter into royalty or license agreements.
Such royalty or license agreements, if required, may not be available on
terms acceptable to the Company or at all, which could have a material
adverse effect upon the Company's business, operating results, and financial
condition.

Exposure to Currency Fluctuations. A significant portion of the Company's
business is conducted in currencies other than the U.S. dollar (the currency
in which its financial statements are stated), primarily the Swedish krona
and, to a lesser extent, the U.K. pound sterling, the Dutch guilder, the
German mark, the French franc, the Australian dollar, and the Canadian
dollar. The Company incurs a significant portion of its expenses in Swedish
krona, including all of its product development expenses and a substantial
portion of its general and administrative expenses. As a result, fluctuations
of the value of the Swedish krona relative to the other currencies in which
the Company generates revenues and expenses, could adversely affect operating
results. The financial statements of the Company are translated from the
functional currency of the operating subsidiaries into U.S. dollars, the
Company's reporting currency, utilizing the current rate method. Accordingly,
assets and liabilities are translated at exchange rates in effect at the end
of the reporting period, and revenues and expenses are translated at the
weighted average exchange rate during the period. All translation gains or
losses from the translation into the Company's reporting currency are
included as a separate component of stockholders' equity.  Fluctuations in
the Swedish krona and other currencies relative to the U.S. dollar will
effect period to period comparison of the Company's reported results of
operations. Due to constantly changing currency exposures and the volatility
of currency exchange rates, there can be no assurance that the Company will
not experience currency losses in the future, nor can the Company predict the
effect of exchange rate fluctuations upon future operating results. The
Company does not currently undertake hedging transactions to cover its
currency exposure, but the Company may choose to hedge a portion of its
currency exposure in the future as it deems appropriate.

Possible Volatility of Stock Price. The market price for the Common Stock has
in the past been, and in the future could be, subject to significant
fluctuations in response to a number of factors, including the announcement
of new products or product enhancements by the Company or its competitors,
quarterly variations in the Company's results of operations, or results of
operations of its competitors or companies in related industries, changes in
earnings or revenue estimates, or recommendations by securities analysts,
developments in the Company's industry, general market conditions, and other
factors, including factors unrelated to the operating performance of the
Company or its competitors. In addition, stock prices for many companies in
the technology and emerging growth sectors have experienced wide fluctuations
that have often been unrelated to the operating performance of such companies
and are currently a depressed market sector. Such factors and fluctuations,
as well as general economic, political, and market conditions, such as
recessions, could materially and adversely affect the market price of the
Company's Common Stock.

Control by Management and Current Stockholders; Indemnification of Officers
and Directors. The Company's executive officers and directors and their
affiliates, in the aggregate, own beneficially 51.1% of the Company's
outstanding Common Stock as of July 1, 2001.  In particular, Warburg, Pincus
Investors, L.P. ("Warburg") owned beneficially 38.0% of the Company's
outstanding Common Stock as of such date. As a result, Warburg can exercise
significant influence over all matters requiring stockholder approval,
including the election of directors and approval of significant corporate
transactions. The voting power of Warburg and the Company's officers and
directors under certain circumstances could have the effect of delaying,
deferring, or preventing a change in control of the Company, and making
certain transactions more difficult or impossible absent the support of such
stockholders, including proxy contests, mergers involving the Company, tender
offers, open-market purchase programs, or other purchases of Common Stock
that could give stockholders of the Company the opportunity to realize a
premium over the then prevailing market price for shares of Common Stock. The
Company has entered into agreements with its officers and directors
indemnifying them against losses they may incur in legal proceedings arising
from their service to the Company.

Effect of Certain Charter Provisions; Antitakeover Effects of the Company's
Charter, By-laws, and Delaware Law. The Company's Board of Directors has the
authority to issue up to 15,000,000 shares of Preferred Stock and to
determine the price, preferences, privileges, and restrictions, including
voting rights, of those shares without any further vote or action by the
stockholders. The rights of the holders of Common Stock will be subject to,
and may be adversely affected by, the rights of the holders of any Preferred
Stock that may be issued in the future. The issuance of Preferred Stock could
have the effect of making it more difficult for a third party to acquire a
majority of the outstanding voting stock of the Company. In addition, the
Company is subject to the antitakeover provisions of Section 203 of the
Delaware General Corporation Law, which prohibits the Company from engaging
in a "business combination" with an "interested stockholder" for a period of
three years after the date of the transaction in which the person became an
interested stockholder, unless the business combination is approved in a
prescribed manner. The application of Section 203 also could have the effect
of delaying, deferring, or preventing a change of control of the Company.
Further, certain provisions of the Company's Certificate of Incorporation and
By-laws may have the effect of discouraging, delaying, or preventing a
merger, tender offer, or proxy contest involving the Company, which could
adversely affect the market price of the Company's Common Stock.

Registration Rights. A total of 15,349,769 shares of Common Stock held by
certain stockholders are entitled to certain registration rights. If such
stockholders, by exercising their registration rights, cause a large number
of shares to be registered and sold in the public market, the sale of such
shares could have a material adverse effect on the market price for the
Company's Common Stock and could materially adversely effect the Company's
ability to raise additional capital when or if required.

Enforceability of U.S. Judgments against Non-U.S. Officers and Directors. A
substantial portion of the Company's assets are located outside the United
States. In addition, members of the Board of Directors of the Company and
certain experts named herein are residents of countries other than the United
States.  As a result, it may not be possible for investors to effect service
of process within the United States upon such persons or to enforce against
such persons judgments of courts of the United States predicated upon civil
liabilities under the United States Federal securities laws. There can be no
assurance that United States investors will be able to enforce against the
members of the Board of Directors or certain experts named herein who are
residents of Sweden or countries other than the United States, any judgments
in civil and commercial matters, including judgments under the federal
securities laws. In addition, there is doubt as to whether a Swedish court
would impose civil liability on the members of the Board of Directors of the
Company in an original action predicated solely upon the Federal securities
laws of the United States brought in a court of competent jurisdiction in
Sweden against the Company or such members.

Holding Company Structure. All of the operations of the Company are and will
be conducted through direct and indirect subsidiaries. The Company's cash
flow will depend upon the operating results and cash flow of its subsidiaries
and the payment of funds by those subsidiaries to the Company in the form of
loans, dividends, or by other methods. The subsidiaries are separate and
distinct legal entities and have no obligation, contingent or otherwise, to
make funds available to the Company, whether in the form of loans, dividends,
or otherwise.  Applicable law in certain countries may limit the ability of a
subsidiary to pay dividends in the absence of sufficient distributable
reserves or for other reasons. The Company's Australian, Canadian, Dutch,
French, German, Swedish, United Kingdom, and United States subsidiaries are
not subject to any current exchange controls of which the Company is aware.
However, future exchange controls in these counties, or the existence of such
controls in other countries in which the Company establishes subsidiaries,
could limit or restrict the ability of the Company to obtain loans,
dividends, or otherwise access financial resources in such subsidiaries.  In
addition, the Company's subsidiaries may from time to time in the future
become parties to financing arrangements which may contain limitations on the
ability of such subsidiaries to pay dividends or to make loans or advances to
the Company. In the event of any insolvency, bankruptcy, or similar
proceedings, creditors of the subsidiaries would generally be entitled to
priority over the stockholders of the Company with respect to assets of the
affected subsidiary.

ITEM 2. FACILITIES

The Company's principal product development facilities and its Nordic
service, support, sales, and marketing offices are located in Stockholm,
Sweden.  In August, 1999, the Company moved its Stockholm operations to new
premises of approximately 98,000 square feet pursuant to a lease expiring
August 2004.  The Company also leases 38,000 square feet of office space in
Mt. Laurel, New Jersey, pursuant to a lease expiring in January 2005, three
smaller offices in Sweden, and one each in the United Kingdom, the
Netherlands, and Australia.  The Company believes that it will be able to
locate sufficient office space to allow it to operate according to its plans
for at least the next two fiscal years.

ITEM 3. LEGAL PROCEEDINGS

     The Company is engaged in an arbitration to collect monies due from a
customer in which the customer has interposed a claim for damages.  The
Company believes that the customer's claim is without merit.  In addition, in
February, 1999, a class action lawsuit was commenced by service of a
complaint against the Company, certain of its officers, directors, and
controlling shareholders who sold shares of Common Stock during the class
period, and its underwriters claiming violations of the Federal securities
laws.  The complaint was dismissed, but the plaintiff had the right and did
serve a new complaint.  A motion to dismiss the second complaint has been
submitted. No answer to either complaint was filed. While management believes
this action to be without merit, an unfavorable outcome in the class or any
other action which may be brought against the Company may have a material
adverse affect upon the Company's business, operating results, and financial
condition. In May, 1999, the Company initiated an Arbitration in Denmark
against a Danish licensee of System ESS seeking damages for breach of
contract, and this licensee claimed damages against the Company for breach of
contract. This action was settled during fiscal 2001.

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

No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year ended April 30, 2001.






                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS

The Company's Common Stock, $.01 par value, is traded on the Nasdaq National
Market under the symbol "IMIC". The following table sets forth, for the
fiscal quarters indicated, the high and low closing prices per share for the
respective quarterly periods, as reported in published financial sources.

Fiscal Year 2000                                       High            Low
-----------------                                      ----           ----
First Quarter (ended July 31, 1999)                $  2.8750      $  1.7500
Second Quarter (ended October 31, 1999)               3.4375         1.6562
Third Quarter (ended January 31, 2000)                9.1250         2.3125
Fourth Quarter (ended April 30, 2000)                15.9375         5.5000

Fiscal Year 2001                                       High            Low
-----------------                                      ----           ----
First Quarter (ended July 31, 2000)                 $ 8.0625       $ 3.5938
Second Quarter (ended October 31, 2000)               4.4375         2.7500
Third Quarter (ended January 31, 2001)                5.1250         1.7188
Fourth Quarter (ended April 30, 2001)                 2.4688         1.0000


As of July 27, 2001, there were 67 shareholders of record including Cede &
Company in its capacity as nominee for the Depository Trust Company.

DIVIDEND POLICY

The Company has never declared or paid any dividends on its Common Stock and
does not intend to do so in the foreseeable future. It is the present
intention of the Company to retain any future earnings to provide funds for
the operation and expansion of its business.

ITEM 6. SELECTED FINANCIAL DATA

     The following selected consolidated financial data is qualified by
reference to, and should be read in conjunction with, "Management's
Discussion and Analysis of Financial Condition and Results of Operations," in
Item 7 of this Form 10-K and the Consolidated Financial Statements and Notes
thereto and the other financial information included in Item 14 of this Form
10-K. The selected consolidated financial data set forth below for the
Company as of April 30, 2001, and April 30, 2000, and for each of the three
years in the period ended April 30, 2001, are derived from audited financial
statements included elsewhere in this Report.



<TABLE>
Five Year Review:
                                                                   Year Ended April 30,
                                                     2001        2000        1999        1998        1997
                                                               (in thousands, except per share data)
Consolidated Statement of Operations Data:
  Revenues:
<S>                                               <C>         <C>         <C>         <C>         <C>
 Licenses .....................................   $ 13,478    $ 12,167    $ 17,039    $ 36,090    $ 26,147
 Services and maintenance .....................     53,313      61,318      68,233      57,632      31,747
 Other ........................................      2,564       1,540       1,696       1,662       1,718
                                                  --------    --------    --------    --------    --------
 Total revenues ...............................     69,355      75,025      86,968      95,384      59,612
                                                  --------    --------    --------    --------    --------
Cost of revenues:

 Licenses .....................................      1,336       1,916       2,212         790       1,540
 Services and maintenance .....................     37,375      48,528      68,670      41,826      22,871
 Other ........................................        520         429         752       1,029       1,001
                                                  --------    --------    --------    --------    --------
 Total cost of revenues .......................     39,231      50,873      71,634      43,645      25,412
                                                  --------    --------    --------    --------    --------
 Gross profit .................................     30,124      24,152      15,334      51,739      34,200
                                                  --------    --------    --------    --------    --------
Operating expenses:

 Product development ..........................     15,479      17,784      24,267      14,684       9,935
 Acquired In-process Research and Development .         --          --       2,500                       -
 Sales and marketing ..........................     15,878      20,555      27,295      20,878      14,997
 General and administrative ...................      9,026       9,251      12,332       6,989       4,399
 Amortization of goodwill .....................      4,506       1,383         486         114           -
 Restructuring costs ..........................      5,391          --       3,522                       -
                                                  --------    --------    --------    --------    --------

 Total operating expenses .....................     50,280      48,973      70,402      42,665      29,331
                                                  --------    --------    --------    --------    --------
Income (loss) from operations .................    (20,156)    (24,821)    (55,068)      9,074       4,869
 Other income (expense):
 Interest income ..............................      1,561       2,183       4,446       3,490         643
Interest expense .............................         (13)        (65)       (128)       (123)       (253)
 Miscellaneous expense, net ...............         (1,219)        (96)       (931)       (286)        (21)
                                                  --------    --------    --------    --------    --------
Income (loss) from continuing
 operations before income taxes ...............    (19,827)    (22,799)    (51,681)     12,155       5,238
(Provision) benefit for income taxes ..........    (15,424)         --      16,422      (2,762)        190
                                                  --------    --------    --------    --------    --------
Income (loss) from continuing operations ......    (35,251)    (22,799)    (35,259)      9,393       5,428
Income (loss) from discontinued operations ....                                 --          --         374
Gain on sale of discontinued operations
 (net of income tax of $372) ..................         --           -          --          --       1,100
                                                  --------    --------    --------    --------    --------
Net income (loss) .............................   $(35,251)   $(22,799)   $(35,259)   $  9,393    $  6,902
                                                  ========    ========    ========    ========    ========
Net income (loss) per share data-assuming dilution(1):

Income (loss) from continuing operations ......   $  (1.10)   $  (0.72)   $  (1.09)   $   0.30    $   0.20
Income from discontinued operations ...........         --          --          --          --        0.01
Gain on sale of discontinued operations .......         --          --          --          --        0.04
                                                  --------    --------    --------    --------    --------
Net income (loss) per share-assuming dilution     $  (1.10)   $  (0.72)   $  (1.09)   $   0.30    $   0.25
                                                  ========    ========    ========    ========    ========
Shares used in per share calculation-assuming
  dilution ....................................     31,986      31,672      32,431      30,821      28,063
                                                  ========    ========    ========    ========    ========

                                                                  April 30,
                                          2001           2000          1999          1998            1997
                                                                (in thousands)
Consolidated Balance Sheet Data:
  Cash and cash equivalents.          $  12,053      $ 12,036      $ 29,065      $ 41,982         $ 9,023
  Short-term investments ...             12,866        19,821        24,848        69,416           9,952
  Working capital ..........             16,475        32,650        54,187       120,479          30,831
  Total assets .............             52,510        88,932       115,085       149,329          50,963
  Capital lease obligations,
    less current portion ....                 -             -             -           281             554
  Total stockholders' equity             25,790        61,459        83,881       124,573          34,754
- ----------
</TABLE>
(1) See Note 2 of Notes to Consolidated Financial Statements for an explanation
of the determination of shares used in calculating net income (loss) per
share-assuming dilution.





ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

This Report contains forward-looking statements within the meaning of Section
27A of the Securities Act, and Section 21E of the Exchange Act that involve
certain risks and uncertainties. Discussions containing such forward-looking
statements may be found in the material set forth below and under "Risk
Factors" and "Business," as well as in this Report generally, including the
documents incorporated in this Report by reference. Without limiting the
foregoing, the words "believes," "anticipates," "plans," "intends,"
"expects," and similar expressions are intended to identify forward-looking
statements. The Company's actual results could differ materially from those
anticipated in such forward-looking statements as a result of certain
factors, including those set forth under "Risk Factors" appearing elsewhere
in this Report and in the documents incorporated in this Report by reference.
These forward-looking statements are made as of the date of this Report and
the Company assumes no obligation to update such forward-looking statements
or to update the reasons why actual results could differ materially from
those anticipated in such forward-looking statements.

OVERVIEW

Industri-Matematik International Corp. develops, markets, and supports
client/server application software that enables manufacturers, distributors,
and wholesalers to manage their supply chain and customer relationships more
effectively. The Company was founded in 1967 as a custom software development
and consulting services organization.  The Company developed and delivered
its first distribution logistics software in 1974, its first UNIX-based
version in 1984, and its first Oracle-based client/server version in 1991.
In 1993, the Company introduced System ESS(R), which was software designed to
meet the needs of multinational manufacturers, distributors, and wholesalers.
In May, 1999, the Company introduced VIVALDI(TM), a software suite of open
applications which provide full capabilities for managing and executing the
global fulfillment and customer service process.  VIVALDI includes System ESS
components and Customer Relationship Management Software, Open Warehouse, and
other components.  During fiscal 2001, the Company introduced VIVALDI Net
Series (TM) and VIVALDI Portal (TM), which facilitate collaboration among
suppliers, manufacturers, and customers via the Internet, and VIVALDI Store
Replenishment (TM), which helps companies minimize inventory and operating
expenses.

Substantially all of the Company's revenues in the last three years have
been attributable to license fees and related services, including software
maintenance and support, implementation, consulting, and training. The
Company expects that license and services revenues related to its VIVALDI
suite will continue to constitute substantially all of the Company's revenues
in the foreseeable future.

North American revenues decreased to $28.2 million in fiscal 2001 from $28.9
million in fiscal 2000, European revenues decreased to $39.3 million in
fiscal 2001 from $43.6 million in fiscal 2000, and Asia/Pacific revenues
decreased to $1.2 million from $2.2 million over the same period.  Future
operating results will depend on many factors, including the growth of the
supply chain and customer relationship management software market, market
acceptance of the Company's products, competition, the success of the
Company's sales, support, service, and marketing organizations, general
economic conditions, and other factors.

A significant portion of the Company's business has been conducted in
currencies other than the U.S. dollar (the currency in which its financial
statements are stated), primarily the Swedish krona and, to a lesser extent,
the U.K. pound sterling, the Dutch guilder, the German mark, the French
franc, the Australian dollar, and the Canadian dollar. The Company incurs a
significant portion of its expenses in Swedish kronor, including a
substantial part of its product development and general and administrative
expenses. As a result, changes of the value of the Swedish krona relative to
the other currencies in which the Company generates revenues, particularly
the U.S. dollar, could affect operating results. The financial statements of
the Company are translated from the functional currency of the operating
subsidiaries into U.S. dollars, the Company's reporting currency, utilizing
the current rate method. Accordingly, assets and liabilities are translated
at exchange rates in effect at the end of the reporting period, and revenues
and expenses are translated at the weighted average exchange rate during the
period. All translation gains or losses from the translation into the
Company's reporting currency are included in Other Comprehensive Loss.
Fluctuations in the Swedish krona and other currencies relative to the U.S.
dollar will affect period to period comparison of the Company's reported
results of operations.  Due to the constantly changing currency exposures and
the volatility of currency exchange rates, there can be no assurance that the
Company will not experience currency losses in the future, nor can the
Company predict the effect of exchange rate fluctuations upon future
operating results. The Company does not currently undertake hedging
transactions to cover its currency exposure, but the Company may choose to
hedge a portion of its currency exposure in the future as it deems
appropriate.

RESULTS OF OPERATIONS

For the fiscal periods indicated, the following table sets forth the
percentage of total revenues represented by certain items reflected in the
Company's consolidated statements of operations:

                                                     Years Ended April 30,
                                                2001        2000        1999
Consolidated Statement of Operations Data:

Revenues:
 Licenses .................................      19.4%       16.2%      19.6%
 Services and maintenance .................      76.9        81.7       78.5
 Other ....................................       3.7         2.1        1.9
                                               ------      ------     ------
  Total revenues ..........................     100.0       100.0      100.0

Cost of revenues:
  Licenses ................................       1.9         2.6        2.5
  Services and maintenance ................      53.9        64.7       79.0
  Other ...................................       0.8         0.5        0.9
                                               ------      ------     ------
   Total cost of revenues .................      56.6        67.8       82.4
                                               ------      ------     ------
   Gross profit ...........................      43.4        32.2       17.6
                                               ------      ------     ------
Operating expenses:
 Product development ......................      22.3        23.7       27.9
 Acquired in-process research and development      --          --        2.9
 Sales and marketing ......................      22.9        27.4       31.4
 General and administrative ...............      13.0        12.3       14.2
 Amortization of goodwill and other intangibles   6.5         1.9        0.6
 Restructuring costs ......................       7.8          --        4.0
                                               ------      ------     ------
  Total operating expenses ................      72.5        65.3       81.0
                                               ------      ------     ------
Loss from operations ......................     (29.1)      (33.1)     (63.4)
Other income (expense):
 Interest income ..........................       2.2         2.9        5.1
 Interest expense .........................        --        (0.1)      (0.1)
 Miscellaneous expense, net ...............      (1.8)       (0.1)      (1.0)
                                               ------      ------     ------
Loss from continuing operations before
 income taxes .............................     (28.7)      (30.4)     (59.5)
(Provision) benefit for income taxes.......     (22.2)         --       18.9
                                               ------      ------     ------
Loss from continuing operations ...........     (50.9)      (30.4)     (40.6)
                                               -------     -------    -------
Net loss ..................................     (50.9%)     (30.4%)   (40.6%)

COMPARISON OF FISCAL YEARS 2001, 2000, and 1999

REVENUES

The Company's revenues consist of software license revenues, service and
maintenance revenues, and other revenues. Software license revenue is
recognized when persuasive evidence of an arrangement exists and delivery has
occurred, the fee is fixed and determinable, collectibility is probable, and
the arrangement does not require significant customization of the software.
Service revenue is recognized as the Company performs the services in
accordance with the contract. Maintenance and support revenue is deferred and
recognized ratably over the term of the agreement, generally one year. Other
revenues are primarily third-party hardware sales necessary to help certain
customers implement the Company's products. The Company derives substantially
all of its revenues from licenses of its software and related service and
maintenance.

Total revenues decreased 7.6% to $69.4 million in fiscal 2001 from $75.0
million in fiscal 2000 as a result of a decrease in service and maintenance
revenues offset by a small increase in software license revenues and other
revenues.  Total revenues decreased 13.7% to $75.0 million in fiscal 2000
from $87.0 million in fiscal 1999 as a result of a decrease in software
license revenues and service and maintenance revenues.

Software License Revenues. Revenues from software licenses increased 10.8% to
$13.5 million in fiscal 2001 from $12.2 million in fiscal 2000, and decreased
28.6% in fiscal 2000 from $17.0 million in fiscal 1999. Software license
revenues constituted 19.4%, 16.2%, and 19.6% of total revenues in fiscal
2001, 2000, and 1999, respectively. Management believes that a major factor
in the decrease in software license revenue in fiscal 2000 from fiscal 1999
was due to a general contraction in the market for large enterprise-wide
solutions and the reluctance of customers to commence large-scale
implementations near the turn of the century due to general concerns
regarding Year 2000 compliance problems. The increase in software license
revenues in fiscal 2001 from fiscal 2000 was not substantial and represented
no significant year to year change and reflects the continuing contraction in
the market for the Company's products.

Service and Maintenance Revenues. Service and maintenance revenues decreased
13.0% to $53.3 million in fiscal 2001 from $61.3 million in fiscal 2000, and
decreased 10.1% in fiscal 2000 from $68.2 million in fiscal 1999.  Service
and maintenance revenues constituted 76.9%, 81.7%, and 78.5% of total
revenues in fiscal 2001, 2000, and 1999, respectively. The decreases in the
absolute dollar amount of service and maintenance revenues in fiscal 2001
from fiscal 2000 and in fiscal 2000 from fiscal 1999 were related primarily
to the decreases in software licenses sold during the prior fiscal periods,
as service and maintenance revenues tend to track software license
transactions in prior periods.

Other Revenues. Other revenues are primarily third-party hardware sales to
the Company's Scandinavian customer base. Other revenues increased 66.5% to
$2.6 million in fiscal 2001 from $1.5 million in fiscal 2000 and decreased
9.2% in fiscal 2000 from $1.7 million in fiscal 1999.  Other revenues
constituted 3.7%, 2.0%, and 1.9% of total revenues in fiscal 2001, 2000, and
1999, respectively. Other revenues tend to vary over time in absolute dollars
and as a percentage of total revenues due to the size of specific hardware
sales.

COST OF REVENUES

Cost of revenues was $39.2 million, $50.9 million, and $71.6 million in
fiscal 2001, 2000, and 1999, representing 56.6%, 67.8%, and 82.4% of total
revenues, respectively. The decreases in cost of revenues both in absolute
dollars and as a percentage of total revenues in fiscal 2001 from fiscal 2000
and in fiscal 2000 from fiscal 1999 were primarily due to a restructuring
program reducing the Company's workforce through layoffs and attrition
initiated during the fourth quarter of fiscal 1999 to correspond with the
declining revenue trend.

The following table sets forth, for the periods indicated, the cost of
revenues for each revenue category and the cost of revenues represented as a
percentage of each revenue category:
<TABLE>
                                                Year Ended April 30,
                                  2001                2000               1999
                           -----------------------------------------------------------
                           Cost      % of       Cost      % of      Cost       % of
                           of        Revenue    of        Revenue   of         Revenue
                           Revenues  Category   Revenues  Category  Revenues
Category
                      (in thousands, except percentage data)
<S>                         <C>        <C>       <C>        <C>      <C>        <C>

Licenses ...............    $ 1,336      9.9%    $ 1,916     15.7%   $ 2,212     13.0%
Services and maintenance     37,375     70.1      48,528     79.1     68,670    100.6
Other ..................        520     20.3         429     27.9        752     44.3
                            -------              -------             -------
 Total cost of revenues     $39,231     56.6%    $50,873     67.8%   $71,634     82.4%
                            =======              =======             =======
</TABLE>

Cost of Software License Revenues. Cost of software license revenues consists
primarily of license fees paid with respect to embedded third-party software
included with the licenses of the Company's software and, occasionally, the
cost of third-party complementary software that is licensed together with the
Company's software without being embedded. In addition, third parties may
receive royalty commissions for participation in the sales process. Cost of
software license revenues was $1.3 million, $1.9 million, and $2.2 million,
in fiscal 2001, 2000, and 1999, representing 9.9%, 15.7%, and 13.0% of
software license revenues, respectively.  The cost of software license
revenues in fiscal 2000 was higher as a percentage of software licenses
revenues than in either fiscal 2001 or fiscal 1999 due to a higher proportion
of licenses being sold together with third-party integrators where a royalty
commission is paid to the integrator for assistance in the selling process
during that year.

Cost of Service and Maintenance Revenues. Cost of service and maintenance
revenues consists primarily of costs associated with consulting,
implementation, and training services and the use by the Company of third-
party consultants to perform implementation services for the Company's
customers. Cost of service and maintenance revenues also includes the cost of
providing software maintenance to customers, such as telephone hotline
support. Cost of service and maintenance revenues was $37.4 million, $48.5
million, and $68.7 million in fiscal 2001, 2000, and 1999, representing
70.1%, 79.1%, and 100.6%, of service and maintenance revenues, respectively.
The decreases in the cost of service and maintenance revenues in absolute
dollar amounts in fiscal 2001 from fiscal 2000 and in fiscal 2000 from fiscal
1999 were due to reductions in workforce through layoffs and attrition
initiated during the fourth quarter of fiscal 1999, a reduction in the use of
outside consultants, and a decrease in the amount of service and maintenance
performed. In fiscal 1999, the cost of service and maintenance revenues in
absolute dollars and as a percentage of service and maintenance revenues were
unusually large as a result of significant one-time charges related to
ongoing implementation projects and charges made for doubtful accounts
receivable during the year.

Cost of Other Revenues. Cost of other revenues consists primarily of the cost
of third party hardware supplied to certain customers. Cost of other revenues
was $0.5 million, $0.4 million, and $0.8 million in fiscal 2001, 2000, and
1999, representing 20.3%, 27.9%, and 44.3% of other revenues, respectively.
The Company expects the cost of other revenues to continue to fluctuate on a
period to period basis due to the size and nature of specific hardware sales.

Product Development. Product development expenses consist primarily of
salaries and other related costs for the Company's product development staff.
Product development expenses were $15.5 million, $17.8 million, and $24.3
million in fiscal 2001, 2000, and 1999, representing 22.3%, 23.7%, and 27.9%
of total revenues, respectively. The decreases in product development
expenses in absolute dollar amount in fiscal 2001 from fiscal 2000 and in
fiscal 2000 from fiscal 1999 were due to a decrease in the number of product
development personnel and other related costs as part of the restructuring
program initiated in fourth quarter 1999. Also, in fiscal 1999 the Company
paid high external costs related to specific product development initiatives
and incurred one-time costs for the expansion of System ESS functionality in
the consumer product sector.

Software development costs incurred in the product development of new
software products are expensed as incurred until technological feasibility
has been established. To date, the establishment of technological feasibility
of the Company's products and general release have substantially coincided.
As a result, the Company has not capitalized any software development costs
since such costs have been immaterial.

Acquired in-process research and development. Acquired in-process research
and development consists of one-time charges for acquisitions accounted for
as purchases. The Company had one acquisition in fiscal 1999, the acquisition
of Abalon AB, resulting in the write-off of acquired in-process research and
development of $2.5 million. The $2.5 million as determined by an independent
third-party appraisal related to in-process research and development which
was charged against income in fiscal 1999 as the underlying research and
development projects had not reached technological feasibility for Abalon's
intended purpose and had no alternative future uses for the Company. The
Company did not have any write-off of acquired research and development in
fiscal 2001 or 2000.

Sales and Marketing. Sales and marketing expenses include personnel costs,
commissions, and related costs for sales and marketing personnel, as well as
the cost of office facilities, travel, promotional events, and public
relations programs. Sales and marketing expenses were $15.9 million, $20.6
million, and $27.3 million in fiscal 2001, 2000, and 1999, representing
22.9%, 27.4%, and 31.4% of total revenues, respectively. Sales and marketing
expenses decreased in fiscal 2001 from fiscal 2000 and in fiscal 2000 from
fiscal 1999 in absolute dollar amount and as a percentage of total revenues
as a result of measures initiated in the fourth quarter of fiscal 1999 to
reduce costs in response to market conditions for new software licenses.

General and Administrative. Ongoing general and administrative expenses
consist primarily of salaries and costs of the Company's finance, human
resources, information systems, administrative, and executive staff and the
fees and expenses associated with legal, accounting, and other requirements.
General and administrative expenses were $9.0 million, $9.3 million, and
$12.3 million in fiscal 2001, 2000, and 1999, representing 13.0%, 12.3%, and
14.2% of total revenues, respectively. The decreases in absolute dollar
amounts of general and administrative expenses in fiscal 2001 from fiscal
2000 and in fiscal 2000 from fiscal 1999 were primarily the result of
decreased staffing of accounting, human resources, and internal system
administration associated with the restructuring program initiated in the
fourth quarter of fiscal 1999. The increase in general and administrative
expenses in fiscal 2001 from fiscal 2000 as a percentage of total revenues
was primarily the result of the decrease in total revenues over the same
period.

Amortization of goodwill and other intangibles. Amortization of goodwill
and other intangibles relates to the fiscal 1998 acquisition of Ceratina
International AB, the fiscal 1999 acquisition of Abalon AB, and the fiscal
2001 acquisition of IMOY. Goodwill and other intangibles is amortized over a
5 to 10 year period. Amortization of goodwill and other intangibles was $4.5
million in fiscal 2001, $3.0 million of which consisted of a write-down for
goodwill relating to the Abalon acquisition.  The write-down was based upon
an outside appraisal which showed that the value of such goodwill had
declined since the date of the acquisition.  Amortization of goodwill and
other intangibles was $1.4 million, and $0.5 million in fiscal 2000 and 1999,
respectively.

Restructuring costs. In April, 2001, the Company announced a reorganization
of its operations into four regional units each made up of sales, services,
support, and operations staff.  In connection with the reorganization, the
Company took a restructuring charge of $5.4 million consisting primarily of
employee severance costs, lease termination expenses, and write-downs of
certain property and equipment.  In the third quarter of fiscal 1999, based
upon the Company's view that there was a contraction in the market for
enterprise software products generally and in the growth of the Company's
business, the Company realigned its cost structure and incurred a $3.5
million one-time restructuring charge in the fourth quarter. The components
of the charge consisted mainly of employee severance costs and the costs
related to closing sales offices and other facilities, and as of April 30,
2001, accrual for this restructuring had been fully utilized.

Other Income (Expense). Other income (expense) comprises interest income,
interest expenses, and miscellaneous income and expenses. Interest income was
approximately $1.6 million, $2.2 million, and $4.4 million in fiscal 2001,
2000, and 1999, respectively. The decreases year to year were due to
decreases in the levels of short-term investments and cash held in interest-
bearing accounts compared to the amounts invested in prior years.  Interest
expenses were approximately $13,000, $65,000, and $128,000 in fiscal 2001,
2000, and 1999, respectively. The decreases were the result of the lower
outstanding balance of notes payable and capital lease obligations.

Provision (Benefit) for Income Taxes. In April, 2001, the Company recorded
and additional valuation allowance against its remaining deferred tax asset
by increasing the valuation allowance by $15.4 million based upon its
continuing non-profitable operations and inability to predict when this asset
could be realized.  This resulted in a charge to income for the year ended
April 30, 2001, equal to the increase in the valuation allowance.  There was
no provision (benefit) for income taxes for the year ended April 30, 2000, as
the Company applied a full valuation allowance to deferred tax assets
generated after April 30, 1999.  At April 30, 2001, the Company's deferred
tax asset amounted to $30.8 million of which $29.3 million related to net
operating loss carryforwards and $1.5 million related to other temporary
differences, however after applying the valuation allowance, the net deferred
tax asset at April 30, 2001, was $0. Of the net operating loss carryforwards,
$12.0 million were incurred in the United States and $11.8 million were
incurred in Sweden.  The net operating loss carryforwards, of which
substantially all were incurred during the years ended April 30, 2001, 2000,
and 1999, may be carried forward to offset future income up to 15 years in
the United States and indefinitely in Sweden.

Hedge Transaction.  During November, 2000, the Company entered into a hedge
transaction with a Bank to offset potential Swedish social security fee
liability upon exercise of stock options by employees living in Sweden.  The
arrangement involved the issuance by the Bank of a call to the Company
settleable in cash, which the Bank elected to cover by purchasing shares of
the Company's Common Stock.  The Company offset a portion of the cost of the
call by issuing to the Bank a right to put shares of Company Common Stock to
the Company.  Gain or loss to the Company on the closing of the transaction
will be realized based upon the increase or decrease in the price of the
Company's Common Stock.  As a result of the decline in the value of the
Company Common Stock, as of April 30, 2001, the Company recorded a non-
operating charge of $1.4 million relating to the put issued to the Bank. This
charge will be reviewed quarterly and adjusted to reflect the underlying
Common Stock value and will be reversed in full if the price of the Common
Stock reaches $4.536 per share, which is the exercise price of the put. On
April 30, 2001, the exercise price of the call option ($4.536) used to hedge
potential Swedish social security fees was above the market price of the
Company's Common Stock. Since there was no active market for these types of
options, the value of the call option was limited to a calculated option
premium, which was offset in the financial statements by the corresponding
premium on the put option. The original net premium of $50,000 will be
amortized over the 5-year term of the options.  The number of shares of
Company Common Stock subject to the call at any given time, which depends on
the number of options outstanding from time to time, is presently 450,000 and
is not expected to exceed that number.  It is anticipated that the hedge
transaction will be open for several years.  As part of that transaction, the
Company deposited $2.1 million with the Bank and recorded a non-current asset
in that amount.

LIQUIDITY AND CAPITAL RESOURCES

Since its inception, the Company has financed and met its capital expenditure
requirements through cash flows from operations, short-term borrowings, and,
during fiscal 1997 and fiscal 1998, through sales of equity securities to the
public. Cash used in operations was $1.0 million, $17.6 million, and $35.8
million in fiscal 2001, 2000, and 1999, respectively.  Repayments of
borrowings were $0.6 million and $1.8 million in fiscal 2000 and 1999.  Cash
flows from issuance of common stock were $0.9 million, $0.8 million, and $1.9
million in fiscal 2001, 2000, and 1999, respectively. The Company purchased
approximately $3.1 million, $4.5 million, and $4.7 million, of office
equipment and other property in fiscal 2001, 2000, and 1999, respectively. At
April 30, 2001, the Company did not have any material commitments for capital
expenditures.

At April 30, 2001, the Company had $16.5 million of working capital as
compared to $32.7 million of working capital at April 30, 2000. Current
assets at April 30, 2001, include $12.1 million in cash and cash equivalents
and $12.9 in short term investments. The decrease in working capital from
April 30, 2000, to April 30, 2001, was primarily the result of decreases in
accounts receivable and short term investments reflecting the operating loss
for the fiscal year.

Accounts receivable, net of allowance for doubtful accounts, decreased to
$11.0 million at April 30, 2001, from $20.2 million at April 30, 2000.
Contract receivables, primarily scheduled amounts due from customers,
increased to $1.9 million at April 30, 2001, from $1.1 million at April 30,
2000. The allowance for doubtful accounts decreased to $1.1 million at April
30, 2001, from $2.5 million at April 30, 2000, as a result of settling an
agreement with a particular customer.  A significant portion of the amount
remaining in the reserve for doubtful accounts relates to an ongoing dispute
with another customer.

The Company believes that its existing cash and cash equivalent balances,
short-term investment balances, and anticipated cash flow from operations
will satisfy the Company's working capital and capital expenditure
requirements for at least the next 12 months. However, any material
acquisitions of complementary businesses, products, or technologies could
require the Company to obtain additional sources of financing.

QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

Except for the transaction referred to above under the heading "Hedge
Transaction", the Company does not believe it is exposed to market risks with
respect to any of its investments; the Company does not utilize market rate
sensitive instruments for trading of other purposes. As of April 30, 2001,
the Company had no long-term investments and its short-term investments
consisted of two Federal Agency securities with maturities of less than one
year.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this item is included in Part IV Item 14 (a)(1)
and (2).

ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

None.



                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Reference is made to the information to be set forth in the 2001 Proxy
Statement under the caption "Election of Directors".

ITEM 11. EXECUTIVE COMPENSATION

Reference is made to the information to be set forth in the 2001 Proxy
Statement under the caption "Executive Compensation."

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Reference is made to the information to be set forth in the 2001 Proxy
Statement under the caption "Ownership of Common Stock."

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

Reference is made to the information to be set forth in the 2001 Proxy
Statement under the caption "Certain Business Relationships."

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

      (a) Documents filed as a part of this Report:

      (1) Consolidated Financial Statements. The following consolidated
financial statements of Industri-Matematik International Corp. are filed as
part of this report:

      Report of Independent Accountants dated July 27, 2001

      Consolidated Balance Sheets as of April 30, 2001, and April 30, 2000

      Consolidated Statements of Operations for the years ended April 30,
2001, 2000, and 1999.

      Consolidated Statements of Changes in Stockholders' Equity for the
years ended April 30, 2001, 2000, and 1999.

      Consolidated Statements of Cash Flows for the years ended April 30,
2001, 2000, and 1999.

      Notes to Consolidated Financial Statements.

      Schedules other than those listed above are omitted for the reason that
they are not required, are not applicable, or the required information is
shown in the Consolidated Financial Statements or Notes thereto.

      Individual financial statements of the Company and its subsidiaries are
omitted because all subsidiaries included in the Consolidated Financial
Statements are 100% owned.

      (b) No reports on Form 8-K have been filed by the Company during the
last quarter of the period covered by this Report.

      Schedules other than the one listed above are omitted because they are
not required or are not applicable, or the required information is shown in
the consolidated financial statements or notes thereto contained in this
Annual Report on Form 10-K.

     (c) Exhibits

The exhibits required by Item 601 of Regulation S-K are listed below and are
filed or incorporated by reference as part of this Annual Report on Form 10-
K.

Number Description
------ -----------

3.1    Amended and restated Certificate of Incorporation of the Company(1)
3.2    Amended and Restated By-Laws of the Company(2)
10.1   Registration and Expense Agreement among the Company, Martin
       Leimdorfer, and Warburg Pincus Investors, L.P.(1)
10.2   Registration Rights Agreement among the Company, Martin Leimdorfer,
       and Warburg Pincus Investors, L.P.(1)
10.3   Stock Option Plan of the Company(1)
10.4   Form of Agreements of Restricted Stock Program(1)
10.5   Employee Stock Purchase Plan of the Company, as amended(3)
10.6   1998 Stock Option Plan of the Company(3)
10.7   Transferable Stock Option Plan of the Company(4)
10.8   Amended and Restated Employment Agreement dated April 3, 1997 between
       Stig Durlow and the Company(5)
10.9   Lease Agreement dated August 1, 1999, between Tranboclarne 11 KB, as
       Lessor, and Industri-Matematik AB, as Lessee(6)
10.10  Form of Indemnity Agreement with Officers and Directors(1)
21     Subsidiaries of the Company
23     Consent of Independent Accountants

(1) Incorporated by reference from the Exhibits to the Company's Registration
Statement on Form S-1 (No. 333-5495).

(2) Incorporated by reference from the Exhibits to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended July 31, 2000.

(3) Incorporated by reference from the Exhibits to the Company's Registration
Statement on Form S-8 (No. 333-81905).

(4) Incorporated by reference from the Exhibits to the Company's Registration
Statement on Form S-8 (No. 333-60876).

(5) Incorporated by reference from the Exhibits to the Company's Annual
Report on Form 10-K for the fiscal year ended April 30, 1997.

(6) Incorporated by reference from the Exhibits to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended January 31, 2000.

      (d) Financial Statement Schedules

      None.



                        REPORT OF INDEPENDENT ACCOUNTANTS

The Board of Directors and Stockholders of Industri-Matematik International
Corp.

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statement of operations, comprehensive income, stockholders'
equity, and cash flows present fairly, in all material respects, the
financial position of Industri-Matematik International Corp. and its
subsidiaries at April 30, 2001 and April 30, 2000 and the results of their
operations and their cash flows for each of the three years in the period
ended April 30, 2001, in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the Company's management; our responsibility is to express
an opinion on these statements based on our audits. We conducted our audits
of these statements in accordance with auditing standards generally accepted
in the United States of America, which require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

PricewaterhouseCoopers AB

BY: /s/ ROBERT BARNDEN
    Robert Barnden

Stockholm, Sweden
July 27, 2001


<PAGE>


<TABLE>
             INDUSTRI-MATEMATIK INTERNATIONAL CORP. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                 (in thousands, except share and per share data)
                                                                      April 30,
                                                                    2001      2000
ASSETS
<S>                                                              <C>         <C>
Current assets:
  Cash and cash equivalents....................................  $  12,053   $ 12,036
  Short-term investments.......................................     12,866     19,821
  Accounts receivable, less allowance for doubtful accounts
  of $1,143 and $2,486 at April 30, 2001 and 2000, respectively     10,952     20,176
  Contract receivables.........................................      1,861      1,089
  Prepaid expenses.............................................      1,726      2,727
  Income taxes receivable......................................        217        646
  Other current assets.........................................        640        698
                                                                 ---------  ---------
     Total current assets......................................     40,315     57,193
                                                                 =========  =========
Non current assets:
  Property and equipment, net..................................      4,753      6,595
  Deferred income taxes........................................          -     15,520
  Goodwill and other intangible assets.........................      3,739      8,359
  Long-term cash deposit.......................................      2,794          -
  Other non current assets.....................................        909      1,265
                                                                 ---------  ---------
     Total non current assets..................................     12,195     31,739
                                                                 ---------  ---------
          Total assets.........................................  $  52,510   $ 88,932
                                                                 =========  =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of notes payable.............................         --        303
  Accounts payable.............................................      1,129      2,031
  Accrued expenses and other current liabilities...............      8,071      7,978
  Accrued payroll and employee benefits........................      7,595      5,702
  Deferred revenue.............................................      7,045      8,529
                                                                 ---------  ---------
     Total current liabilities.................................     23,840     24,543
                                                                 =========  =========
Long-term liabilities:
  Accrued pension liability....................................      2,880      2,930
                                                                 ---------  ---------
     Total long-term liabilities...............................      2,880      2,930
                                                                 ---------  ---------
     Total liabilities.........................................  $  26,720  $  27,473
                                                                 =========  =========

Commitments and contingencies (Note 14)
Stockholders' equity:
  Common Stock; $.01 par value; 75,000,000 shares authorized;
   32,274,265 and 31,839,229 issued and outstanding Preferred
   Stock; $0.01 par value; 15,000,000 shares authorized;
   0 and 0 issued and outstanding                                      323        318
  Additional paid-in capital...................................    125,206    124,310
  Retained earnings (deficit)..................................    (88,022)   (52,771)
  Accumulated other comprehensive loss.........................     (5,835)    (4,476)
  Notes receivable from stockholders (Note 13).................     (5,882)    (5,922)
                                                                 ---------  ---------
     Total stockholders' equity................................     25,790     61,459
                                                                 ---------  ---------
     Total liabilities and stockholders' equity................  $  52,510   $ 88,932
                                                                 =========   ========

The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
<TABLE>



            INDUSTRI-MATEMATIK INTERNATIONAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in thousands, except share and per share data)

                                                    Year Ended April 30,
                                                 2001         2000        1999
<S>                                            <C>         <C>         <C>
Revenues:
  Licenses .................................   $ 13,478    $ 12,167    $ 17,039
  Services and maintenance .................     53,313      61,318      68,233
  Other ....................................      2,564       1,540       1,696
                                               --------    --------    --------
     Total revenues ........................     69,355      75,025      86,968
                                               ========    ========    ========
Cost of revenues:
  Licenses .................................      1,336       1,916       2,212
  Services and maintenance .................     37,375      48,528      68,670
  Other ....................................        520         429         752
                                               --------    --------    --------
     Total cost of revenues ................     39,231      50,873      71,634
                                               --------    --------    --------
     Gross profit ..........................     30,124      24,152      15,334
                                               --------    --------    --------
Operating expenses:
  Product development ......................     15,479      17,784      24,267
  Acquired in-process research and
  development ..............................         --          --       2,500
  Sales and marketing ......................     15,878      20,555      27,295
  General and administrative ...............      9,026       9,251      12,332
  Amortization of goodwill and other intangibles  4,506       1,383         486
  Restructuring ............................      5,391          --       3,522
                                               --------    --------    --------
     Total operating expenses ..............     50,280      48,973      70,402
                                               --------    --------    --------
Loss from operations .......................    (20,156)    (24,821)    (55,068)
                                               ========    ========    ========
Other income (expense):
  Interest income ..........................      1,561       2,183       4,446
  Interest expense .........................        (13)        (65)       (128)
  Miscellaneous expense, net ...............     (1,219)        (96)       (931)
                                               --------    --------    --------
Loss from continuing operations
  before income taxes ......................    (19,827)    (22,799)    (51,681)
(Provision) benefit for income taxes .......    (15,424)         --      16,422
                                               --------    --------    --------
Net loss ...................................   $(35,251)   $(22,799)   $(35,259)
                                               ========    ========    ========

Net loss per share data: (Note 2)
Net loss per share .........................   $  (1.10)   $  (0.72)   $  (1.09)
                                               ========    ========    ========

Net loss per share data assuming dilution:
Net loss per share .........................   $  (1.10)    $ (0.72)   $  (1.09)
                                               ========    ========    ========
Weighted average shares outstanding, basic
  and diluted .............................. 31,985,991  31,671,870  32,431,260
                                             ----------  ----------  ----------


The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>





             INDUSTRI-MATEMATIK INTERNATIONAL CORP. AND SUBSIDIARIES
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                        (in thousands, except share data)
<TABLE>
                                                                                Accumulated     Notes        Total
                                               Class B  Additional   Retained      Other      Receivable     Stock
                      Comprehensive   Common   Common    Paid-in     Earnings  Comprehensive    From        holders'
                      Income (Loss)    Stock    Stock    Capital     (Deficit)     Loss      Stockholders   Equity

<S>                      <C>            <C>      <C>      <C>         <C>         <C>          <C>          <C>
Balance as of
  April 30, 1998         9,237          329       --     127,886       5,287      (2,426)      (6,503)     124,573
                         =====
Issuance of 11,000 shares
  of Common Stock under
  Stock Option Plan                                          112                                               112

Issuance of 65,000 shares
  of Common Stock under
  Restricted Stock Program                1                  389                                 (390)           0

Issuance of 344,562 shares
  of Common Stock under ESPP              3                1,728                                             1,731

Repurchase of 1,838,766
  sharesof Common Stock                 (18)              (6,244)                                           (6,262)

Income tax benefit arising
  from stock compensation
  plans                                                       74                                                74

Net income             (35,259)                                      (35,259)                              (35,259)

Currency translation
  adjustment            (1,088)                                                   (1,088)                   (1,088)

          --------------------------------------------------------------------------------------------------------
Balance as of
  April 30, 1999     $ (36,267)       $ 315     $ --   $ 123,945   $ (29,972)   $ (3,514)    $ (6,893)    $ 83,881
                       =======

Issuance of 105,097 shares
  of Common Stock under
  Stock Option Plan                       1                  363                                               364

Issuance of 234,784 shares
  of Common Stock under
  under ESPP                              2                  477                                               479

Payments on notes
  receivable                                                (475)                                 971          496

Net income             (22,799)                                      (22,799)                              (22,799)

Currency translation
  adjustment              (962)                                                     (962)                     (962)

          --------------------------------------------------------------------------------------------------------
Balance as of
  April 30, 2000     $ (23,761)       $ 318     $ --   $ 124,310   $ (52,771)   $ (4,476)    $ (5,922)    $ 61,459
                       ========         ===      ===     =======     ========     =======      =======      ======

Issuance of 151,900 shares
  of Common Stock under
  Stock Option Plan                       2                  304                                               306

Issuance of 284,756 shares
  of Common Stock under
  under ESPP                              3                  592                                               595

Payments on notes
  receivable                                                                                       40           40

Net income             (35,251)                                      (35,251)                              (35,251)

Currency translation
  adjustment            (1,359)                                                   (1,359)                   (1,359)

          --------------------------------------------------------------------------------------------------------
Balance as of
  April 30, 2001     $ (36,610)       $ 323     $ --   $ 125,206   $ (88,022)   $ (5,835)    $ (5,882)    $ 25,790
                       ========         ===      ===     =======     ========     =======      =======      ======

The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>




<TABLE>
             INDUSTRI-MATEMATIK INTERNATIONAL CORP. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                                               Year Ended April 30,
                                                           2001         2000         1999
<S>                                                    <C>          <C>          <C>
Cash flows from operating activities:
  Net income (loss) ................................   $ (35,251)   $ (22,799)   $ (35,259)
  Adjustments to reconcile net income (loss) to
  net cash provided by (used in) operating
  activities:
   Acquired in-process research and development ....          --           --        2,500
   Depreciation and amortization ...................       4,291        5,313        3,564
   Provision for doubtful accounts .................      (1,421)       2,382        4,618
   Deferred income taxes ...........................      15,424           --      (16,377)
   Accrued interest on short-term investments ......          --           14         (128)
   (Gain) loss on disposal of property and
        equipment...................................          16           91           (6)
   (Gain) loss on disposal of other shares .........          --           (6)         658
   Write-down of other shares ......................          --           --        1,000
   Write-down of property and equipment ............       1,576        1,164          109
   Write-down of goodwill and other intangibles.....       3,010           --           --
   Changes in operating assets and liabilities:
     Accounts receivable ...........................       9,738          696       (3,341)
     Accrued receivables and prepaid expenses ......        (175)        (543)      (1,739)
     Income taxes ..................................          --           26         (241)
     Other assets ..................................         203         (537)          39
     Accounts payable ..............................        (778)      (1,414)         355
     Accrued expenses and other current liabilities          761       (6,149)       5,327
     Accrued payroll and employee benefits and
         deferred revenue ..........................       1,274        3,530         (892)
     Accrued pension liability .....................         353          640          537
                                                       ---------    ---------    ---------
   Net cash flows provided by (used in)
    operating activities ...........................        (979)     (17,592)     (35,798)
                                                       ---------    ---------    ---------

Cash flows from investing activities:
  Purchase of short-term investments ...............    (118,640)    (128,577)    (187,800)
  Proceeds from sale of short-term investments .....     125,595      133,599      232,495
  Additions to property and equipment ..............      (3,057)      (4,502)      (4,694)
  Long-term cash deposit............................      (2,786)          --           --
  Payment for Ceratina .............................          --         (658)        (178)
  Payment for Abalon ...............................          --                    (9,500)
  Proceeds from sale of property and equipment .....          15           80          128
  Proceeds from sale of other shares ...............          --            6            1
  Collection of notes receivable ...................          40          456           --
                                                       ---------    ---------    ---------
   Net cash flows provided by investing activities .       1,167          395       30,452
                                                       ---------    ---------    ---------
Cash flows from financing activities:
  Proceeds from notes payable ......................                       --         (828)
  Payments on notes payable ........................        (303)        (534)        (362)
  Principal payments on capital lease obligations ..          --          (61)        (564)
  Issuance of Common Stock .........................         901          843        1,850
  Repurchase and retirement of Common Stock ........          --           --       (6,270)
  Other ............................................        (242)         374       (1,219)
                                                       ---------    ---------    ---------
   Net cash flows provided by (used in) financing
      activities ...................................         356          622       (7,393)
                                                       ---------    ---------    ---------
Translation differences on cash and cash
  equivalents ......................................        (527)        (454)        (178)
                                                       ---------    ---------    ---------
Net increase (decrease) in cash and cash equivalents          17      (17,029)     (12,917)
Cash and cash equivalents at beginning of year .....      12,036       29,065       41,982
                                                       ---------    ---------    ---------
Cash and cash equivalents at end of year ...........   $  12,053    $  12,036    $  29,065
                                                       =========    =========    =========

Supplemental disclosures of cash flow information: Cash paid during the year
for:
  Interest .........................................   $      11    $      62    $     220
                                                       =========    =========    =========
  Income taxes .....................................   $     526    $     505    $     741
                                                       =========    =========    =========

The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>





             INDUSTRI-MATEMATIK INTERNATIONAL CORP. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Nature of Business and Organization

      Industri-Matematik International Corp. ("IMIC"), a Delaware
corporation, and its subsidiaries (collectively, "Company"), develop, market,
implement, and support client/server supply chain and customer relationship
management software. The Company's primary software products have been
designed to provide for the complex and high throughput order fulfillment
requirements of manufacturers, distributors, and wholesalers and their
customer relationships.  IMIC has operating subsidiaries located and
primarily conducts business in the United States, Sweden, the United Kingdom,
the Netherlands, and Australia.

      IMIC was formed on May 1, 1995 as the parent of Industri-Matematik AB
("IMAB"), a company domiciled in Sweden, pursuant to a corporate
reorganization.  The reorganization was effected by issuing all the shares of
IMIC's stock to the stockholders of IMAB based upon the number and class of
shares of IMAB owned by each in exchange for all of the outstanding stock of
IMAB. The reorganization was accounted for in a manner similar to a pooling-
of-interests.

2. Significant Accounting Policies

Principles of Consolidation

      The consolidated financial statements include the accounts of IMIC and
its subsidiaries. All significant intercompany accounts and transactions have
been eliminated in consolidation.

Revenue Recognition

      License revenues represent sales of the Company's software. Service
revenues represent sales from consulting implementation and training
services.  Annual maintenance and support revenues consist of ongoing support
and sales of product updates. Other revenues primarily represent hardware
sales.

      Revenue is recognized when persuasive evidence of an arrangement exists
and delivery has occurred, the fee is fixed and determinable, collectibility
is probable and the arrangement does not require significant customization of
the software. Revenue on multiple element arrangements is allocated to the
various elements based on fair values specific to the Company.  Maintenance
and support revenue is deferred and recognized ratably over the term of the
agreement, generally one year. Service revenue is recognized as the Company
performs the services in accordance with the contract.

      In a multiple element arrangement when fair value does not exist for
one or more of the undelivered elements in the arrangement, the Company
recognizes revenue using the "residual method" in accordance with Statement
of Position 98-9, "Software Revenue Recognition in Respect to Certain
Arrangements" issued by the American Institute of Certified Public
Accountants. Under the "residual method", the total fair value of the
undelivered elements is deferred. The difference between the total
arrangement fee and the amount deferred for the undelivered elements is
recognized as revenue related to the delivered elements.

      Under the terms of the Company's License Agreements and Professional
Service Agreements, in general the only warranties provided are that the
software will function in accordance with the applicable software
documentation by a specified date. As these warranties are effective for a
very limited time period and historically the Company has not had any
significant warranty claims, the Company's policy has been to record no
warranty provision upon the recognition of license revenues. In addition, due
to the Company's insignificant product returns and price adjustments in past
years, no provision is made for product returns and price adjustments upon
recognition of software license revenues. The Company reviews on a project by
project basis the cost of claims that it considers to be "warranty" type
claims under Professional Services Agreements by establishing project
reserves. The Company will continue to evaluate the need for recording a
warranty provision upon recognition of software license revenues and delivery
of customer modification work.

Product Development Costs

      Software development costs are accounted for in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 86, "Accounting for
the Costs of Computer Software to be Sold, Leased or Otherwise Marketed."

      Costs incurred in the product development of new software products are
expensed as incurred until technological feasibility has been established. To
date, the establishment of technological feasibility of the Company's
products and general release substantially coincide. As a result, the Company
has not capitalized any software development costs since such costs have been
immaterial.

Property and Equipment

      Property and equipment are stated at cost, net of accumulated
depreciation and amortization. Depreciation and amortization are computed
using the straight-line method based upon estimated useful lives of the
assets as follows:

                                       Estimated useful lives

      Computer equipment                   3 years
      Furniture and fixtures               3 to 10 years
      Automobiles                          3 years
      Leasehold improvements               5 years
      Software acquired                    1 to 3 years

      Equipment purchased under capital leases is amortized on a straight-
line basis over the lesser of the estimated useful life of the asset or the
lease term.

      Upon retirement or sale of property and equipment, cost and accumulated
depreciation on such assets are removed from the accounts and any gains or
losses are reflected in the statement of operations. Maintenance and repairs
are charged to expense as incurred.

Goodwill and Other Intangibles

      Goodwill represents the excess of cost over the fair value of net
assets acquired and is amortized using the straight-line method over a period
of 10 years.  Other intangibles are comprised of acquisition costs of
developed technology, assembled workforce, and customer lists which are
amortized using the straight-line method over a period of 5 years.  The
Company reviews the carrying value of goodwill and other intangibles for
impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable.

Long-lived assets

      The Company identifies and records impairment losses, as circumstances
dictate, on long-lived assets used in operations when events and
circumstances indicate that the assets might be impaired and the undiscounted
cash flows estimated to be generated by those assets are less than the
carrying amounts of those assets.

Foreign Currency Translation

      The functional currency of IMIC's foreign subsidiaries is the
applicable local currency. The translation from the respective foreign
currencies to U.S. dollars is performed for balance sheet accounts using
current exchange rates in effect at the balance sheet date and for income
statement accounts using a weighted average exchange rate during the period.
Gains or losses resulting from such translation are included as a separate
component of accumulated other comprehensive loss. Gains or losses resulting
from foreign currency transactions are included in miscellaneous income
(expense). For the years ended April 30, 2001, 2000, and 1999, foreign
exchange gains (losses) of $380,000, $136,000 and, $163,000 respectively,
were recorded by the Company.

Concentration of Risk

      Financial instruments which potentially subject the Company to
concentrations of credit risk consist principally of accounts receivable with
customers and short-term investments. Credit risk with respect to accounts
receivable, however, is limited due to the number of customers comprising the
Company's customer base and their dispersion principally across the United
States, Scandinavia, the United Kingdom, the Netherlands, and Australia. The
Company's customers are generally multi-national companies in the food and
beverage, pharmaceutical, consumer electronics, automotive parts, and
industrial sector industries. The Company performs ongoing credit evaluations
of its customers and does not require collateral. The Company maintains
allowances for potential credit losses. Short-term investments are placed
with high credit quality financial institutions or in short-duration, high
quality debt securities.

      A significant portion of the Company's business is conducted in
currencies other than the U.S. dollar (the currency in which its financial
statements are stated), primarily the Swedish krona and, to a lesser extent,
the U.K. pound sterling, the Dutch guilder, the German mark, the French
franc, the Australian dollar, and the Canadian dollar. The Company incurs a
significant portion of its expenses in Swedish krona, including a significant
portion of its product development expenses and a substantial portion of its
general and administrative expenses. As a result, appreciation of the value
of the Swedish krona relative to the other currencies in which the Company
generates revenues, particularly the U.S. dollar, could adversely affect
operating results. The Company does not currently undertake hedging
transactions to cover its currency exposure, but the Company may choose to
hedge a portion of its currency exposure in the future as it deems
appropriate.

      License and service and maintenance revenues related to the Company's
software products have represented a substantial portion of the Company's
revenues in recent years and are expected to continue to represent a
substantial portion of the Company's revenues in the future. The Company's
success depends on continued market acceptance of its VIVALDI suite of
software (which incorporated the components of its System ESS software) and
services as well as the Company's ability to introduce new versions of
software or other products to meet the evolving needs of its customers.

Cash, Cash Equivalents and Short-Term Investments

      The Company considers all highly liquid, low risk debt instruments
purchased with original maturity dates of three months or less to be cash
equivalents.  The Company's short-term investments comprise fixed income
securities with original maturities of more than 90 days at the time of
purchase. The Company has classified its short-term investments in fixed
income securities as available-for-sale securities, which are carried at
their fair value based upon the quoted market prices of those investments at
April 30, 2000, and 2001. Accordingly, the change in unrealized gains and
losses with respect to these securities is recorded as a direct increase or
decrease in stockholders' equity, net of deferred income tax, if any. (See
Note 3.)

      Fixed income securities available for sale are purchased with the
original intent to hold to maturity, but which may be available for sale if
market conditions warrant, or if the Company's investment policies dictate,
in order to maximize the Company's investment yield. Realized gains and
losses are included in earnings and are derived using the specific
identification method for determining the cost of securities sold. When
impairment of the value of an investment is considered other than temporary,
the decrease in value is reported in earnings as a realized investment loss
and a new cost basis is established.

Contract Receivables

      Contract receivables are primarily scheduled amounts due from customers
on terms which are longer than typical trade terms.

Use of Estimates

      The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
contingent liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting years. Actual
results could differ from those estimates.

Comprehensive Income

Effective May 1, 1998, the Company adopted Statement of Financial Standard
("SFAS") No. 130, "Reporting Comprehensive Income". SFAS No. 130 establishes
standards for reporting and displaying comprehensive income and its
components. "Comprehensive income" includes foreign currency translation
gains and losses that have been previously excluded from net income and
reflected instead in equity. The Company has reported the components of
comprehensive income on its consolidated statements of stockholders' equity.

Net Income (Loss) Per Share

      Net income (loss) per share amounts have been computed in accordance
with SFAS No. 128, "Earnings per Share". For each of the periods presented,
net income (loss) per share amounts were computed based on the weighted
average number of shares of common stock outstanding during the period. Net
income (loss) per share - assuming dilution amounts were computed based on
the weighted average number of shares of common stock and potential common
stock outstanding during the period. Potential common stock relates to stock
options outstanding for which the dilutive effect is calculated using the
treasury stock method. The computations of net loss per share-assuming
dilution for the years ended April 30, 2001, 2000, and 1999 do not assume the
exercise of stock options since the effect would be antidilutive as a result
of the losses for those fiscal years.

      For each of the periods presented, income available to common
shareholders (the numerator) used in the computation of net income (loss) per
share was the same as the numerator used in the computation of net income
(loss) per share assuming dilution. A reconciliation of the denominators used
in the computations of net income (loss) per share and net income (loss) per
share assuming dilution is as follows:

                                                 Year Ended April 30,
                                            2001         2000         1999
Weighted average shares outstanding ..   31,985,991   31,671,870   32,431,260
Effect of dilutive stock options .....           --           --           --
                                         ----------   ----------   ----------
Adjusted weighted average shares
outstanding assuming dilution ........   31,985,991   31,671,870   32,431,260
                                         ==========   ==========   ==========

Cash Flow Information

      Cash flows in foreign currencies have been converted to U.S. dollars at
an approximate weighted average exchange rate.

Fair Value of Financial Instruments

      The Company discloses the estimated fair values for all financial
instruments for which it is practicable to estimate fair value.  Financial
instruments including cash and cash equivalents, receivables and payables,
deferred revenue, and current portions of long-term debt are deemed to
approximate fair value due to their short maturities.  The carrying amount of
long-term debt with banks and capitalized lease obligations are also deemed
to approximate their fair values.

Income taxes

      The Company recognizes deferred tax assets and liabilities for the
future tax consequences attributable to differences between the financial
statement carrying amounts of existing assets and liabilities and their
respective tax bases.  Deferred tax assets and liabilities are measured by
applying enacted statutory tax rates that are applicable to the future years
in which deferred tax assets or liabilities are expected to be settled or
realized, to the differences between the financial statement carrying amount
and the tax bases of existing assets and liabilities.  The effect of a change
in tax rates on deferred tax assets and liabilities is recognized in net
income in the period in which the tax rate change is enacted. The statement
also requires a valuation allowance against net deferred tax assets if, based
upon the available evidence, it is more likely than not that some or all of
the deferred tax assets may not be realized.

Effect of Recent Pronouncements

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities"("FAS
133"), as amended by SFAS No. 137, "Accounting for Derivative Instruments and
Hedging Activities-Deferral of the Effective Date of FASB Statement No. 133"
("FAS 137") and SFAS No. 138, "Accounting for Certain Derivative Instruments
and Hedging Activities ("FAS 138"). FAS 137 delayed the effective date of FAS
133 to be effective for fiscal years beginning after June 15, 2000. FAS 133,
as amended by FAS 138, requires that an entity recognize all derivative
instruments as either assets or liabilities in the balance sheet at fair
value. Changes in the fair value of derivatives are recorded each period in
current earnings or other comprehensive income, depending on whether a
derivative is designed as part of a hedge transaction and, if it is, the type
of hedge transaction. The Company believes that this statement will not have
a significant impact on the financial position, results of operations, or
cash flows, as the Company does not hold any derivative instruments or engage
in hedging activities at the present time other than the Hedge Transaction
referred to in Note 9.

In July 2001, the FASB issued SFAS No. 141, "Business Combinations" ("FAS
141") and SFAS No. 142, "Goodwill and Other Intangible Assets" ("FAS 142").
FAS 141 requires that all business combinations be accounted for under the
purchase method, and the use of the pooling-of-interests method is prohibited
for business combinations initiated after June 30, 2001.  FAS 141 also
establishes criteria for the separate recognition of intangible assets
acquired in a business combination.  FAS 142 requires that goodwill no longer
be amortized to earnings, but instead be subject to periodic testing for
impairment.  FAS 142 is effective for fiscal years beginning after December
15, 2001, with earlier application permitted only in specified circumstances.
The Company is evaluating the effect of the new standards on its financial
condition and results of operations.

3. Short-term investments

      Short-term investments are comprised of fixed income securities which
are classified as available-for-sale securities. As of April 30, 2001, the
Company had two Federal Agency securities with an amortized cost of $4.0
million and $6.9 million which approximated fair value. The Federal Agency
securities mature within one year. As of April 30, 2000, the Company had two
Federal Agency securities with an amortized cost of $10.0 million and $9.9
million which approximated fair value. During the years ended April 30, 2001,
and 2000, maturities of fixed income securities resulted in aggregate
proceeds of $125.6 million and $133.6 million respectively.

4. Accounts Receivable Allowance for Doubtful Accounts

      The following table provides a summary of the activity in the accounts
receivable allowance for doubtful accounts for the years ended April 30,
2001, 2000, and 1999:

                                                  Year Ended April 30,
                                            2001           2000         1999
                                                    (in thousands)

Balance at beginning of period ......     $ 2,486       $ 4,883       $   210
Acquisition of Abalon ...............          --            --            58
Charged to expense ..................         422           845         5,128
Deductions ..........................      (1,765)       (3,242)         (513)
                                          -------       -------       -------
Balance at end of period ............     $ 1,143       $ 2,486       $ 4,883
                                          =======       =======       =======

The allowance for doubtful accounts decreased to $1,143,000 at April 30,
2001, from $2,486,000 at April 30, 2000, and from $4,883,000 at April 30,
1999, primarily as a result of settling disputes with customers.  A
significant portion of the amount remaining in the reserve for doubtful
accounts relates to an ongoing dispute with a customer.

5. Property and Equipment

      Property and equipment is recorded at cost, less accumulated
depreciation.  Property and equipment consists of:

                                                              April 30,
                                                         2001           2000
                                                           (in thousands)
Computer equipment ..............................        8,980        10,741
Furniture and fixtures ..........................        4,025         4,605
Automobiles .....................................            -            11
Leasehold improvements ..........................          873           893
Software acquired ...............................        3,396         2,443
                                                      --------      --------
                                                        17,274        18,693
Less accumulated depreciation and amortization ..      (12,521)      (12,098)
                                                      --------      --------
                                                      $  4,753      $  6,595
                                                      ========      ========

Accumulated depreciation and amortization includes accumulated impairment
charges of $2,654,000 as of April 30, 2001, and $1,164,000 as of April 30,
2000. During the year ended April 30, 2001, the Company reorganized its
reporting units providing more geographical responsibility. This resulted in
the cancellation of projects related to building worldwide internal
accounting and reporting systems. Along with this decision, it was determined
that related capitalized software and implementation costs were impaired as
they would no longer provide an economic benefit to the new structure.  This
resulted in a net book value write-off of $1,490,000.  During the year ended
April 30, 2000, the Company determined that software acquired for development
purposes no longer would provide a future benefit. This resulted with a net
book value write-off of $1,164,000.

      Included in property and equipment are assets leased under capital
lease obligations as follows:
                                                            April 30,
                                                       2001            2000
                                                         (in thousands)
Computer equipment ........................         $    73              364
Furniture and fixtures ....................             120              368
                                                    -------          -------
                                                        193              732
Less accumulated amortization .............            (193)            (721)
                                                    -------          -------
                                                    $     0          $    11
                                                    =======          =======

      The amortization expense on capital leases amounted to $11,000,
$59,000, and $240,000 for the years ended April 30, 2001, 2000, and 1999,
respectively.

6. Goodwill and Other Intangibles

Goodwill and other intangibles are recorded at cost, less accumulated
amortization and impairment charges.

Goodwill and other intangibles consists of:
                                                   April 30
                                             2001            2000
                                                (in thousands)
Goodwill ...........................      $ 5,961         $ 6,282
Other intangibles:
  - developed technology ...........        1,700           1,700
  - assembled workforce ............          700             700
  - customer lists .................        1,700           1,700
                                          -------         -------
                                           10,061          10,382
Less accumulated amortization ......       (6,322)         (2,023)
                                          -------         -------
                                          $ 3,739         $ 8,359
                                          =======         =======

For the year ended April 30, 2001, accumulated amortization includes an
impairment charge of $3,010,000.

Amortization of goodwill and other intangibles was $4.5 million in fiscal
2001, $3.0 million of which consisted of a write-down for goodwill relating
to the Abalon acquisition.  The write-down was based upon an outside
appraisal which showed that the value of such goodwill had declined since the
date of the acquisition.

7. Income Taxes

      Loss from continuing operations before income taxes was distributed
geographically as follows:

                                               Year Ended April 30,
                                        2001            2000          1999
                                                   (in thousands)

Domestic .................           $ (2,549)      $ (1,714)    $ (29,977)
Foreign ..................            (17,278)       (21,085)      (21,704)
                                      -------         -------      --------
   Total .................           $(19,827)      $(22,799)     $(51,681)
                                      =======        =======      ========

Components of the (provision) benefit for income taxes are as follows:

                                                     Year Ended April 30,
                                                   2001       2000      1999
                                                         (in thousands)
Current:
Federal ........................................$     --        --     $ 722
State ..........................................      --        --        --
Foreign ........................................      --        --        45
                                                  ------    ------    ------
   Total current provision .....................      --        --     $ 767
                                                  ------    ------    ------
Deferred:
Federal ........................................$ (7,382)       --  $ (8,333)
State ..........................................  (2,204)       --  $ (2,488)
Foreign.........................................  (5,838)       --  $ (6,368)
                                                  ------    ------    -------
 Total deferred (provision) benefit ............$(15,424)       --  $(17,189)
                                                  ------    ------    -------
  Total (provision) benefit for income taxes ...$(15,424)       --  $(16,422)
                                                  ======    ======    =======

The approximate tax effects of temporary differences which give rise to net
deferred taxes are:



<TABLE>
                                                                        April 30,
                                                                       2001      2000
                                                                       (in thousands)
<S>                                                                 <C>          <C>
Deferred income taxes, non-current asset
      Net operating loss carryforwards ..........................   $ 29,332    $ 27,393
      Allowance for doubtful accounts ...........................        359       1,059
      Restructuring..............................................      1,078          --
      Depreciation ..............................................         19         264
      Timing difference reserve (Sweden) ........................         --         (35)
      Other .....................................................         35      (1,161)
                                                                    --------    --------
      Total deferred income taxes, noncurrent asset .............     30,823      27,520
      Valuation allowance .......................................    (30,823)    (12,000)
                                                                    --------    --------
Total net deferred income taxes, non-current asset ..............   $     --    $ 15,520
                                                                    ========    ========
</TABLE>
      A reconciliation of the (provision) benefit for income taxes to the
amount computed by applying the statutory rates is as follows:
<TABLE>
                                                          Year Ended April 30,
                                                 2001               2000                  1999
                                                            (in thousands)
    <S>                                 <C>            <C>   <C>             <C>  <C>           <C>
    Statutory rate ................    $ 6,741         34%   $  7,752        34%  $ 17,572       34%
    Valuation of temporary
     differences ..................     (3,867)       (20)     (5,994)      (26)    (2,613)      (4)
    Increase in valuation allowance
     of deferred tax asset             (15,424)       (78)         --        --         --       --
    Deferred revenues .............         --         --                            1,642        3
    Foreign taxes .................     (1,326)        (6)       (902)       (4)      (848)      (2)
    Permanent differences .........     (1,611)        (8)         --        --         --       --
    Other .........................         63         --        (856)       (4)       669        1
                                       -------    -------     -------   -------    -------      ---
    Effective tax rate ............   $(15,424)      (78)%         --        --   $ 16,422       32%
                                       =======    =======     =======   =======    =======      ===
</TABLE>


In April, 2001, the Company recorded and additional valuation allowance
against its remaining deferred tax asset by increasing the valuation
allowance by $15.4 million based upon its continuing non-profitable
operations and inability to predict when this asset could be realized.  This
resulted in a charge to income for the year ended April 30, 2001, equal to
the increase in the valuation allowance.  There was no provision (benefit)
for income taxes for the year ended April 30, 2000, as the Company applied a
full valuation allowance to deferred tax assets generated after April 30,
1999.  At April 30, 2001, the Company's deferred tax asset amounted to $30.8
million of which $29.3 million related to net operating loss carryforwards
and $1.5 million related to other temporary differences, however after
applying the valuation allowance, the net deferred tax asset at April 30,
2001, was $0. Of the net operating loss carryforwards, $12.0 million were
incurred in the United States and $11.8 million were incurred in Sweden.  The
net operating loss carryforwards, of which substantially all were incurred
during the years ended April 30, 2001, 2000, and 1999, may be carried forward
to offset future income up to 15 years in the United States and indefinitely
in Sweden.

8. Borrowings

Notes payable includes the following:
                                                              April 30,
                                                         2001          2000
                                                           (in thousands)
Collateralized credit facility                           $    --     $   303
Less current portion ..............................           --        (303)
                                                         -------     -------
Notes payable .....................................      $    --     $    --
                                                         =======     =======

9. Accrued Expenses and Other Current Liabilities
                                                             April 30,
                                                       2001             2000
                                                          (in thousands)
Accrued purchases .........................          $ 2,274          $ 2,775
Project reserves...........................              148            1,229
Accrued consultancy .......................              645            1,334
Accrued restructuring costs (See Note 16)..            1,355              257
Accrued pension taxes .....................              588              593
Restructuring cost Abalon .................                -               61
Value-added tax ...........................              374              259
Employee withholding taxes ................              580              622
Additional consideration for Ceratina......                -              241
Valuation of put option ...................            1,384                -
Other......................................              723              607
                                                     -------          -------
                                                     $ 8,071          $ 7,978
                                                     =======          =======

Project reserves consist of charges to be incurred bringing projects to
implementation.

During November, 2000, the Company entered into a hedge transaction with a
Bank to offset potential Swedish social security fee liability upon exercise
of stock options by employees living in Sweden.  The arrangement involved the
issuance by the Bank of a call to the Company settleable in cash, which the
Bank elected to cover by purchasing shares of the Company's Common Stock.
The Company offset a portion of the cost of the call by issuing to the Bank a
right to put shares of Company Common Stock to the Company.  Gain or loss to
the Company on the closing of the transaction will be realized based upon the
increase or decrease in the price of the Company's Common Stock.  As a result
of the decline in the value of the Company Common Stock, as of April 30,
2001, the Company recorded a non-operating charge of $1.4 million relating to
the put issued to the Bank. This charge will be reviewed quarterly and
adjusted to reflect the underlying Common Stock value and will be reversed in
full if the price of the Common Stock reaches $4.536 per share, which is the
exercise price of the put. On April 30, 2001, the exercise price of the call
option ($4.536) used to hedge potential Swedish social security fees was
above the market price of the Company's Common Stock. Since there was no
active market for these types of options, the value of the call option was
limited to a calculated option premium, which was offset in the financial
statements by the corresponding premium on the put option. The original net
premium of $50,000 will be amortized over the 5-year term of the options.
The number of shares of Company Common Stock subject to the call at any given
time, which depends on the number of options outstanding from time to time,
is presently 450,000 and is not expected to exceed that number.  It is
anticipated that the hedge transaction will be open for several years.  As
part of that transaction, the Company deposited $2.1 million with the Bank
and recorded a non-current asset in that amount.

10. Accrued Payroll and Employee Benefits
                                                             April 30,
                                                       2001             2000
                                                          (in thousands)
Accrued commissions .......................           $  398           $  563
Accrued payroll taxes .....................              977            1,212
Accrued vacation pay ......................            1,571            1,733
Accrued salaries and bonus ................            1,398            1,364
Accrued restructuring costs (see Note 16)..            2,256                -
Accrued pension expenses ..................              703              599
Debt for ESPP .............................              145              219
Other .....................................              147               12
                                                      ------           ------
                                                      $7,595           $5,702
                                                      ======           ======

11. Employee Benefit Plans

      The Company provides retirement benefits for substantially all
employees in the United States and in foreign locations. In the U.S., the
U.K., and the Netherlands, the Company sponsors defined contribution plans.
In addition, IMAB has a supplemental defined contribution plan for certain
key management employees.

      IMIC's Swedish subsidiary, IMAB, participates in several pension plans
(non-contributory for employees), which cover substantially all employees of
its Swedish operations. The plans are in accordance with a nationally-agreed
standard plan, the ITP Plan, and administered by a national organization,
Pensionsregistreringsinstitutet ("PRI").  The level of benefits and actuarial
assumptions are calculated and established by the national organization and,
accordingly, IMAB may not change benefit levels or actuarial assumptions. The
Company accounts for pensions in accordance with SFAS No. 87, "Employers'
Accounting for Pensions". In March 2001, IMAB amended its financing of these
plans from financing via corporate assets to financing via premiums paid to
Alecta (formerly SPP), the Swedish National Pension Organization. The pension
book reserve will, in the future, only increase with an interest component.
IMAB has provided a guaranty to Foretagspensionsguaranty ("FPG"), a third
party guarantor of pension liabilities, in the amount of $650,000. This
guaranty is  in the form of a collateralized bank deposit of the same amount
and is recorded as a non-current asset.

Effective April 30, 1999, the Company adopted SFAS No. 132,"Employers'
Disclosures about Pensions and Other Postretirement Benefits." SFAS No. 132
does not change the measurement or recognition of those plans, but revises
the disclosure requirements for pension and other postretirement benefit
plans for all years presented. The net periodic benefit cost for the IMAB's
defined benefit retirement plan in Sweden include the following components:

                                                       Year Ended April 30,
                                                     2001      2000      1999
                                                          (in thousands)

Service cost ..................................      $337      $489      $386
Interest cost .................................       167       142       140
Amortization of actuarial net loss ............         8         8        15
Amortization of transition obligation .........         2         3         3
                                                     ----      ----      ----
Net periodic benefit cost .....................      $514      $642      $544
                                                     ====      ====      ====

The following table sets forth the change in the benefit obligation for
IMAB's defined benefit plan in Sweden:

                                                              April 30,
                                                         2001          2000
                                                           (in thousands)
Change in benefit obligation:
Benefit obligation at beginning of fiscal year ....     $ 3,094      $ 2,896
Service cost ......................................         337          489
Interest cost .....................................         167          143
Actuarial (gain) loss .............................          --         (231)
Benefits paid .....................................         (19)          (8)
Effect of foreign currency exchange rates .........        (532)        (195)
                                                        -------      -------
Benefit obligation at end of fiscal year ..........     $ 3,047      $ 3,094
                                                        =======      =======

    The following table shows the plan's funded status and amounts recognized
in the consolidated balance sheet:
                                                           April 30,
                                                       2001         2000
                                                        (in thousands)
Actuarial present value of benefit obligation:
Funded status ..................................     $(3,047)     $(3,094)
Unrecognized actuarial loss ....................         159          154
Unrecognized transition obligation .............           8           10
                                                     -------      -------
Accrued benefit cost ...........................     $(2,880)     $(2,930)
                                                     =======      =======

      The following assumptions were used to determine the IMAB's obligation
under the Swedish plan:

                                               Years Ended April 30,
                                          2001           2000          1999
Discount rate ..................          5.75%          5.75%          5.0%
Salary increase ................          3.00%          3.00%          2.5%
Inflation ......................          2.00%          2.00%          1.5%

Defined Contribution Plans

      Contributions by the Company relating to its defined contribution plans
for the years ended April 30, 2001, 2000, and 1999 were $2,606,000,
$2,051,000, and $1,318,000, respectively. During the year ended April 30,
2001, IMAB received notification from Alecta of a refund of pension premiums
relating to earlier years. The unused portion of the refund amounted to
$820,000 at April 30, 2001. The refund may be used to reduce future pension
premium payments. The unused portion of the pension refund has not been
recorded in the Statement of Operations or the Balance Sheet.

12. Stockholders' Equity

      IMIC's Amended and Restated Certificate of Incorporation as in effect
on April 30, 2001, authorizes (i) 15,000,000 shares of preferred stock
("Preferred Stock") with a par value of $0.01 and (ii) 75,000,000 shares of
Common Stock with a par value of $0.01 of which 12,500,000 shares have been
designated as Class B Common Stock. No shares of Preferred Stock or Class B
Common Stock were outstanding at April 30, 2001.

      As of April 30, 2001, 2000, and 1999, total stockholders' equity
includes an amount of SEK 40,800,000 (approximately U.S. $4,000,000) in IMAB
which is restricted as to usage according to Swedish Company Law. The amount
only can be used to cover a net deficit, for an increase in share capital, or
for other uses as agreed by the courts.

      During the fiscal year ended April 30, 1999, IMIC repurchased and
retired 1,838,766 shares of Common Stock at an aggregate cost of $6,262,000.
There have not been any repurchases of Common Stock during the years ended
April 30, 2000 and 2001.

13. Stock Compensation Plans

Stock Option Plans

      In May 1995, IMIC adopted the Industri-Matematik International Corp.
Stock Option Plan ("1995 Plan"), and in October, 1998, IMIC adopted the
Industri-Matematik International Corp. 1998 Stock Option Plan ("1998
Plan")(the 1995 Plan and 1998 Plan, collectively, "U.S. Plans"). The U.S.
Plans provide for grants of incentive stock options to key employees
(including officers and employee directors) of the Company and non-incentive
stock options to key employees and members of IMIC's Board of Directors,
consultants, and other advisors of the Company who are not employees. The
maximum term for either form of option is ten years, and the options which
have been granted have had vesting periods of three to five years. A total of
3,000,000 shares of Common Stock were reserved for future issuance under the
1995 Plan, of which 978,196 were available for grant as of April 30, 2001,
and a total of 3,000,000 shares of Common Stock were reserved for future
issuance under the 1998 Plan and in August, 2000, the Board of Directors
reserved an additional 1,000,000 shares (subsequently ratified by the
shareholders).  Of the total of 4,000,000 shares reserved for issuance under
the 1998 Plan, 1,915,173 were available for grant as of April 30, 2001.

      Since there has been a public market for the Company's Common Stock,
all stock options have been granted with an exercise price equal to or
exceeding the market price.  IMIC's Board of Directors believes that all
stock options granted prior to there being such public market were granted
with an exercise price equal to or exceeding the fair value of such Common
Stock on the date of the grant, based on the facts, circumstances, and
limitations existing at the time of their determinations.

The following is a summary of option transactions and exercise prices as it
relates to the U.S. Plans:
                                                                 Weighted
                                                                  Average
                                 Shares       Price per share  Exercise Price

Outstanding at April 30, 1998      639,498      $ 2.00 - $31.22     $17.68

     Granted..............       3,236,000      $2.00 - $ 14.88     $ 6.15
     Exercised............         (11,000)     $9.00 - $ 11.13     $10.15
     Terminated...........        (688,000)     $2.00 - $ 31.22     $16.16
                                 ---------
Outstanding at April 30, 1999    3,176,498      $2.00 - $ 26.38     $ 6.30
                                 ---------
     Granted..............       1,510,700      $1.91 - $ 12.25     $ 3.34
     Exercised............         (99,597)     $2.00 - $ 11.06     $ 3.54
     Terminated...........        (602,751)     $1.91 - $ 20.38     $ 6.12
                                 ---------
Outstanding at April 30, 2000    3,984,850      $1.91 - $ 26.38     $ 5.27
                                 ---------
     Granted..............         270,500      $1.72 - $  3.50     $ 2.24
     Exercised............        (151,900)     $1.91 - $  4.00     $ 2.03
     Terminated...........        (914,000)     $1.91 - $ 20.38     $ 4.61
                                 ---------
Outstanding at April 30, 2001    3,189,450      $1.72 - $ 26.38     $ 5.31
                                 ---------
Vested at April 30, 2001         1,791,300      $1.72 - $ 26.38     $ 6.94
                                 =========

The following table summarizes information concerning outstanding and
exercisable options as of April 30, 2001.



<TABLE>
                                  Options Outstanding
                           -----------------------------------------
                                     Weighted Average                     Options Exercisable
                          -----------------------------------------   -------------------------
                                                                                     Weighted
                           Number of  Remaining Life                   Number of      Average
Range of Exercise Prices     Options       (Years)     Exercise Price    Options    Exercise Price
--------------------------   ---------  --------------  --------------   ---------  --------------
    <C>       <C>           <C>               <C>          <C>             <C>         <C>
    $  1.72 - $ 4.00        1,719,450          8.3         $ 2.82          816,300     $ 2.46
    $  5.06 - $ 6.00        1,032,500          7.4         $ 5.92          399,000     $ 5.91
    $  7.88 - $ 9.00          104,000          5.4         $ 8.94           84,000     $ 8.91
    $ 11.06 - $15.38          318,500          6.9         $14.72          483,000     $14.69
    $ 22.25 - $26.38           15,000          6.8         $23.63            9,000     $23.63
- ----------------------   ----------        -----        -------        ---------     -------
    $  1.72 - $26.38        3,189,450          7.8         $ 5.31        1,791,300     $ 6.94
                            =========                                    =========
</TABLE>


Transferable Stock Option Plan

     In October, 2000, the Company instituted a Transferable Stock Option
Plan ("Swedish Plan") which supplements the U.S. Plans for the benefit of
selected employees subject to Swedish income taxation.  Pursuant to the
Swedish Plan, options may be sold to employees giving them the right to
purchase shares of Company Common Stock at a purchase price equal to the
market value on the Common Stock on the date of sale of the option.  The
purchase price for the option will be its fair market value on the date of
sale.  The options are transferable, and if an employee owning an option
terminates his employment with the Company, the Company has the right to
repurchase his options at their then market value, or if the options are not
publicly traded, at the original purchase price plus interest.   A total of
500,000 shares were reserved for issuance under the Swedish Plan, all of
which were available for grant as of April 30, 2001.

Restricted Stock Program

      In May 1995, the Company instituted a restricted stock program pursuant
to which shares of IMIC's Common Stock were purchased by certain key
employees who may be taxable pursuant to the laws of Sweden in exchange for
nonrecourse promissory notes ("Restricted Stock Program"). The shares were
issued through a wholly owned subsidiary of IMIC, Software Finance
Corporation ("SFC"). Principal on the promissory notes is due either nine or
ten years after issuance with interest being due and payable annually.

      During the year ended April 30, 1999, 65,000 were sold pursuant to the
Restricted Stock Program at a price of $6.00 per share for total proceeds of
$390,000. No shares were sold in fiscal 2000 or 2001.

      Under the terms of the Restricted Stock Program, SFC has an option to
repurchase the shares issued to each employee provided it pays an annual
option premium. The exercise price to be paid by SFC upon exercise of a
purchase option is the fair market value, provided that if the option to
purchase is exercised prior to the end of a stated period, then the exercise
price is the initial purchase price for a percentage of the shares after the
first anniversary of the option agreement, generally decreasing by 20% each
subsequent year and the exercise price for the balance of the shares is fair
market value. The annual option premium paid by SFC is at a rate
substantially equal to the interest due on the non-recourse promissory note.
If it exercises an option, SFC has the right and obligation to apply against
the payment of any principal due on the employee's promissory note any
amounts payable by SFC to the recipient of the shares as the exercise price
under the Option Agreement. The individual employee has no personal
obligation under the note; liability is limited to the shares sold. During
fiscal 2000, pursuant to the foregoing provisions, a former employee sold the
shares he acquired and applied the proceeds to his note, and the balance of
the note was cancelled.

      The shares sold pursuant to the Restricted Stock Program are included
within Common Stock and additional paid-in capital in Stockholders' equity
while the non-recourse promissory notes are classified as a contra-account as
notes receivable from Stockholders, and shown in Stockholders' equity. The
Company has the ability to prevent the recipients from selling the purchased
securities. The Company has not recognized any compensation expense in
respect of the restricted stock in the statements of operations since the
purchase price of the restricted stock did not differ from the estimated fair
market value of the Common Stock on the date of issuance. The shares sold
pursuant to the Restricted Stock Program and dividends paid thereon are
subject to a pledge and security interest held by SFC.

     As of April 30, 2001, 1,066,995 shares sold pursuant to the Restricted
Stock Program with respect to which the related non-recourse promissory notes
remained unpaid were outstanding.

Employee Stock Purchase Plan

      Effective February 26, 1997, IMIC adopted the Industri-Matematik
International Corp. 1997 Employee Stock Purchase Plan ("ESPP") to provide
eligible employees an opportunity to purchase shares of IMIC Common Stock at
a discount from market value through payroll deductions and other
contributions.600,000 shares were reserved initially for purchase pursuant to
the ESPP, in December, 1998, the Board of Directors reserved an additional
600,000 shares (subsequently ratified by the shareholders), and again in May,
2000, the Board of Directors reserved an additional 600,000 shares
(subsequently ratified by the shareholders). The ESPP establishes purchase
periods of up to 23 months and two 6-month accrual periods per calendar year
commencing each January 1 and July 1. On the last day of each accrual period,
participant account balances are used to purchase shares of Common Stock at
the lesser of 85% of the fair market value of the Common Stock on such date
or on the first day of the purchase period. No participant may purchase more
than 500 shares in any accrual period or shares having a value in excess of
$21,250 in any calendar year. Employees purchased 234,784 and 284,756 shares
at an average price of $2.04 and $2.09 per share under the ESPP during the
years ended April 30, 2000 and 2001, respectively.

Proforma Net Income in accordance with SFAS No. 123.

      As permitted by the provisions of SFAS No. 123, "Accounting for Stock-
Based Compensation", the Company applies APB Opinion 25 "Accounting for Stock
Issued to Employees" and related interpretations in accounting for its stock-
based employee compensation plans. Accordingly, no compensation cost has been
recognized for the stock options or for purchases under the ESPP. If
compensation cost for stock option plans and its ESPP had been determined
based on the fair value at the grant dates as defined by SFAS No. 123, the
Company's pro forma net income and earnings per share would have been as
follows:

                                                Year ended April 30,
                                             2001          2000      1999
                                        (in thousands, except per share data)
Net loss                   As reported..   $(35,251)   $(22,799)    $(35,259)
                           Pro forma....    (39,883)    (27,881)     (38,326)

Net loss per share         As reported..   $  (1.10)   $  (0.72)    $  (1.09)
                           Pro forma....      (1.25)      (0.88)       (1.18)

      The fair value of each option grant is estimated on the date of the
grant using the Black-Scholes options-pricing model with the following
weighted-average assumptions used for grants in the years ended April 30,
2001, 2000, and 1999:
                                                  Year Ended April 30,
                                            2001          2000         1999

Expected term .....................            5             5            5
Volatility factor .................        100.0%         90.0%        91.5%
Risk-free interest rate ...........         5.21%         5.95%        5.16%
Dividend yield ....................         0.00%         0.00%        0.00%
Fair value ........................       $ 1.73        $ 2.44       $ 4.47

      Shares issued under the ESPP were valued at the difference between the
market value of the stock and the discounted purchase price of the shares on
the date of purchase. The date of grant and the date of purchase coincide for
this plan.

      The weighted average fair value of shares issues to employees under the
ESPP was $0.68, $0.67, and $1.88 during the years ended April 30, 2001, 2000,
and 1999, respectively.

14. Commitments and Contingencies

Operating leases

      The Company leases office facilities and certain office equipment under
various noncancelable operating lease agreements.  Aggregate future minimum
lease payments under noncancelable operating leases are as follows as of
April 30, 2001:
                                                    Future minimum payments
Year Ending April 30,                                  on operating leases
                                                          (in thousands)
2002...............................................         $  5,154
2003...............................................            4,479
2004 ..............................................            4,282
2005...............................................            1,276
2006...............................................              707
Thereafter.........................................            4,025
                                                            --------
Total future minimum lease payments                         $ 19,923
                                                            ========

      Total rent expense under the leases was $5,371,000, $7,904,000,
$7,030,000 for the years ended April 30, 2001, 2000, and 1999, respectively.

      The Company is liable to pay social fees on the gains in connection
with the exercise of the Company's stock options by it's employees in Sweden.
The amount of the future liability is dependent upon the number of options
exercised and the market price.  Social fees in Sweden are approximately 33
percent.  To offset this potential liability, during November, 2000, the
Company entered into a hedge transaction.  (See Note 9.)

Litigation

      The Company is engaged in an arbitration to collect monies due from a
customer in which the customer has interposed a claim or damages.  The
Company believes that the customer's claim is without merit.  In addition, in
February, 1999, a class action lawsuit was commenced by service of a
complaint against the Company, certain of its officers, directors, and
controlling shareholders who sold shares of Common Stock during the class
period, and its underwriters claiming violations of the Federal securities
laws.  The complaint was dismissed, but the plaintiff had the right and did
serve a new complaint.  A motion to dismiss the second complaint has been
submitted.  No answer to either complaint was filed. While management
believes this action to be without merit, an unfavorable outcome in the class
or any other action which may be brought against the Company may have a
material adverse affect upon the Company's business, operating results, and
financial condition. In May, 1999, the Company initiated an Arbitration in
Denmark against a Danish licensee of System ESS seeking damages for breach of
contract, and this licensee claimed damages against the Company for breach of
contract. This action was settled during fiscal 2001.

15. Segment Information

The Company operates in one industry segment, the design, development,
marketing, licensing, and support of client/server application software. The
Company is managed on a geographic basis and the Company's management
evaluates the performance of its segments and allocates resources to them
based upon income (loss) from operations. Income (loss) from operations for
the geographic segments excludes general corporate expenses and product
development costs. The majority of software development occurs in Sweden
although the Company maintains some development facilities in the United
States. Product development costs and general corporate expenses are reported
in the Corporate segment. Assets by reportable segment are not disclosed
since the Company's management does not review segmented balance sheet
information. The accounting policies of the segments are the same as those
described in the summary of significant accounting policies. Segment data
includes intersegment revenues.

The table below presents information about the Company's reportable segments:

                                                   Year Ended April 30,
                                              2001         2000        1999
                                                     (in thousands)
Revenues:
     United States .....................   $ 28,220     $ 28,859    $ 40,256
     Nordic ............................     28,383       32,083      32,262
     United Kingdom ....................      6,316        6,051       9,535
     Netherlands .......................      7,325        5,159       1,350
     Other Europe.......................         --          346         590
     Australia .........................      1,194        2,198       2,387
     Intercompany ......................     (2,744)        (137)        (69)
     Corporate .........................        661          466         657
                                           --------     --------    --------
     Total revenues                        $ 69,355     $ 75,025    $ 86,968
                                           ========     ========    ========

Loss from operations:
     United States .....................   $  7,795     $  4,371    $(12,002)
     Nordic ............................      2,039        3,275       5,160
     United Kingdom ....................          1       (1,011)    (2,061)
     Netherlands .......................      1,918          775      (2,358)
     Other Europe ......................       (160)        (823)     (2,671)
     Australia .........................       (228)         634        (648)
     Canada ............................         (3)         (24)       (558)
     Intercompany ......................     (2,072)        (252)     (2,376)
     Corporate .........................    (29,446)     (31,766)    (37,554)
                                           --------     --------    --------
     Total loss from operations            $(20,156)    $(24,821)   $(55,068)
                                           ========     ========    ========

Geographic data for revenues based upon customer location and long-lived
assets (which consist of non-current assets other than goodwill and other
intangible assets) were as follows:

                                                   Year Ended April 30,
                                              2001         2000        1999
                                                    (in thousands)
Revenues:
     United States .....................   $ 23,086     $ 26,650    $ 33,562
     Nordic ............................     25,546       20,567      21,809
     United Kingdom ....................      6,657        6,749      10,952
     Netherlands .......................      6,561        5,634       2,249
     Other Europe ......................      1,218       10,464       8,976
     Asia/Pacific ......................      1,455        2,665       2,400
     Rest of Americas ..................      4,832        2,296       7,020
                                           --------     --------    --------
     Total revenues                        $ 69,355     $ 75,025    $ 86,968
                                           ========     ========    ========

Long-lived assets:
     United States .....................    $ 1,732     $ 2,673     $  3,536
     Sweden ............................      2,387       2,867        1,469
     United Kingdom ....................        410         574          894
     Netherlands .......................        158         208          346
     Other Europe.......................         --         137          160
     Australia .........................         66         136          277
                                           --------    --------     --------
     Total long-lived assets                $ 4,753     $ 6,595     $  6,682
                                           ========    ========     ========

Major customers

      For the years ended April 30, 2001, 2000, and 1999, the Company had no
single customer with sales comprising more than 10% of total revenues.

In January 1997, the Company entered into an agreement with Oracle
Corporation pursuant to which the parties agreed for a term which ended in
fiscal 2000 to jointly market and license the Oracle Solution Suite, which
incorporated the Company's System ESS software, certain Oracle software, and
other complementary software of third parties. Oracle paid the Company a
percentage of the total license fees that Oracle received from customers for
System ESS. The Company supports its System ESS software.  For the years
ended April 30, 2001, 2000, and 1999, 0%, 0%, and 20%, respectively, of the
Company's license revenues was derived from customers introduced to the
Company by Oracle.

16. Restructuring

In April, 2001, the Company announced a reorganization of its operations into
four regional units each made up of sales, services, support, and operations
staff.  In connection with the reorganization, the Company took a
restructuring charge of $5.4 million consisting primarily of employee
severance costs, lease termination expenses, and write-downs of certain
property and equipment.

The following table presents the components of the charge (in thousands) and
the restructuring activity relating to the fiscal 2001 restructuring through
April 30, 2001:
                                                               Accrual
                                      Utilization               as of
                            Initial       of       Currency    April 30,
                             charge     accrual     effect      2001
                            -------   ----------   ---------   --------
Severance benefits          $ 2,797    $     --    $    (176)  $  2,621
Lease obligations
  and terminations            1,057          --          (67)       990
Write-down on fixed assets    1,490      (1,490)          --         --
Other                            47                                  47
                            -------   ----------   ---------   --------
Total                       $ 5,391    $ (1,490)   $    (243)  $  3,658
                            =======   ==========   =========   ========

During the fourth quarter of the year ended April 30, 1999, the Company
incurred a $3.5 million one-time restructuring charge in connection with a
cost realignment plan. The components of the charge included, in thousands:

Severance benefits                                         $2,699
Lease obligations and terminations                            535
Other                                                         288
                                                           ------
Total restructuring charge                                  3,522
                                                           ======

The following table presents the restructuring activity relating to the
fiscal 1999 restructuring through April 30, 2001:

                       Accrual                           Accrual
                        as of   Utilization               as of
                      April 30,     of       Currency    April 30,
                        2000      accrual     effect      2001
                      -------   ----------   ---------   ---------

Severance benefits    $   247    $   (242)   $     (5)    $     0
Lease obligations
  and terminations          4          (4)         --           0
Other                       6          (6)         --           0
                      -------   ----------   ---------   ---------
Total                 $   257    $   (252)   $     (5)    $     0
                      =======   ==========   =========   =========

17. Quarterly Information (Unaudited)

      Summarized quarterly consolidated financial information for 2001 and
2000 is as follows:



<TABLE>
                                                           Quarter Ended
                                 July 31,  Oct. 31,  Jan. 31,    April 30,  July 31,   Oct. 31,   Jan. 31,    April 30,
                                  2000     2000       2001        2001      1999        1999       2000        2000
                                                      (in thousands, except per share data)
<S>                            <C>        <C>        <C>        <C>        <C>       <C>          <C>       <C>
Total revenues                 $ 16,993   $ 18,487   $ 15,390   $ 18,485   $ 16,676  $ 18,288     $18,879    $21,182
Gross profit                      7,397      8,820      6,086      7,822      4,118     5,281       5,721      9,032
Net income (loss)                (3,480)      (650)    (4,254)   (26,866)    (7,347)   (6,850)     (5,893)    (2,709)
Earnings per Share                (0.11)     (0.02)     (0.13)     (0.84)     (0.23)    (0.22)      (0.19)     (0.09)
Weighted average number
  of shares                      31,931     31,974     32,020     32,020     31,535    31,604      31,636     31,790
</TABLE>



                                   SIGNATURES

      Pursuant to the requirements of Section 13 of 15(d) 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.

                              INDUSTRI-MATEMATIK INTERNATIONAL CORP.


July 27, 2001                 By: /s/ STIG G. DURLOW
                                 ------------------------------------
                                 Stig G. Durlow, Chairman, President,
                                 and Chief Executive Officer

      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.


July 27, 2001                        /s/ STIG G. DURLOW
                                     ---------------------------------------
                                     Stig G. Durlow, Principal
                                     Executive Officer, Director


July 27, 2001                        /s/ KARL ASP
                                     ---------------------------------------
                                     Karl Asp, Principal
                                     Financial and Accounting
                                     Officer


July 27, 2001                        /s/ JEFFREY A. HARRIS
                                     ---------------------------------------
                                     Jeffrey A. Harris, Director


July 27, 2001                        /s/ WILLIAM H. JANEWAY
                                     ---------------------------------------
                                     William H. Janeway, Director


July 27, 2001                        /s/ TERJE LAUGERUD
                                     ---------------------------------------
                                     TERJE LAUGERUD, Director


July 27, 2001                        /s/ MARTIN LEIMDORFER
                                     ---------------------------------------
                                     Martin Leimdorfer, Director


July 27, 2001                        /s/ GEOFFREY W. SQUIRE
                                     ---------------------------------------
                                     Geoffrey W. Squire, Director