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

FORM 10-Q

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

For the quarter ended June 30, 2001
Commission File Number 0-23373

LANDMARK SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)

|                                                                               |  |                                                
|------------------------------------------------------------------------------ |  | -----------------------------------------------
|VIRGINIA
(State or other jurisdiction of
incorporation or organization)        |  | 54-1221302
(I.R.S. Employer Identification No.)
|12700 Sunrise Valley Drive
Reston, VA
(Address of principal executive offices) |  | 20191
(Zip Code)                               

703-464-1300
(Registrants telephone number, including area code)

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

YES X     NO

Number of shares outstanding of the issuers classes of
common stock as of July 31, 2001:

|                                             |  |                                        
|-------------------------------------------- |  | ---------------------------------------
|Class
Common Stock, par value $.01 per share |  | Number of Shares Outstanding
12,436,913

1



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LANDMARK SYSTEMS CORPORATION

QUARTER ENDED JUNE 30, 2001

INDEX

|           |  |                                                                                                                                           |  |      |       | 
|---------- |  | ----------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ----- | 
|           |  |                                                                                                                                           |  | PAGE
|PART I.    |  | FINANCIAL INFORMATION                                                                                                                    
|           |  |                                                                                                                                           |  |      |       | 
|Item 1.    |  | Financial Statements                                                                                                                     
|           |  |                                                                                                                                           |  |      |       | 
|           |  | Condensed Consolidated Statements of Operations for the three and
six months ended June 30, 2001 (unaudited) and June 30,
2000(unaudited) |  |      | 4     | 
|           |  |                                                                                                                                           |  |      |       | 
|           |  | Condensed Consolidated Balance Sheets as of June 30,
2001 (unaudited) and December 31, 2000                                               |  |      | 5     | 
|           |  |                                                                                                                                           |  |      |       | 
|           |  | Condensed Consolidated Statements of Cash Flows for the
six months ended June 30, 2001 (unaudited) and June 30, 2000
(unaudited)          |  |      | 6     | 
|           |  |                                                                                                                                           |  |      |       | 
|           |  | Notes to Condensed Consolidated Financial Statements (unaudited)                                                                          |  |      | 7-9   | 
|           |  |                                                                                                                                           |  |      |       | 
|Item 2.    |  | Managements Discussion and Analysis of Results of Operations
and Financial Condition                                                     |  |      | 10-13 | 
|           |  |                                                                                                                                           |  |      |       | 
|Item 3.    |  | Quantitative and Qualitative Disclosures About Market Risk                                                                                |  |      | 13    | 
|           |  |                                                                                                                                           |  |      |       | 
|PART II.   |  | OTHER INFORMATION                                                                                                                        
|           |  |                                                                                                                                           |  |      |       | 
|Item 1.    |  | Legal Proceedings                                                                                                                         |  |      | 13    | 
|           |  |                                                                                                                                           |  |      |       | 
|Item 2.    |  | Changes in Securities and Use of Proceeds                                                                                                 |  |      | 13    | 
|           |  |                                                                                                                                           |  |      |       | 
|Item 3.    |  | Defaults Upon Senior Securities                                                                                                           |  |      | 13    | 
|           |  |                                                                                                                                           |  |      |       | 
|Item 4.    |  | Submission of Matters to a Vote of Security Holders                                                                                       |  |      | 13    | 
|           |  |                                                                                                                                           |  |      |       | 
|Item 5.    |  | Other Information                                                                                                                         |  |      | 14    | 
|           |  |                                                                                                                                           |  |      |       | 
|Item 6.    |  | Exhibits and Reports on Form 8-K                                                                                                          |  |      | 14-15 | 
|           |  |                                                                                                                                           |  |      |       | 
|SIGNATURES |  |                                                                                                                                           |  |      | 16    | 

2



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PART I  FINANCIAL INFORMATION

Item 1. Financial Statements

The condensed consolidated financial statements set forth below for the
three and six-month periods ended June 30, 2001 and 2000 are unaudited, and
have been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission (see Note 1). Certain information and note disclosures
normally included in annual financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted
pursuant to those rules and regulations. Landmark Systems Corporation believes
that the disclosures made are adequate to make the information presented not
misleading. The results for the three and six-month periods ended June 30, 2001
are not necessarily indicative of the results for the fiscal year.

In the opinion of management, the accompanying condensed consolidated
financial statements reflect all necessary adjustments (consisting only of
normal recurring adjustments) that are necessary for a fair presentation of
results for the periods presented. It is recommended that these financial
statements be read in conjunction with the latest audited consolidated
financial statements and notes thereto (included in the Annual Report on Form
10-K for the year ended December 31, 2000).

3



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LANDMARK SYSTEMS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |            |            |         |            |            |            |         |            | 
|------------------------------------------------ | ------------------------------------ | ------------------------------------------ | ------------------------ | ---------- | --------------------------- | ---------- | ------------------------- | ---------- | -------- | ---------- | ---------- | ---------- | ------- | ---------- | ---------- | ---------- | ------- | ---------- | 
|                                                 |                                      |                                            |                          |            | Three Months Ended June 30, |            | Six Months Ended June 30,
|                                                 |                                      |                                            |                          |            |                             |            |                          
|                                                 |                                      |                                            |                          |            | 2001                        |            | 2000                      |            | 2001     |            | 2000      
|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |           
|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |            |            |         |            |            |            |         |            | 
|Revenues                                        
|                                                 | License revenues                     |                                            | $                        | 6,730,808  |                             |            | $                         | 5,477,381  |          |            | $          | 13,076,783 |         |            | $          | 9,917,284  |        
|                                                 | Maintenance revenues                 |                                            |                          | 7,948,082  |                             |            |                           | 7,710,653  |          |            |            | 15,729,699 |         |            |            | 15,735,394 |        
|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |            |            |         |            |            |           
|                                                 |                                      |                                            | Total revenues           |            |                             | 14,678,890 |                           |            |          | 13,188,034 |            |            |         | 28,806,482 |            |            |         | 25,652,678 | 
|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |            |            |         |            |            |           
|Cost of revenues                                
|                                                 | Cost of license revenues             |                                            |                          | 387,029    |                             |            |                           | 620,578    |          |            |            | 838,006    |         |            |            | 874,817    |        
|                                                 | Cost of maintenance  revenues        |                                            |                          | 1,458,926  |                             |            |                           | 1,655,520  |          |            |            | 2,902,784  |         |            |            | 2,928,782  |        
|                                                 | Cost to acquire distribution  rights |                                            |                          | 588,072    |                             |            |                           | 561,496    |          |            |            | 1,168,749  |         |            |            | 1,113,387  |        
|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |            |            |         |            |            |           
|                                                 |                                      |                                            | Total cost of revenues   |            |                             | 2,434,027  |                           |            |          | 2,837,594  |            |            |         | 4,909,539  |            |            |         | 4,916,986  | 
|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |            |            |         |            |            |           
|                                                 | Gross profit                         |                                            |                          | 12,244,863 |                             |            |                           | 10,350,440 |          |            |            | 23,896,943 |         |            |            | 20,735,692 |        
|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |            |            |         |            |            |           
|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |            |            |         |            |            |            |         |            | 
|Operating expenses                              
|                                                 | Sales and marketing                  |                                            |                          | 6,838,881  |                             |            |                           | 5,804,791  |          |            |            | 13,565,177 |         |            |            | 11,241,490 |        
|                                                 | Product research and  development    |                                            |                          | 4,026,412  |                             |            |                           | 3,856,050  |          |            |            | 7,701,896  |         |            |            | 7,465,395  |        
|                                                 | General and administrative           |                                            |                          | 2,192,192  |                             |            |                           | 1,715,653  |          |            |            | 3,830,834  |         |            |            | 3,246,159  |        
|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |            |            |         |            |            |           
|                                                 |                                      |                                            | Total operating expenses |            |                             | 13,057,485 |                           |            |          | 11,376,494 |            |            |         | 25,097,907 |            |            |         | 21,953,044 | 
|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |            |            |         |            |            |           
|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |            |            |         |            |            |            |         |            | 
|Operating (loss) income                          |                                      |                                            | (812,622                 | )          |                             |            | (1,026,054                | )          |          |            | (1,200,964 | )          |         |            | (1,217,352 | )         
|License of source code of  discontinued products |                                      |                                            | 1,618,756                |            |                             |            |                          |            |          |            | 1,618,756  |            |         |            |           |           
|Interest and other income,  net                  |                                      |                                            | 464,217                  |            |                             |            | 551,612                   |            |          |            | 1,033,766  |            |         |            | 1,100,436  |           
|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |            |            |         |            |            |           
|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |            |            |         |            |            |            |         |            | 
|Income (loss) before taxes                       |                                      |                                            | 1,270,351                |            |                             |            | (474,442                  | )          |          |            | 1,451,558  |            |         |            | (116,916   | )         
|                                                 |                                      | Provision for (benefit  from) income
taxes |                          |            | 539,899                     |            |                           |            | (180,288 | )          |            |            | 616,912 |            |            |            | (44,428 | )         
|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |            |            |         |            |            |           
|Net income (loss)                                |                                      | $                                          | 730,452                  |            |                             | $          | (294,154                  | )          |          | $          | 834,646    |            |         | $          | (72,488    | )         
|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |            |            |         |            |            |           
|                                                 |                                      |                                            |                          |            |                             |            |                           |            |          |            |            |            |         |            |            |            |         |            | 
|Earnings per share                              
|                                                 |                                      | Basic                                      |                          | $          | 0.06                        |            |                           | $          | (0.02    | )          |            | $          | 0.07    |            |            | $          | (0.01   | )         
|                                                 |                                      | Diluted                                    |                          | $          | 0.06                        |            |                           | $          | (0.02    | )          |            | $          | 0.07    |            |            | $          | (0.01   | )         

See accompanying notes to condensed consolidated financial statements.

4



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LANDMARK SYSTEMS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS

|                                           |                                                                                      |                                                          |            |               |            |                   |            |            |            | 
|------------------------------------------ | ------------------------------------------------------------------------------------ | -------------------------------------------------------- | ---------- | ------------- | ---------- | ----------------- | ---------- | ---------- | ---------- | 
|                                           |                                                                                      |                                                          |            | June 30, 2001 |            | December 31, 2000
|                                           |                                                                                      |                                                          |            |               |            |                  
|                                           |                                                                                      |                                                          |            | (unaudited)  
|ASSETS                                    
|Current assets:                           
|                                           | Cash and cash equivalents                                                            |                                                          | $          | 26,724,266    |            |                   | $          | 28,078,594 |           
|                                           | Accounts receivable, net of allowance for
doubtful accounts of $621,000 and
$491,000 |                                                          |            | 11,464,575    |            |                   |            | 15,399,070 |           
|                                           | Unbilled accounts receivable                                                         |                                                          |            | 10,674,829    |            |                   |            | 9,677,138  |           
|                                           | Other current assets                                                                 |                                                          |            | 3,458,537     |            |                   |            | 3,186,357  |           
|                                           |                                                                                      |                                                          |            |               |            |                   |            |           
|                                           |                                                                                      | Total current assets                                     |            |               | 52,322,207 |                   |            |            | 56,341,159 | 
|Unbilled accounts receivable  noncurrent  |                                                                                      |                                                          | 8,622,654  |               |            |                   | 8,154,395  |           
|Fixed assets, net                          |                                                                                      |                                                          | 4,891,779  |               |            |                   | 5,315,662  |           
|Capitalized software costs, net            |                                                                                      |                                                          | 1,924,765  |               |            |                   | 504,086    |           
|Intangible assets, net                     |                                                                                      |                                                          | 3,805,486  |               |            |                   | 4,513,521  |           
|Other assets                               |                                                                                      |                                                          | 2,017,359  |               |            |                   | 2,040,798  |           
|                                           |                                                                                      |                                                          |            |               |            |                   |            |           
|Total assets                               |                                                                                      | $                                                        | 73,584,250 |               |            | $                 | 76,869,621 |           
|                                           |                                                                                      |                                                          |            |               |            |                   |            |           
|LIABILITIES AND STOCKHOLDERS EQUITY      
|Current liabilities:                      
|                                           | Accounts payable, accrued expenses and
other current liabilities                     |                                                          | $          | 5,854,512     |            |                   | $          | 7,948,459  |           
|                                           | Deferred revenue                                                                     |                                                          |            | 21,699,001    |            |                   |            | 23,552,449 |           
|                                           |                                                                                      |                                                          |            |               |            |                   |            |           
|                                           |                                                                                      | Total current liabilities                                |            |               | 27,553,513 |                   |            |            | 31,500,908 | 
|Deferred revenue  noncurrent              |                                                                                      |                                                          | 10,746,722 |               |            |                   | 10,959,332 |           
|Other liabilities                          |                                                                                      |                                                          | 115,697    |               |            |                   | 160,518    |           
|                                           |                                                                                      |                                                          |            |               |            |                   |            |           
|Total liabilities                          |                                                                                      |                                                          | 38,415,932 |               |            |                   | 42,620,758 |           
|                                           |                                                                                      |                                                          |            |               |            |                   |            |           
|Stockholders equity:                     
|                                           | Common stock, $0.01 par value, 30,000,000                                           
|                                           |                                                                                      | Shares authorized, 13,218,913 and
13,147,411 outstanding |            |               | 132,189    |                   |            |            | 131,474    | 
|                                           | Additional paid-in capital                                                           |                                                          |            | 35,666,795    |            |                   |            | 35,499,092 |           
|                                           | Retained earnings                                                                    |                                                          |            | 2,242,392     |            |                   |            | 1,407,746  |           
|                                           | Accumulated other comprehensive loss                                                 |                                                          |            | (429,304      | )          |                   |            | (345,695   | )         
|Treasury stock, at cost; 782,000 shares    |                                                                                      |                                                          | (2,443,754 | )             |            |                   | (2,443,754 | )         
|                                           |                                                                                      |                                                          |            |               |            |                   |            |           
|Total stockholders equity                 |                                                                                      |                                                          | 35,168,318 |               |            |                   | 34,248,863 |           
|                                           |                                                                                      |                                                          |            |               |            |                   |            |           
|Total liabilities and stockholders equity |                                                                                      | $                                                        | 73,584,250 |               |            | $                 | 76,869,621 |           
|                                           |                                                                                      |                                                          |            |               |            |                   |            |           

See accompanying notes to condensed consolidated financial statements.

5



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LANDMARK SYSTEMS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

|                                               |                                                                                                            |                                           |            |                           |            |      |            |            |            |  
|---------------------------------------------- | ---------------------------------------------------------------------------------------------------------- | ----------------------------------------- | ---------- | ------------------------- | ---------- | ---- | ---------- | ---------- | ---------- | -
|                                               |                                                                                                            |                                           |            | Six Months Ended June 30,
|                                               |                                                                                                            |                                           |            |                          
|                                               |                                                                                                            |                                           |            | 2001                      |            | 2000
|                                               |                                                                                                            |                                           |            |                           |            |     
|Cash flows from operating activities          
|                                               | Net income (loss)                                                                                          |                                           | $          | 834,646                   |            |      | $          | (72,488    | )         
|                                               | Adjustments to reconcile net income (loss)
to net
cash flows from operations
Depreciation and amortization |                                           |            | 1,753,912                 |            |      |            | 1,749,819  |           
|                                               | Tax benefit for exercise of stock options                                                                  |                                           |            |                          |            |      |            | 252,052    |           
|                                               | Sale of unbilled accounts receivable                                                                       |                                           |            |                          |            |      |            | 1,838,703  |           
|                                               | Changes in working capital                                                                                 |                                           |            | (2,210,949                | )          |      |            | (3,594,997 | )         
|                                               |                                                                                                            |                                           |            |                           |            |      |            |           
|                                               |                                                                                                            | Net cash provided by operating activities |            |                           | 366,317    |      |            |            | 173,089    |  
|                                               |                                                                                                            |                                           |            |                           |            |      |            |           
|Cash flows from investing activities          
|                                               | Acquisition of distribution rights                                                                         |                                           |            |                          |            |      |            | (64,990    | )         
|                                               | Capitalized software development costs                                                                     |                                           |            | (1,614,284                | )          |      |            | (1,127,080 | )         
|                                               | Capital expenditures                                                                                       |                                           |            | (428,389                  | )          |      |            | (894,820   | )         
|                                               |                                                                                                            |                                           |            |                           |            |      |            |           
|                                               |                                                                                                            | Net cash used in investing activities     |            |                           | (2,042,673 | )    |            |            | (2,086,890 | )
|                                               |                                                                                                            |                                           |            |                           |            |      |            |           
|Cash flows from financing activities          
|                                               | Proceeds from sale of common stock                                                                         |                                           |            | 168,418                   |            |      |            | 1,006,585  |           
|                                               |                                                                                                            |                                           |            |                           |            |      |            |           
|                                               |                                                                                                            | Net cash provided by financing activities |            |                           | 168,418    |      |            |            | 1,006,585  |  
|                                               |                                                                                                            |                                           |            |                           |            |      |            |           
|Effect of exchange rate changes on cash        |                                                                                                            |                                           | 153,610    |                           |            |      | 129,442    |           
|                                               |                                                                                                            |                                           |            |                           |            |      |            |           
|Net decrease in cash and cash equivalents      |                                                                                                            |                                           | (1,354,328 | )                         |            |      | (777,774   | )         
|Cash and cash equivalents, beginning of period |                                                                                                            |                                           | 28,078,594 |                           |            |      | 32,135,952 |           
|                                               |                                                                                                            |                                           |            |                           |            |      |            |           
|Cash and cash equivalents, end of period       |                                                                                                            | $                                         | 26,724,266 |                           |            | $    | 31,358,178 |           
|                                               |                                                                                                            |                                           |            |                           |            |      |            |           

See accompanying notes to condensed consolidated financial statements.

6



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LANDMARK SYSTEMS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

Note 1  Basis of Presentation

The accompanying unaudited interim condensed consolidated financial
statements of Landmark Systems Corporation and its subsidiaries (collectively,
the Company) reflect all adjustments which, in the opinion of management, are
necessary for a fair presentation of the results of the interim periods
presented in conformity with generally accepted accounting principles for
interim financial information. Such adjustments are of a normal recurring
nature. Intercompany balances and transactions have been eliminated in
consolidation.

The results of the interim periods presented are not necessarily
indicative of the results for the year. The Companys interim financial
statements should be read in conjunction with the Companys audited
consolidated financial statements and notes thereto for the year ended December
31, 2000, as filed with the Securities and Exchange Commission on Form 10-K.

Note 2  New Accounting Pronouncements

In September 2000, the FASB issued Statement of Financial Accounting
Standards (SFAS) No. 140, Accounting for the Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities. SFAS 140 is effective
for transfers occurring after March 31, 2001 and for disclosures relating to
securitizations transactions and collateral for fiscal years ending after
December 15, 2000. The Company is reviewing the provisions of SFAS 140, and
does not believe the adoption will have a material effect on the Companys
financial condition or results of operation.

Note 3  Earnings Per Share

The following reconciliation of the numerators and denominators is
provided for basic and diluted earnings per share for the three and six months
ended June 30, 2001 and 2000. Basic earnings per share is computed by dividing
the net income by the weighted-average number of common shares outstanding.
Diluted earnings per share is computed by additionally reflecting the potential
dilution that could occur, using the treasury stock method, if warrants and
options to acquire common stock were exercised and resulted in the issuance of
common stock.

|                                         |                                                             |  |             |         |               |  |           |            |  |  |   |      | 
|---------------------------------------- | ----------------------------------------------------------- |  | ----------- | ------- | ------------- |  | --------- | ---------- |  |  | - | ---- | 
|                                         |                                                             |  | Income      |         | Shares        |  | Per-Share
|                                         |                                                             |  | (Numerator) |         | (Denominator) |  | Amount   
|                                         |                                                             |  |             |         |               |  |          
|For the three months ended June 30, 2001
|                                         | Basic earnings per share                                    |  | $           | 730,452 |               |  |           | 12,414,514 |  |  | $ | 0.06 | 
|                                         |                                                             |  |             |         |               |  |           |            |  |  |   |     
|                                         | Effect of dilutive securities
   Stock options and warrants |  |             |        |               |  |           | 29,429     | 
|                                         |                                                             |  |             |         |               |  |           |           
|                                         | Diluted earnings per share                                  |  | $           | 730,452 |               |  |           | 12,443,943 |  |  | $ | 0.06 | 
|                                         |                                                             |  |             |         |               |  |           |            |  |  |   |     

7



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|                                         |                               |                            |   |             |   |               |  |            |        |  |   |       |   | 
|---------------------------------------- | ----------------------------- | -------------------------- | - | ----------- | - | ------------- |  | ---------- | ------ |  | - | ----- | - | 
|                                         |                               |                            |   | Income      |   | Shares        |  | Per-Share 
|                                         |                               |                            |   | (Numerator) |   | (Denominator) |  | Amount    
|                                         |                               |                            |   |             |   |               |  |           
|For the three months ended June 30, 2000
|                                         | Basic earnings per share      |                            | $ | (294,154    | ) |               |  | 13,006,545 |        |  | $ | (0.02 | )
|                                         |                               |                            |   |             |   |               |  |            |        |  |   |      
|                                         | Effect of dilutive securities
|                                         |                               | Stock options and warrants |   |             |  |               |  |            |       | 
|                                         |                               |                            |   |             |   |               |  |           
|                                         | Diluted earnings per share    |                            | $ | (294,154    | ) |               |  | 13,006,545 |        |  | $ | (0.02 | )
|                                         |                               |                            |   |             |   |               |  |            |        |  |   |       |  
|For the six months ended June 30, 2001  
|                                         | Basic earnings per share      |                            | $ | 834,646     |   |               |  | 12,393,470 |        |  | $ | 0.07  |  
|                                         |                               |                            |   |             |   |               |  |            |        |  |   |      
|                                         | Effect of dilutive securities
|                                         |                               | Stock options and warrants |   |             |  |               |  |            | 23,104 | 
|                                         |                               |                            |   |             |   |               |  |           
|                                         | Diluted earnings per share    |                            | $ | 834,646     |   |               |  | 12,416,574 |        |  | $ | 0.07  |  
|                                         |                               |                            |   |             |   |               |  |            |        |  |   |       |  
|For the six months ended June 30, 2000  
|                                         | Basic earnings per share      |                            | $ | (72,488     | ) |               |  | 12,953,823 |        |  | $ | (0.01 | )
|                                         |                               |                            |   |             |   |               |  |            |        |  |   |      
|                                         | Effect of dilutive securities
|                                         |                               | Stock options and warrants |   |             |  |               |  |            |       | 
|                                         |                               |                            |   |             |   |               |  |           
|                                         | Diluted earnings per share    |                            | $ | (72,488     | ) |               |  | 12,953,823 |        |  | $ | (0.01 | )
|                                         |                               |                            |   |             |   |               |  |            |        |  |   |       |  

Note 4  Comprehensive Income

The Companys total comprehensive income (loss) is comprised of net income
(loss) and other comprehensive income (loss), which consists of foreign
currency translation adjustments. Total comprehensive income (loss) for the
three months ended June 30, 2001 and 2000 was $546,175 and $(393,128),
respectively. Total comprehensive income (loss) for the six months ended June
30, 2001 and 2000 was $751,037 and $(86,174), respectively.

Note 5  Segment Reporting

The Company classifies its operations into one industry segment, software
development and related services. The Company categorizes its products and
services into two groups: OS/390 (formerly referred to as mainframe) and
client/server. The Companys revenues by product group consist of the
following:

|              |                |   |                             |            |                           |   |            |            |      |   |            |            |  |   |            |            | 
|------------- | -------------- | - | --------------------------- | ---------- | ------------------------- | - | ---------- | ---------- | ---- | - | ---------- | ---------- |  | - | ---------- | ---------- | 
|              |                |   | Three Months Ended June 30, |            | Six Months Ended June 30,
|              |                |   |                             |            |                          
|              |                |   | 2001                        |            | 2000                      |   | 2001       |            | 2000
|              |                |   |                             |            |                           |   |            |            |     
|OS/390        |                | $ | 12,518,741                  |            |                           | $ | 12,161,758 |            |      | $ | 26,012,890 |            |  | $ | 24,158,678 |           
|Client/server |                |   | 2,160,149                   |            |                           |   | 1,026,276  |            |      |   | 2,793,592  |            |  |   | 1,494,000  |           
|              |                |   |                             |            |                           |   |            |            |      |   |            |            |  |   |            |           
|              | Total revenues |   | $                           | 14,678,890 |                           |   | $          | 13,188,034 |      |   | $          | 28,806,482 |  |   | $          | 25,652,678 | 
|              |                |   |                             |            |                           |   |            |            |      |   |            |            |  |   |            |           

The Company sells its products outside the United States through its
subsidiaries and international distributors. Revenues from international
distributors are presented net of royalties retained by the distributors. The
Companys revenues by country or geographic region are as follows:

|               |                |   |                             |            |                           |   |           |            |      |   |            |            |  |   |            |            | 
|-------------- | -------------- | - | --------------------------- | ---------- | ------------------------- | - | --------- | ---------- | ---- | - | ---------- | ---------- |  | - | ---------- | ---------- | 
|               |                |   | Three Months Ended June 30, |            | Six Months Ended June 30,
|               |                |   |                             |            |                          
|               |                |   | 2001                        |            | 2000                      |   | 2001      |            | 2000
|               |                |   |                             |            |                           |   |           |            |     
|United States  |                | $ | 9,690,269                   |            |                           | $ | 8,211,324 |            |      | $ | 18,902,223 |            |  | $ | 16,599,741 |           
|Germany        |                |   | 772,388                     |            |                           |   | 757,239   |            |      |   | 1,719,504  |            |  |   | 1,740,078  |           
|United Kingdom |                |   | 616,964                     |            |                           |   | 818,784   |            |      |   | 1,536,832  |            |  |   | 1,670,505  |           
|France         |                |   | 838,453                     |            |                           |   | 725,835   |            |      |   | 1,081,669  |            |  |   | 936,406    |           
|Nordic         |                |   | 391,282                     |            |                           |   | 295,043   |            |      |   | 713,499    |            |  |   | 584,261    |           
|Australia      |                |   | 383,118                     |            |                           |   | 444,133   |            |      |   | 696,476    |            |  |   | 692,835    |           
|Benelux        |                |   | 338,805                     |            |                           |   | 393,215   |            |      |   | 756,403    |            |  |   | 735,890    |           
|Other          |                |   | 1,647,611                   |            |                           |   | 1,542,461 |            |      |   | 3,399,876  |            |  |   | 2,692,962  |           
|               |                |   |                             |            |                           |   |           |            |      |   |            |            |  |   |            |           
|               | Total revenues |   | $                           | 14,678,890 |                           |   | $         | 13,188,034 |      |   | $          | 28,806,482 |  |   | $          | 25,652,678 | 
|               |                |   |                             |            |                           |   |           |            |      |   |            |            |  |   |            |           

8



---



The Companys long-lived assets, which consist of fixed assets,
capitalized software and intangible assets, by country or geographic region are
as follows:

|              |                         |   |                           |            |      |   |            |            | 
|------------- | ----------------------- | - | ------------------------- | ---------- | ---- | - | ---------- | ---------- | 
|              |                         |   | Six Months Ended June 30,
|              |                         |   |                          
|              |                         |   | 2001                      |            | 2000
|              |                         |   |                           |            |     
|United States |                         | $ | 10,374,959                |            |      | $ | 12,131,105 |           
|Europe        |                         |   | 222,032                   |            |      |   | 255,073    |           
|Other         |                         |   | 25,039                    |            |      |   | 35,237     |           
|              |                         |   |                           |            |      |   |            |           
|              | Total long-lived assets |   | $                         | 10,622,030 |      |   | $          | 12,421,415 | 
|              |                         |   |                           |            |      |   |            |           

9



---



|ITEM 2. | MANAGEMENTS DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
|------- | -------------------------------------------------------------------------------------

Results of Operations

The following table sets forth the Companys Condensed Consolidated
Statements of Operations expressed as percentages of total revenues for the
periods indicated:

|                                    |                                             |                                                 |                          |      |                             |       |                           |      |      |       |      |      |     |       |      |      |   |       | 
|----------------------------------- | ------------------------------------------- | ----------------------------------------------- | ------------------------ | ---- | --------------------------- | ----- | ------------------------- | ---- | ---- | ----- | ---- | ---- | --- | ----- | ---- | ---- | - | ----- | 
|                                    |                                             |                                                 |                          |      | Three Months Ended June 30, |       | Six Months Ended June 30,
|                                    |                                             |                                                 |                          |      |                             |       |                          
|                                    |                                             |                                                 |                          |      | 2001                        |       | 2000                      |      | 2001 |       | 2000
|                                    |                                             |                                                 |                          |      |                             |       |                           |      |      |       |     
|Revenues                           
|                                    | License revenues                            |                                                 |                          | 45.9 | %                           |       |                           | 41.5 | %    |       |      | 45.4 | %   |       |      | 38.7 | %
|                                    | Maintenance revenues                        |                                                 |                          | 54.1 |                             |       |                           | 58.5 |      |       |      | 54.6 |     |       |      | 61.3 |  
|                                    |                                             |                                                 |                          |      |                             |       |                           |      |      |       |      |      |     |       |      |     
|                                    |                                             |                                                 | Total revenues           |      |                             | 100.0 |                           |      |      | 100.0 |      |      |     | 100.0 |      |      |   | 100.0 | 
|                                    |                                             |                                                 |                          |      |                             |       |                           |      |      |       |      |      |     |       |      |     
|Cost of revenues                   
|                                    | Cost of license revenues                    |                                                 |                          | 2.6  |                             |       |                           | 4.7  |      |       |      | 2.9  |     |       |      | 3.4  |  
|                                    | Cost of maintenance
   revenues             |                                                 |                          | 9.9  |                             |       |                           | 12.5 |      |       |      | 10.1 |     |       |      | 11.4 |  
|                                    | Cost to acquire  distribution rights        |                                                 |                          | 4.1  |                             |       |                           | 4.3  |      |       |      | 4.0  |     |       |      | 4.4  |  
|                                    |                                             |                                                 |                          |      |                             |       |                           |      |      |       |      |      |     |       |      |     
|                                    |                                             |                                                 | Total cost of revenues   |      |                             | 16.6  |                           |      |      | 21.5  |      |      |     | 17.0  |      |      |   | 19.2  | 
|                                    |                                             |                                                 |                          |      |                             |       |                           |      |      |       |      |      |     |       |      |     
|Gross profit                        |                                             |                                                 | 83.4                     |      |                             |       | 78.5                      |      |      |       | 83.0 |      |     |       | 80.8 |     
|                                    |                                             |                                                 |                          |      |                             |       |                           |      |      |       |      |      |     |       |      |     
|Operating expenses                 
|                                    | Sales and marketing                         |                                                 |                          | 46.6 |                             |       |                           | 44.0 |      |       |      | 47.1 |     |       |      | 43.8 |  
|                                    | Product research and   development          |                                                 |                          | 27.4 |                             |       |                           | 29.3 |      |       |      | 26.8 |     |       |      | 29.1 |  
|                                    | General and   administrative                |                                                 |                          | 15.0 |                             |       |                           | 13.0 |      |       |      | 13.3 |     |       |      | 12.7 |  
|                                    |                                             |                                                 |                          |      |                             |       |                           |      |      |       |      |      |     |       |      |     
|                                    |                                             |                                                 | Total operating expenses |      |                             | 89.0  |                           |      |      | 86.3  |      |      |     | 87.2  |      |      |   | 85.6  | 
|                                    |                                             |                                                 |                          |      |                             |       |                           |      |      |       |      |      |     |       |      |      |   |       | 
|Operating loss                      |                                             |                                                 | (5.6                     | )    |                             |       | (7.8                      | )    |      |       | (4.2 | )    |     |       | (4.8 | )   
|                                    |                                             | License of source code of
discontinued products |                          |      | 11.0                        |       |                           |      |     |       |      |      | 5.6 |       |      |      |  |      
|                                    | Interest and other   income, net            |                                                 |                          | 3.2  |                             |       |                           | 4.2  |      |       |      | 3.6  |     |       |      | 4.3  |  
|                                    |                                             |                                                 |                          |      |                             |       |                           |      |      |       |      |      |     |       |      |     
|Income (loss) before   income taxes |                                             |                                                 | 8.6                      |      |                             |       | (3.6                      | )    |      |       | 5.0  |      |     |       | (0.5 | )   
|                                    | Provision for (benefit   from) income taxes |                                                 |                          | 3.6  |                             |       |                           | (1.4 | )    |       |      | 2.1  |     |       |      | (0.2 | )
|                                    |                                             |                                                 |                          |      |                             |       |                           |      |      |       |      |      |     |       |      |     
|                                    |                                             |                                                 |                          |      |                             |       |                           |      |      |       |      |      |     |       |      |      |   |       | 
|Net income (loss)                   |                                             |                                                 | 5.0                      | %    |                             |       | (2.2                      | )%   |      |       | 2.9  | %    |     |       | (0.3 | )%  
|                                    |                                             |                                                 |                          |      |                             |       |                           |      |      |       |      |      |     |       |      |     

TOTAL REVENUES. Total revenues increased 11.3% from $13.2 million for the
three months ended June 30, 2000, to $14.7 million for the three months ended
June 30, 2001, and increased 12.3% from $25.7 million to $28.8 million for the
six months ended June 30, 2000 and 2001, respectively. Revenues for the three
months ended June 30, 2001 from OS/390 (formerly referred to as mainframe)
products and services were $12.5 million, an increase of 2.9% from the same
period in the prior year; revenues for the three-month period ended June 30,
2001 from client/server products and services were $2.2 million, an increase of
110.5% from the same period in the prior year. Revenues for the first six
months of 2001 from OS/390 products and services were $26.0 million, an
increase of 7.7% from the same period in the prior year; revenues for the first
six months of 2001 from client/server products and services were $2.8 million,
an increase of 87.0% from the same period in the prior year.

LICENSE REVENUES. License revenues increased 22.9% from $5.5 million for
the three months ended June 30, 2000, to $6.7 million for the three months
ended June 30, 2001, and increased 31.9% from $9.9 million to $13.1 million for
the six months ended June 30, 2000 and 2001, respectively. License revenues
increased in part due to the continued acceptance of three new products
introduced in the fourth quarter of 2000 and first quarter of 2001; the
products are TMON for TCP/IP (a networking product), TMON for USS (an
e-business infrastructure product) and TMON for IMS (a transaction processing
product). Additionally, the Company closed several large deals during the
first and second quarters of 2001. The Company has noted a slowing of new
license sales in the early part of the third quarter. The Company attributes
this slowing to the decline in general economic conditions.

MAINTENANCE REVENUES. Maintenance revenues increased 3.1% from $7.7
million for the three months ended June 30, 2000, to $7.9 million for the three
months ended June 30,2001, and were essentially flat at $15.7 million for the
six months ended June 30, 2000 and 2001, respectively. The second quarter
increases are primarily due to contractual rate increases.

COST OF LICENSE REVENUES. Cost of license revenues includes amortization
of capitalized software costs, product royalties,

10



---



materials and packaging expenses. Costs of license revenues were $0.6
million and $0.4 million for the three months ended June 30, 2000 and 2001,
representing 11.3% and 5.8% of license revenues in such periods. Costs of
license revenues were $0.9 and $0.8 million for the six months ended June 30,
2000 and 2001, respectively, representing 8.8% and 6.4% of license revenues in
such periods. The decrease from 2000 to 2001 is primarily due to a decrease in
third-party royalties resulting from declines in sales of products covered by
various royalty agreements.

COST OF MAINTENANCE REVENUES. Cost of maintenance revenues consists of
personnel and related costs for customer support, training and consulting
services. Costs of service revenues were $1.7 million and $1.5 million for the
three months ended June 30, 2000 and 2001, respectively, representing 21.5% and
18.4% of service revenues in such periods. Costs of maintenance revenues were
$2.9 million and $2.9 million for the six months ended June 30, 2000 and 2001,
respectively, representing 18.5% and 18.6% of service revenues in such periods.
The second quarter decrease in cost of maintenance is primarily due to
elevated costs related to the start-up during 2000 of the professional services
group to provide post sales training and consulting services for some of the
Companys client/server products. Since the discontinuation of these
products in November 2000, the professional services organization has been reduced in size and
refocused to provide training services for the Companys OS/390 products.

COST TO ACQUIRE DISTRIBUTION RIGHTS. Cost to acquire distribution rights
includes royalties paid related to the acquisition of distribution rights as
well as the straight-line amortization of international distribution rights
that have been reacquired from third party resellers. Cost to acquire
distribution rights for each of the three month periods ended June 30, 2000 and 2001 were $0.6
million. Cost to acquire distribution rights
for the six months ended June 30, 2000 and 2001 were $1.1 million and $1.2
million, respectively.

SALES AND MARKETING. Sales and marketing includes personnel and related
costs for the Companys direct sales organization, marketing staff and
promotional expenses. Sales and marketing expenses were $5.8 million and $6.8
million for the three months ended June 30, 2000 and 2001, respectively,
representing 44.0% and 46.6% of total revenues in such periods. Sales and
marketing expenses were $11.2 million and $13.6 million for the six months
ended June 30, 2000 and 2001, respectively, representing 43.8% and 47.1% of
total revenues in such periods. The increase in sales and marketing expenses
continues to be primarily due to increased commission expenses caused by the
increased license revenues.

PRODUCT RESEARCH AND DEVELOPMENT. Product research and development
includes personnel and related costs for the Companys development staff.
Product research and development expenses were $3.9 million and $4.0 million
for the three months ended June 30, 2000 and 2001, respectively, representing
29.3% and 27.5% of total revenues in such periods. Product research and
development expenses were $7.5 million and $7.7 million for the six months
ended June 30, 2000 and 2001, respectively, representing 29.1% and 26.8% of
total revenues in such periods. The decrease in product research and
development expenses as a percentage of revenue is primarily due to the
increase in revenues.

GENERAL AND ADMINISTRATIVE. General and administrative includes salaries
and related costs of administration, finance and management personnel, as well
as legal and accounting fees. General and administrative expenses were $1.7
million and $2.2 million for the three months ended June 30, 2000 and 2001,
respectively, representing 13.0% and 15.0% of total revenues in such periods.
General and administrative expenses were $3.2 million and $3.8 million for the
six months ended June 30, 2000 and 2001, respectively, representing 12.7% and
13.3% of total revenues in such periods. The increase in general and
administrative expenses from 2000 to 2001 is primarily due to the write-off of
a large uncollectible receivable balance during 2001. The Company believes
that reasonable reserves have been established in this area.

INTEREST AND OTHER INCOME, NET. Net interest and other income includes
interest income earned on cash balances, interest income recorded on
installment receivables, interest expense incurred on term and revolving credit
facilities, bank fees and exchange gains (losses) incurred by the Company on
transactions denominated in foreign currencies. Net interest and other income
totaled $0.55 million and $0.46 million for the three months ended June 30,
2000 and 2001, respectively. Net interest and other income totaled $1.1
million and $1.0 million for the six months ended June 30, 2000 and 2001. Of
these amounts, $0.4 million and $0.2 million represent interest earned on the
Companys bank balances for the three months ended June 30, 2000 and 2001,
respectively.

LICENSE OF SOURCE CODE OF
DISCONTINUED PRODUCTS. During the quarter ended June 30, 2001, the
Company concluded an agreement with a company in Japan to sell the source code
for parts of the Companys PerformanceWorks for Unix and NT products which were
discontinued in the fourth quarter of 2000. This agreement provides the
non-exclusive right to use the source code and to create derivative software
products for sale in the Japanese and Asian markets and to branches of
Japanese-owned companies outside of that territory. The total sales price for
this source code was $2.0 million. Of that amount, the Company recognized
$1.85 million in the quarter ended June 30, 2001 and

11



---



deferred $0.15 million to account for the Companys commitment of the time
of one of its engineers to assist Hitachi in their commercialization efforts
over a 12-month period. Direct costs associated with the Hitachi sale amounted
to $0.2 million comprising banking, legal and sales incentive costs. The sale
is not considered to be part of the Companys normal business
operations and therefore has been so classified;
similar transactions are not expected to occur in the future.

LIQUIDITY AND CAPITAL RESOURCES

At June 30, 2001, the Company had cash and cash equivalents of $26.7
million and working capital of $24.8 million. During the six months ended June
30, 2001, net cash provided by operating and financing activities were $0.4
million and $0.2 million, respectively, while net cash used in investing
activities was $2.0 million. The Company invests its cash, which includes the
$12.0 million proceeds from the Companys initial public offering in November
1997, in a money market fund. The Company had no debt as of June 30, 2001,
other than normal trade payables and accrued liabilities. Stockholders equity
at June 30, 2001 was $35.2 million.

In March 1999, the Company obtained a revolving line of credit in the
amount of $10.0 million. The line of credit, which was granted on an unsecured
basis, has a floating interest rate of LIBOR plus 1.35%. The line of credit
has been extended through June 30, 2002 .

The Company continues to finance its growth through funds generated from
operations. For the six months ended June 30, 2001, cash flow from operations
was $0.4 million.

The Companys investing activities primarily include expenditures for
fixed assets in support of the Companys product development activities and
infrastructure, capitalized software development costs and costs related to the
acquisition of distribution rights. During the six months ended June 30, 2001,
the Company invested $0.4 million in fixed assets, consisting primarily of
computer equipment to expand and upgrade the Companys development activities.

The Company believes that cash and cash equivalents at June 30, 2001,
cash flow generated from operations and the line of credit will provide
sufficient liquidity to meet its needs for at least the next twelve months. To
the extent the Company makes acquisitions of other companies, products or
technologies, the Company may use working capital, sell or issue additional
equity or debt securities or use credit facilities.

NEW ACCOUNTING PRONOUNCEMENTS

In September 2000, the FASB issued Statement of Financial Accounting
Standards (SFAS) No. 140, Accounting for the Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities. SFAS 140 is effective
for transfers occurring after March 31, 2001 and for disclosures relating to
securitizations transactions and collateral for fiscal years ending after
December 15, 2000. The Company is reviewing the provisions of SFAS 140, and
does not believe the adoption will have a material effect on the Companys
financial condition or results of operation.

In June 2001, the FASB issued
SFAS No. 141, "Business Combinations", which addresses the accounting
and reporting for business combinations, and SFAS No. 142, "Goodwill
and Other Intangible Assets", which addresses the accounting and
reporting for acquired goodwill and other intangible assets. SFAS 141
and SFAS 142 are effective January 1, 2002 for the Company. The
Company is in the process of reviewing the new pronouncements and
does not anticipate that adoption will have a material impact on the
Company's financial condition or results of operations.

CAUTIONARY STATEMENT PURSUANT TO THE PRIVATE LITIGATION REFORM ACT OF 1995

Some of the statements in this Quarterly Report on Form 10-Q are
forward-looking within the meaning of the Private Securities Litigation
Reform Act of 1995 and are related to anticipated future operating results.
Future operating results may be impeded by single or combined events and/or
circumstances that have not been presently anticipated. Forward-looking
statements are based on Landmark managements current expectations and
assumptions, which may be affected by a number of factors, including, without
limitation, the significant percentage of sales consummated in the last few
days of each calendar quarter, changes in the Companys business strategy and
focus, continued softness in the mainframe enterprise software market,
competitive product introductions resulting from rapid technological advances,
price competition, any failure or delay in the Companys ability to develop and
introduce new products, uncertainty of customer acceptance of new products,
seasonal factors affecting the Companys sales, the Companys ability to
attract and retain qualified technical, sales, managerial and other key
personnel, the Companys ability to manage expenses effectively, foreign
currency risk, and other factors. Therefore, there can be no assurance that
actual future results will not differ materially from anticipated results.

12



---



Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The Company has subsidiaries in the United Kingdom, Italy, Germany,
France, The Netherlands, Sweden, Spain, Australia, Hong Kong and Singapore that
act as distributors of its products. Additionally, the Company uses third
party distributors to market and distribute its products in other international
regions. Transactions conducted by the subsidiaries are typically denominated
in the local country currency, while royalty payments from the distributors are
typically denominated in U.S. dollars. As a result, the Company is primarily
exposed to foreign exchange rate fluctuations as the financial results of its
subsidiaries are translated into U.S. dollars in consolidation. As exchange
rates vary, these results, when translated, may vary from expectations and
impact overall expected profitability. Through and as of June 30, 2001, the
Companys exposure was not material to the overall financial statements taken
as a whole. The Company has not entered into any foreign currency hedging
transactions with respect to its foreign currency market risk.

The Companys exposure to market risk for changes in interest rates
relates primarily to unbilled accounts receivable. At June 30, 2001, the
Company has $19.3 million of unbilled accounts receivable, which
approximates their estimated fair market value. If market interest rates had been 10%
higher at June 30, 2001, the fair market value of the unbilled accounts
receivable would have decreased by approximately $0.1 million.

PART II  OTHER INFORMATION

Item 1. Legal Proceedings



| |     
| | ----
| | None

Item 2. Changes in Securities and Use of Proceeds



| |                                                                                                                                                                                                                                                                                   
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (d) The net proceeds to the Company from the initial public offering
(SEC File No. 333-35629 effective November 18, 1997) were
approximately $12 million and have been deposited by the Company in a
money market fund investing solely in short-term U.S. government
obligations.

Item 3. Defaults Upon Senior Securities



| |     
| | ----
| | None

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



| |                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------
| | The Annual Meeting of the Stockholders was held on May 9, 2001 at the
Companys headquarters, 12700 Sunrise Valley Drive, Reston, Virginia.

|                                                                                                        |  |  |            |  |  |  |            | 
|------------------------------------------------------------------------------------------------------- |  |  | ---------- |  |  |  | ---------- | 
|1. PROPOSAL ONE- Election of directors                                                                 
|Nominees:                                                                                               |  |  | For        |  |  |  | Withheld   | 
|                                                                                                        |  |  |            |  |  |  |            | 
|Patrick H. McGettigan                                                                                   |  |  | 12,105,519 |  |  |  | 16,070     | 
|Katherine K. Clark                                                                                      |  |  | 12,105,519 |  |  |  | 16,070     | 
|T. Eugene Blanchard                                                                                     |  |  | 12,105,520 |  |  |  | 16,069     | 
|Dennis J. Bowman                                                                                        |  |  | 12,105,520 |  |  |  | 16,069     | 
|James P. Donehey                                                                                        |  |  | 12,105,520 |  |  |  | 16,069     | 
|Patrick W. Gross                                                                                        |  |  | 12,105,520 |  |  |  | 16,069     | 
|Marie C. Johns                                                                                          |  |  | 12,105,520 |  |  |  | 16,069     | 
|Sudhakar V. Shenoy                                                                                      |  |  | 12,105,520 |  |  |  | 16,069     | 
|                                                                                                        |  |  |            |  |  |  |            | 
|2. PROPOSAL TWO Ratification of selection of
PricewaterhouseCoopers LLP as independent accountants
for |  |  |            |  |  |  | 12,105,988 | 
|Against                                                                                                 |  |  |            |  |  |  | 7,373      | 
|Abstain                                                                                                 |  |  |            |  |  |  | 8,228      | 

13



---



Item 5. Other Information



| |     
| | ----
| | None

Item 6. Exhibits and Reports of Form 8-K

(a) Exhibits

|     |  |                                                                                                                                                                                                                                                                        
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|3.1  |  | Articles of Incorporation (incorporated by reference to
Exhibit 3.1 forming a part of the Companys registration
statement on Form S-1 (File No. 333-35629) filed with the
Securities and Exchange Commission under the Securities Act of
1933, as amended.)           
|     |  |                                                                                                                                                                                                                                                                        
|3.2  |  | Amended and Restated Bylaws (incorporated by reference to
Exhibit 3.2 forming a part of the Companys registration
statement on Form S-1 (File No. 333-35629) filed with the
Securities and Exchange Commission under the Securities Act of
1933, as amended.)         
|     |  |                                                                                                                                                                                                                                                                        
|4.1  |  | Reference is made to Exhibits 3.1 and 3.2                                                                                                                                                                                                                              
|     |  |                                                                                                                                                                                                                                                                        
|4.2  |  | Specimen certificate of Common Stock (incorporated by
reference to Exhibit 4.2 forming a part of the Companys
registration statement on Form S-1 (File No. 333-35629) filed
with the Securities and Exchange Commission under the
Securities Act of 1933, as amended.)
|     |  |                                                                                                                                                                                                                                                                        
|10.2 |  | 1989 Stock Incentive Plan (incorporated by reference to
Exhibit 10.2 forming a part of the Companys registration
statement on Form S-1 (File No. 333-35629) filed with the
Securities and Exchange Commission under the Securities Act of
1933, as amended.)          
|     |  |                                                                                                                                                                                                                                                                        
|10.3 |  | 1991 Employee Stock Purchase Plan (incorporated by reference
to Exhibit 10.3 forming a part of the Companys registration
statement on Form S-1 (File No. 333-35629) filed with the
Securities and Exchange Commission under the Securities Act of
1933, as amended.)  
|     |  |                                                                                                                                                                                                                                                                        
|10.4 |  | 1992 Executive Stock Incentive Plan (incorporated by reference
to Exhibit 10.4 forming a part of the Companys registration
statement on Form S-1 (File No. 333-35629) filed with the
Securities and Exchange Commission under the Securities Act of
1933, as amended.)
|     |  |                                                                                                                                                                                                                                                                        
|10.5 |  | 1994 Executive Stock Incentive Plan (incorporated by reference
to Exhibit 10.4 forming a part of the Companys registration
statement on Form S-1 (File No. 333-35629) filed with the
Securities and Exchange Commission under the Securities Act of
1933, as amended.)

14



---



|     |  |                                                                                                                                                                                                                                                                                                                              
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |  |                                                                                                                                                                                                                                                                                                                              
|10.6 |  | 1996 Advisory Board and directors Stock Incentive Plan
(incorporated by reference to Exhibit 10.6 forming a part of
the Companys registration statement on Form S-1 (File No.
333-35629) filed with the Securities and Exchange Commission
under the Securities Act of 1933, as amended.)                                   
|     |  |                                                                                                                                                                                                                                                                                                                              
|10.7 |  | 1998 Employee Stock Purchase Plan (incorporated by reference
to Exhibit 10.3 forming a part of the Companys registration
statement on Form S-1 (File No. 333-35629) filed with the
Securities and Exchange Commission under the Securities Act of
1933, as amended.)                                                        
|     |  |                                                                                                                                                                                                                                                                                                                              
|10.8 |  | Deed of Lease between Boston Properties Limited Partnership
and Landmark Systems Corporation dated January 30, 1998
(incorporated by reference to Exhibit 10.8 forming a part of
the Companys Form 10-K for the year ended December 31,
1999.)                                                                              
|     |  |                                                                                                                                                                                                                                                                                                                              
|10.9 |  | Employment Agreement between the Company and Frederick S.
Rolandi, III dated June 2, 2000 (incorporated by reference to
Exhibit 10.1 forming a part of the Companys registration
statement on Form S-1 (File No. 333-35629) filed with the
Securities and Exchange Commission under the Securities Act
of 1933, as amended.)

(b) Reports on Form 8-K



| |     
| | ----
| | None

15



---



SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

LANDMARK SYSTEMS CORPORATION

|      |  |                 |  |     |  |                                                                                                                                                      
|----- |  | --------------- |  | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------
|Date: |  | August 20, 2001 |  | By: |  | /s/ Katherine K. Clark
        Katherine K. Clark
        President and Chief Executive Officer (Duly
        Authorized Officer)                    
|      |  |                 |  |     |  |                                                                                                                                                      
|Date: |  | August 20, 2001 |  | By: |  | /s/ Frederick S. Rolandi, III
        Frederick S. Rolandi, III
        Vice President and Chief Financial Officer
        (Chief Accounting Officer)

16