<PAGE>
 
                       SECURITIES AND EXCHANGE COMMISSION


                             Washington, D. C. 20549

                                ---------------

                                    FORM 10-Q

           X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

              SECURITIES EXCHANGE ACT OF 1934

                For the quarterly period ended September 28, 1997

                                       OR

           _  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

              SECURITIES EXCHANGE ACT OF 1934



                      Commission file number 1-7760/0-20290

                          Computervision Corporation
                 ---------------------------------------------
            (Exact name of registrant as specified in its charter)



           Delaware                                       04-2491912
-------------------------------                        -----------------
(State or other jurisdiction of                        (I.R.S. employer
incorporation or organization)                        identification no.)

100 Crosby Drive, Bedford, Massachusetts 01730
---------------------------------------------------
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (617) 275-1800
------------------------------------------------------------------

--------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months (or such shorter period that the registrant was
required to file such reports), and (2) has been subject to the filing
requirements for the past 90 days.
Yes  X     No
    ---       ---

At November 10, 1997 the registrant had outstanding an aggregate of 63,725,393 
shares of its Common Stock, $.01 par value.

                                       1
<PAGE>
 
                           Computervision Corporation

                                      INDEX


PART I.  FINANCIAL INFORMATION                              Page

Consolidated Balance Sheets at December 31, 1996 and 
September 28, 1997 (Unaudited)                               3

Consolidated Statements of Operations (Unaudited) for 
the Three and Nine Months Ended September 29, 1996 
and September 28, 1997                                       4

Consolidated Statements of Cash Flows (Unaudited) 
for the Nine Months Ended September 29, 1996 and 
September 28, 1997                                           5

Notes to Consolidated Financial Statements (Unaudited)      6-9

Management's Discussion and Analysis of Financial 
Condition and Results of Operations                        10-13

PART II.  OTHER INFORMATION                                 14

Signatures                                                  15

EXHIBIT INDEX                                               16

                                       2
<PAGE>
 
                                      COMPUTERVISION CORPORATION
                                     CONSOLIDATED BALANCE SHEETS
                                   (IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE> 
<CAPTION> 
                                                                                          (Unaudited)
                                                                        December 31,     September 28,
ASSETS                                                                      1996             1997
----------------------------------------------------------------------  --------------   --------------
<S>                                                                     <C>              <C>
CURRENT ASSETS
    Cash and cash equivalents                                                 $38,565          $25,948
    Accounts receivable, less allowance for doubtful
      accounts of $2,929 and $2,845, respectively                             102,509           48,465
    Current deferred income taxes                                               7,448            7,091
    Prepaid expenses and other current assets                                  16,019           12,775
                                                                        --------------   --------------
        TOTAL CURRENT ASSETS                                                  164,541           94,279

PROPERTY AND EQUIPMENT, NET                                                    31,055           10,007
DEFERRED INCOME TAX ASSETS                                                      4,113            3,101
CAPITALIZED SOFTWARE                                                            1,276            3,284
DEFERRED FINANCE COSTS                                                          3,734            1,915
OTHER ASSETS                                                                    3,626            4,092
                                                                        --------------   --------------
                                                                             $208,345         $116,678
                                                                        ==============   ==============

LIABILITIES AND STOCKHOLDERS' DEFICIT
----------------------------------------------------------------------

CURRENT LIABILITIES
    Accounts payable                                                          $19,776          $29,255
    Notes payable and current portion of long-term debt                         9,888           18,379
    Accrued compensation, severance and related costs                          57,482           55,563
    Deferred revenue and customer advances                                     40,503           31,661
    Accrued and deferred income taxes                                          15,019           16,272
    Other current liabilities and accrued expenses                             81,822           89,315
                                                                        --------------   --------------
        TOTAL CURRENT LIABILITIES                                             224,490          240,445
                                                                        --------------   --------------

DEFERRED INCOME TAXES                                                          30,174           29,851
LONG-TERM DEBT, LESS CURRENT PORTION                                          217,346          217,383
OTHER LONG-TERM LIABILITIES                                                    53,110           57,557
STOCKHOLDERS' DEFICIT
    Preferred stock, $0.01 par value; 5,000,000 shares
      authorized; none issued and outstanding
    Common stock, $0.01 par value; 100,000,000 shares
      authorized; 63,509,999 and 63,701,315 shares, respectively,
      issued and outstanding                                                      635              637
    Capital in excess of par value                                          1,186,109        1,186,762
    Retained deficit                                                       (1,511,148)      (1,622,498)
    Cumulative translation adjustment                                           7,629            6,541
                                                                        --------------   --------------
         TOTAL STOCKHOLDERS' DEFICIT                                         (316,775)        (428,558)
                                                                        --------------   --------------
                                                                             $208,345         $116,678
                                                                        ==============   ==============
</TABLE> 

                The accompanying notes are an integral part of 
                   these consolidated financial statements.

                                       3
<PAGE>
 
                          COMPUTERVISION CORPORATION
               CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE> 
<CAPTION> 
                                                                Three Months Ended                     Nine Months Ended
                                                        -----------------------------------    ----------------------------------
                                                          September 29,       September 28,      September 29,    September 28,
                                                             1996               1997                1996              1997
                                                        ----------------   ----------------    ----------------  ----------------
<S>                                                     <C>                <C>                 <C>               <C>
SOFTWARE REVENUE
    Product                                                     $55,028            $18,637            $138,918           $61,886
    Services                                                     26,783             23,551              83,220            73,251
                                                        ----------------   ----------------    ----------------  ----------------
       Total Software Revenue                                    81,811             42,188             222,138           135,137
OTHER SERVICES REVENUE                                           41,442              8,889             133,307            82,224
                                                        ----------------   ----------------    ----------------  ----------------
       Total Revenue                                            123,253             51,077             355,445           217,361
COST OF SALES
    Software
        Product                                                   4,092              3,017              11,828             9,150
        Services                                                 16,278             14,538              48,362            47,603
    Other services                                               34,969              9,293             102,607            74,807
                                                        ----------------   ----------------    ----------------  ----------------
       Total Cost of Sales                                       55,339             26,848             162,797           131,560
                                                        ----------------   ----------------    ----------------  ----------------
GROSS PROFIT                                                     67,914             24,229             192,648            85,801
SELLING AND ADMINISTRATIVE EXPENSE
    Software                                                     29,721             21,489              85,156            77,875
    Other Services                                                5,643              1,345              17,651            11,788
RESEARCH, DEVELOPMENT AND
   ENGINEERING EXPENSE
    Software                                                      9,622              9,930              30,012            29,827
    Other Services                                                  175                131                 525               400
NON-RECURRING CHARGES
    Software                                                          0                  0                   0            45,000
    Other Services                                                    0                  0                   0             7,000
                                                        ----------------   ----------------    ----------------  ----------------
OPERATING INCOME (LOSS)
    Software                                                     22,098             (6,786)             46,780           (74,318)
    Other Services                                                  655             (1,880)             12,524           (11,771)
                                                        ----------------   ----------------    ----------------  ----------------
        Total Operating Income (Loss)                            22,753             (8,666)             59,304           (86,089)
INTEREST AND OTHER EXPENSE, NET                                   7,874              8,936              23,040            25,225
                                                        ----------------   ----------------    ----------------  ----------------
INCOME (LOSS) BEFORE INCOME TAXES                                14,879            (17,602)             36,264          (111,314)
PROVISION FOR INCOME TAXES                                        1,785                                  4,349
                                                                                         -                                     -
                                                        ----------------   ----------------    ----------------  ----------------
NET INCOME (LOSS)                                               $13,094           ($17,602)            $31,915         ($111,314)
                                                        ================   ================    ================  ================
EARNINGS (LOSS) PER SHARE                                         $0.20             ($0.28)              $0.49            ($1.75)
                                                        ================   ================    ================  ================
WEIGHTED AVERAGE SHARES OUTSTANDING                              64,478             63,701              64,782            63,614
                                                        ================   ================    ================  ================
</TABLE> 
                The accompanying notes are an integral part of 
                   these consolidated financial statements.

                                       4
<PAGE>
 
                       COMPUTERVISION CORPORATION
           CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                             (IN THOUSANDS)

<TABLE> 
<CAPTION> 
                                                                                    Nine Months Ended
                                                                             --------------------------------
                                                                             September 29,     September 28,
CASH FLOWS FROM (USED FOR) OPERATIONS                                            1996              1997
-------------------------------------------------------------------------    --------------    --------------
<S>                                                                          <C>               <C>
    Net Income (Loss)                                                              $31,915         ($111,314)
    Add items not requiring cash:
        Depreciation of property and equipment                                      16,037            10,235
        Amortization of intangibles                                                  1,482               584
        Amortization of finance costs and debt discounts                             2,185             2,797
        Provision for doubtful accounts                                                (31)               65
        Non-cash portion of non-recurring charge                                         0             6,634
    Gain on sale of CVSI                                                                 0            (1,255)
    Changes in assets and liabilities:
        Accounts receivable                                                        (23,180)           47,612
        Prepaid expenses and other                                                  (3,228)            1,680
        Accounts payable, accrued expenses and income taxes                        (45,267)            1,709
                                                                             --------------    --------------
            Cash flows used for continuing operations                              (20,087)          (41,253)
                                                                             --------------    --------------
INVESTING ACTIVITIES
-------------------------------------------------------------------------
    Expenditures for property and equipment                                         (7,929)           (6,387)
    Net proceeds from sale of CVSI                                                       0            30,100
    (Increase) decrease in other assets                                                464              (989)
    Acquisition                                                                          0            (1,600)
                                                                             --------------    --------------
        Total cash flows from (used for) investments                                (7,465)           21,124
                                                                             --------------    --------------
FINANCING ACTIVITIES
-------------------------------------------------------------------------
    Increase in notes payable                                                          260             8,368
    Payments on long-term borrowings                                                (1,615)             (818)
    Issuance of common stock under Employee Stock Purchase Plan                        308               173
    Issuance of common stock under Stock Option Plan                                 2,248               482
                                                                             --------------    --------------
       Total cash flows from financing activities                                    1,201             8,205
                                                                             --------------    --------------
    Foreign exchange impact on cash                                                 (1,141)             (693)
                                                                             --------------    --------------
    Net decrease in cash and cash equivalents                                      (27,492)          (12,617)
    Cash and cash equivalents at beginning of period                                50,979            38,565
                                                                             --------------    --------------
    Cash and cash equivalents at end of period                                     $23,487           $25,948
                                                                             ==============    ==============
    Supplementary data requirements:
        Cash interest paid                                                         $25,271           $21,664
        Cash taxes paid                                                               $625            $1,399
</TABLE> 

                The accompanying notes are an integral part of 
                   these consolidated financial statements.

                                       5
<PAGE>
 
The accompanying unaudited financial statements have been prepared by the
Company pursuant to the rules and regulations of the Securities and Exchange
Commission, and reflect all adjustments (all of which are of a normal recurring
nature) which, in the opinion of management, are necessary for a fair statement
of the results of the interim periods presented. The unaudited results of
operations for the quarter and nine months ended September 28, 1997 are not
necessarily an indication of the results of operations for the full year. These
financial statements do not include all disclosures associated with annual
financial statements and, accordingly, should be read in conjunction with the
financial statements and footnotes for the year ended December 31, 1996 included
in the Company's Form 10-K, as filed on Form 8-K on November 12, 1997, where
certain terms have been defined. All amounts are in thousands, except per share
data.

(1) NOTES PAYABLE AND LONG-TERM DEBT

<TABLE> 
<CAPTION> 
                                                 DECEMBER 31,    SEPTEMBER 28,
                                                    1996             1997
                                                 ------------    -------------
<S>                                              <C>             <C>
Notes payable:
  Notes Payable to Banks                           $  3,277        $  3,145
  Revolving Credit Arrangement                           --           8,500
                                                   --------        --------
    Total Notes Payable                            $  3,277        $ 11,645
                                                   ========        ========

Long-Term Debt:
  8% Convertible Subordinated Debentures,
   due 2009, net of unamortized discount
   of $17,456 and $16,524, and current
   portion of $5,500 and $5,500, respectively        31,154          32,086
  11 3/8% Senior Subordinated Notes, due 1999       175,000         175,000
  Other Long-Term Debt, less current portion
   of $1,111 and $1,234                              11,192          10,297
                                                   --------        --------
    Total Long-Term Debt, less current portion     $217,346        $217,383
                                                   ========        ========
</TABLE> 
   

Notes Payable to Banks

Notes payable to banks consist of borrowings by the Company's international
subsidiaries under certain of the Company's lines of credit. Borrowings under
such lines bear interest at prevailing or negotiated rates.

Revolving Credit Arrangement

In 1995, the Company entered into a three-year, $50,000 credit facility (the
"Revolving Credit Facility") with its lending banks. The Revolving Credit
Facility provided for a revolving line of credit of $50,000 for working capital
and for sinking fund payments on the Company's 8% Convertible Subordinated
Debentures (unpaid principal balance of $54,110 at December 31, 1996), of which
$20,000 is available for letters of credit. Due to a financial covenant
violation which occurred in the first quarter of 1997, the Company amended and
restated the Revolving Credit Facility on May 22, 1997, to reset the financial
covenants to conform with the Company's revised business plan for 1997 and to
implement a borrowing base limitation. Under the amended facility, the Company
could borrow funds secured by the accounts receivable of the Company,
Computervision Pty. Limited (Australia), Computervision SA (France),
Computervision GmbH (Germany) and Computervision Limited (U.K.). Pursuant to the
terms of the Revolving Credit Facility, the Company granted the lenders a
security interest in all of the Company's U.S. assets.

As a result of the shortfall in revenue and the non-recurring charge of $45,000
in the quarter ended June 29, 1997, the Company was unable to satisfy certain of
the financial covenants, as amended, under the Revolving Credit Facility. The
default was not waived by the lending banks. During the third quarter, the
Company repaid all of the outstanding borrowings under the Revolving Credit
Facility, including cash collateralizing the letters of credit (see Note 3 "Sale
of Business Unit") and has since terminated the agreement.

On September 3, 1997, the Company entered into a bridge loan facility with
an affiliate of M.D. Sass Investors Services, Inc., a major shareholder of the
Company, for a bridge term loan of $8,500. (See also Note 5 "Related Party
Transactions".) In October 1997, the Company closed $17,500 in bridge financing
with Foothill Capital Corporation ("Foothill"), a

                                       6
<PAGE>
 
subsidiary of Norwest Corporation. A portion of the credit facility was used to
repay the existing $8,500 bridge term loan. The $17,500 bridge financing is
secured by the Company's assets and matures on November 15, 1997 and accrues
interest at a rate of 12.5%. On November 11, 1997, the Company closed a $47,250
credit facility with Foothill, which is secured by all of the Company's assets
and will have a term of 18 months. The Company used this facility to repay the
$17,500 bridge financing. Of the $47,250 facility, $41,000 is subject to a fixed
borrowing base which does not fluctuate, and the remainder is subject to
available eligible accounts receivable. In addition to this proposed credit
facility, the Company requires significant additional financing in order to meet
its current obligations as they come due. If the Company were unable to secure
such additional financing, it would be unable to meet its remaining principal
short-term liquidity requirements, including debt service, restructuring
payments, normal working capital and other cash requirements, which would have a
material adverse effect on the Company's on-going operations and would adversely
affect the solvency of the Company. No assurances can be given that the Company
will be successful in securing such additional financing. These issues raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.

On November 4, 1997, the Company announced a definitive merger agreement with
Parametric Technology Corporation ("PTC"), under which PTC will acquire the
Company in a stock for stock transaction. Under the terms of the transaction,
each share of the Company's common stock will be exchanged for 0.0866 shares of
PTC common stock. The transaction is intended to be accounted for as a pooling
of interests and to qualify as a tax free reorganization. The agreement is
subject to several conditions, including regulatory approvals and the approval
of the Company's shareholders. If the merger is not consummated, the Company
will have to either substantially curtail its business operations or seek
protection under the bankruptcy laws.

Interest and Other Expense, net

Interest and Other Expense, net for the periods ended September 29, 1996 and
September 28, 1997 consists of the following:

<TABLE> 
<CAPTION> 
                                                   Three Months Ended                         Nine Months Ended
                                          --------------------------------------    --------------------------------------
                                            September 29,       September 28,        September 29,        September 28,
                                                1996                 1997                 1996                 1997
                                          ------------------   -----------------    -----------------    -----------------
<S>                                         <C>                   <C>                   <C>                 <C>
Interest income                              $   (461)             $   (134)             $  (1,262)          $   (794)
Interest expense                                8,345                 8,909                 24,369             24,878
Other expense, net                                (10)                  161                    (67)             1,141
                                             --------              --------              ---------           --------
     Interest and other expense, net         $  7,874              $  8,936              $  23,040           $ 25,225
                                             ========              ========              =========           ========    
</TABLE> 

(2) Non-recurring Charge

The results for the second quarter of 1997 include a non-recurring charge of
$45,000, related primarily to the restructuring of the software business in
order to reduce the costs in the business and improve operating results in
future periods. Of the $45,000 non-recurring charge, $38,000 represents the cash
portion and consists of primarily personnel reductions of approximately 300
positions and the closing of facilities. During the third quarter and first nine
months of 1997, the Company paid out approximately $3,746 and $4,327,
respectively, related to personnel reductions and facility closings.

The results for the first quarter of 1997 include a non-recurring charge of
$7,000 related primarily to the reorganization of the OSS business as a stand
alone business unit (approximately $4,360 related to personnel reductions of
approximately 60 positions in OSS and the closing of facilities), as well as
expenses incurred in connection with the terminated agreement to sell the OSS
business to J.F. Lehman. During the third quarter and first nine months of 1997,
the Company paid out approximately $618 and $2,251, respectively, related to
personnel reductions and facility closings.

Of the $11,000 of restructuring costs included in the non-recurring charge of
$14,500 recorded in the fourth quarter of 1996, the Company paid out
approximately $1,875 and $6,449, respectively, during the third quarter and
first nine months of 1997.

                                       7
<PAGE>
 
(3)   Sale of Business Unit

On July 18, 1997, the Company completed the sale of its Open Service Solutions
business unit to CVSI. Inc. ("CVSI"). As a result of this transaction, the
Company received $32,600 in cash, of which $7,600 was paid by M.D. Sass
Investors Services, Inc. ("Buyer"), which owns 17% of the Company's outstanding
common stock, for 76% of CVSI's Class A voting stock. The remaining $25,000 was
paid to the Company by CVSI, and, in addition, the Company received a
subordinated note from CVSI in the principal amount of $10,000. The Company will
retain 24% of CVSI's Class A voting common stock and 100% of its Class B
non-voting stock (to which it has currently assigned no value). The Buyer has
been provided incentive options to purchase the remaining 24% Class A common
stock held by the Company should it retire within the first year the $10,000
subordinated note as well as purchase all of the Class B non-voting stock for
$15,000. In addition, the Company has agreed that if CVSI does not achieve
certain specified levels of product revenues and operating margins from
Computervision-initiated referrals, CVSI will have the option to purchase, at a
nominal price, some or all of the remaining Class A stock held by the Company.
In no instance can CVSI raise additional funds without first applying the
proceeds to retire the $10,000 subordinated note and purchase Class B stock for
$15,000. The Company used approximately $14,000 of the cash proceeds to pay
outstanding borrowings under the Revolving Credit Facility. The remaining cash
proceeds were used for transaction costs and other working capital needs. After
related costs, the transaction resulted in a gain of $2,200. The Company
recognized $1,255 of the gain in the third quarter of 1997 and expects to
recognize the remaining $945 in the fourth quarter of 1997 upon the transferring
of certain foreign assets.

Pro forma financial results assuming the transaction was completed as of January
1, 1996 are as follows:



                             Nine Months Ended      Twelve Months Ended
                             September 28, 1997      December 31, 1996
                             ------------------     -------------------
Revenue                          135,137                  302,815
Net Income (Loss)                (99,543)                  11,160
Earnings (Loss) per Share          (1.56)                    0.17


(4) Litigation

The Company is currently involved in lawsuits which could have an adverse impact
upon the Company's short-term liquidity and results of operations if unfavorable
judgments are rendered against the Company. On July 23, 1997, the Company
reached an agreement for settlement of the class action lawsuit commenced in
March 1991 against the Company and certain individual defendants by Joseph and
Josephine Dieter. As its contribution to the settlement fund, the Company has
agreed to issue 2,712 shares of its common stock valued at $4 per share. The
agreement provides for a reduction in the number of shares to be distributed in
the event the average price exceeds $6 during the predistribution period. The
settlement agreement also provides for an increase in the number of shares to be
distributed to the plaintiffs in the event that the average price of the
Company's common stock is less than $4 during the period prior to the
distribution of the shares to the plaintiffs. On September 23, 1997 the Delaware
Chancery Court approved the settlement and the appeal period has expired without
any appeal being filed. The initial distribution is scheduled to occur on
December 4, 1997. The cut-off date for determination of the average price will
be November 12, 1997 (15 business days before the distribution date). The
Company had previously provided for the settlement; therefore, the settlement
will have no impact on the Company's results of operations.

Other than as described above, there have been no significant changes to the
Company's outstanding litigation since the filing of the Company's Form 10-K for
the twelve months ended December 31, 1996.

(5) Related Party Transactions

On September 3, 1997, the Company entered into an $8,500 bridge loan facility
with an affiliate of M.D. Sass Investors Services, Inc. ("M.D. Sass"). M.D. Sass
owns 17% of the Company's outstanding common stock. Subsequent to quarter end,
the $8,500 bridge loan facility was repaid.

On July 18, 1997, the Company sold its OSS business unit to CVSI, Inc. for
$32,600, of which $7,600 was paid by M.D. Sass. M.D. Sass owns 17% of the
Company's outstanding common stock. (See Note 3 "Sale of Business Unit".)

                                       8
<PAGE>
 
The Company recognized $11,200 of software product revenue from Peugeot SA
during the quarter ended March 31, 1996. A member of senior management of
Peugeot SA is also a director of the Company.

(6) Earnings Per Share

Fully diluted earnings per share for the three months ended September 28, 1997
would have been the same as primary earnings per share and, therefore, have not
been presented separately.

During 1997, the Financial Accounting Standards Board (FASB) issued Statement of
Financial Accounting Standards No. 128 (SFAS 128), "Earnings per Share," which
specifies a new computation for earnings per share. SFAS 128 is effective for
periods ending after December 15, 1997. Had SFAS 128 been adopted as of January
1, 1996, there would have been no effect on the Company's reported earnings per
share for the quarters and nine month periods ended September 28, 1997 and
September 29, 1996.

(7) Reclassifications

Certain prior year balances in the financial statements have been reclassified
to conform to the current year financial statement presentation.

(8) Subsequent Event

On November 4, 1997, the Company announced a definitive merger agreement with
Parametric Technology Corporation ("PTC"), under which PTC will acquire the
Company in a stock for stock transaction. Under the terms of the transaction,
each share of the Company's common stock will be exchanged for 0.0866 shares of
PTC common stock. The transaction is intended to be accounted for as a pooling
of interests and to qualify as a tax free reorganization. The agreement is
subject to several conditions, including regulatory approvals and the approval
of the Company's shareholders.

In connection with the execution of the merger agreement, the Company granted
PTC an option to purchase up to 9,558,809 shares of newly issued Company common
stock at a price of $4 per share, which equals 15% of the outstanding common
stock of the Company.

                                       9
<PAGE>
 
Management's Discussion and Analysis of Financial Condition and Results of
Operations (In Thousands, Except Per Share Data)

This Management's Discussion and Analysis of Financial Condition and Results of
Operations should be read in conjunction with the financial statements and
footnotes contained in the Company's Form 10-Q for the three months ended
September 28, 1997 and the Form 10-K as filed on Form 8-K on November 12, 1997,
including the Factors That May Affect Future Results section of Management's
Discussion and Analysis of Financial Condition and Results of Operations, for
the year ended December 31, 1996, filed with the Securities and Exchange
Commission.

Software Revenue and Gross Margins

Total software revenue for the third quarter of 1997 decreased $39,623 or 48%,
as product revenue decreased $36,391 or 66% and service revenue decreased $3,232
or 12% from the corresponding period in 1996. For the nine month period ended
September 28, 1997, total software revenue decreased $87,001 or 39%, as product
revenue decreased $77,032 or 55% and service revenue decreased $9,969 or 12%.
Total software revenue for the third quarter and first nine months of 1997
included unfavorable foreign exchange impacts of $441 and $2,386, respectively,
attributable to product revenue, and $1,731 and $4,121, respectively,
attributable to service revenue.

The decrease in software product revenue for both the third quarter and first
nine months of 1997 was attributable in large part to the Company's failure to
consummate several large EPD contracts, deterioration in its base business, and
increasing customer concerns over its financial condition. In the comparable
nine months in 1996, the Company's software product revenue included $27,000
related to a third quarter contract with Electronic Data Systems for product to
the Rolls-Royce Aerospace Group and Allison Engine Company, and $11,200 related
to a first quarter contract with Peugeot SA, including Automobiles Peugeot and
Citroen. Revenue from the Company's product data management software products
decreased $9,300 and $18,300, or 77% and 60%, respectively, for the three and
nine month periods ended September 28, 1997. Revenue from CADDS software
products decreased $25,600 and $52,300 or 66% and 57%, respectively, for the
same periods. In addition, revenue from several older mechanical CAD software
products continued to decline year over year, as planned.

The decrease in software service revenue for the three and nine month periods
ended September 28, 1997 was due to an unfavorable foreign exchange impact and a
decrease in maintenance and training revenue, offset in part by increased
consulting revenue. The maintenance revenue decrease reflected primarily the
impact of lower pricing on new products and upgrades within the existing
customer base, as well as the impact of the shortfall in product revenue during
1997. The shortfall in product revenue during the first nine months of 1997 will
continue to have an adverse effect on maintenance revenue in future quarters.

Software product margins for the third quarter and first nine months of 1997
were 83.8% and 85.2%, respectively, compared to 92.6% and 91.5%, respectively,
for the corresponding periods in 1996. The decrease in software product margins
primarily resulted from unabsorbed fixed costs due to lower revenue, increased
sales of third party software, and increased royalties for software licensed
from third parties. Software service margins for the third quarter and first
nine months of 1997 were 38% and 35%, respectively, compared to 39% and 42%,
respectively, for the corresponding periods in 1996. The decline in software
service margin in 1997 primarily resulted from decreased maintenance margins,
due to decreased maintenance revenue, offset in part by increased training and
consulting margins.

Other Revenue and Gross Margins

On July 18, 1997, the Company completed the sale of the OSS business unit to
CVSI, Inc. (See Note 3 "Sale of Business Unit" of the Notes to the Consolidated
Financial Statements.)

Other services revenue (representing the OSS business unit) for the third
quarter and first nine months of 1997 decreased $32,553 and $51,083 or 79% and
38%, respectively, from the corresponding periods in 1996 and included
unfavorable period over period foreign exchange impacts of $706 and $3,506,
respectively. The decrease in other services revenue was primarily due to the
sale of the OSS business unit during the first month of the quarter.

                                       10
<PAGE>
 
Other services margins for the third quarter and first nine months of 1997 were
(5)% and 9%, respectively, compared to 16% and 23%, respectively, for the
corresponding periods in 1996. The decrease in margins was primarily due to the
sale of the OSS business unit during the first month of the quarter.

Selling and Administrative Expense

Total selling and administrative expense for the third quarter and first nine
months of 1997 decreased $12,530 and $13,144, or 35% and 13%, respectively, from
the corresponding periods in 1996. The decreases were primarily due to favorable
foreign exchange impacts of $1,221 and $3,265, respectively, a $4,298 reduction
in OSS third quarter selling and administrative expenses resulting from the sale
of the OSS business unit, and the cost benefits associated with the recent
restructurings, offset by decreased commissions received for third party
hardware referrals.

Research, Development and Engineering Expense

Total research, development and engineering expense for the third quarter and
first six months of 1997 was relatively flat with the corresponding periods in
1996, due to decreases resulting primarily from the cost benefits associated
with the recent restructurings, offset by increases resulting from a second
quarter business acquisition.

Non-recurring Charge

The results for the second quarter of 1997 include a non-recurring charge of
$45,000, related primarily to the restructuring of the software business in
order to reduce the costs in the business and improve operating results in
future periods. Of the $45,000 non-recurring charge, $38,000 represents the cash
portion and consists of primarily personnel reductions of approximately 300
positions and the closing of facilities. During the third quarter and first nine
months of 1997, the Company paid out approximately $3,746 and $4,327,
respectively, related to personnel reductions and facility closings.

The results for the first quarter of 1997 include a non-recurring charge of
$7,000 related primarily to the reorganization of the OSS business as a stand
alone business unit (approximately $4,360 related to personnel reductions of
approximately 60 positions in OSS and the closing of facilities), as well as
expenses incurred in connection with the terminated agreement to sell the OSS
business to J.F. Lehman. During the third quarter and first nine months of 1997,
the Company paid out approximately $618 and $2,251, respectively, related to
personnel reductions and facility closings.

Of the $11,000 of restructuring costs included in the non-recurring charge of
$14,500 recorded in the fourth quarter of 1996, the Company paid out
approximately $1,875 and $6,449, respectively, during the third quarter and
first nine months of 1997.

Interest and Other

Interest expense for the third quarter and first nine months of 1997 increased
slightly from the corresponding periods in 1996, primarily due to a non-cash
write-off. Other (income) expense for the third quarter and first nine months of
1997 and the corresponding periods of 1996 primarily relates to the Company's
foreign currency hedging program, offset by the gain recorded on the sale of the
OSS business unit during the third quarter of 1997.

Short-term Liquidity and Capital Resources

In 1995, the Company entered into a three-year, $50,000 credit facility (the
"Revolving Credit Facility") with its lending banks. The Revolving Credit
Facility provided for a revolving line of credit of $50,000 for working capital
and for sinking fund payments on the Company's 8% Convertible Subordinated
Debentures (unpaid principal balance of $54,110 at December 31, 1996), of which
$20,000 is available for letters of credit. Due to a financial covenant
violation which occurred in the first quarter of 1997, the Company amended and
restated the Revolving Credit Facility on May 22, 1997, to reset the financial
covenants to conform with the Company's revised business plan for 1997 and to
implement a borrowing base limitation. Under the amended facility, the Company
could borrow funds secured by the accounts receivable of the Company,
Computervision Pty. Limited (Australia), Computervision SA (France),
Computervision GmbH (Germany) and Computervision Limited (U.K.). Pursuant to the
terms of the Revolving Credit Facility, the Company granted the lenders a
security interest in all of the Company's U.S. assets.

                                       11
<PAGE>
 
As a result of the shortfall in revenue and the non-recurring charge of $45,000
in the quarter ended June 29, 1997, the Company was unable to satisfy certain of
the financial covenants, as amended, under the Revolving Credit Facility. The
default was not waived by the lending banks. During the third quarter, the
Company repaid all of the outstanding borrowings under the Revolving Credit
Facility, including cash collateralizing the letters of credit (see Note 3 "Sale
of Business Unit" of Notes to Consolidated Financial Statements) and the
agreement has since been terminated.

On September 3, 1997, the Company entered into a bridge loan facility with an
affiliate of M.D. Sass Investors Services, Inc., a major shareholder of the
Company, for a bridge term loan of up to $8,500. The Company utilized the $8,500
bridge term loan to fund its primary third quarter requirements, including the
August 15, 1997 $10,000 semi-annual interest payment on its outstanding Senior
Subordinated Notes. In October 1997, the Company closed $17,500 in bridge
financing with Foothill Capital Corporation ("Foothill"), a subsidiary of
Norwest Corporation. A portion of the credit facility was used to repay the
existing $8,500 bridge term loan. The $17,500 bridge financing is secured by the
Company's assets and matures on November 15, 1997 and accrues interest at a rate
of 12.5%. On November 11, 1997 the Company closed a $47,250 credit facility with
Foothill, which is secured by all of the Company's assets and will have a term
of 18 months. The Company used this facility to repay the $17,500 bridge
financing. Of the $47,250 facility, $41,000 is subject to a fixed borrowing base
which does not fluctuate, and the remainder is subject to available eligible
accounts receivable. In addition to this proposed credit facility, the Company
requires significant additional financing in order to meet its current
obligations as they come due. If the Company were unable to secure such
additional financing, it would be unable to meet its remaining principal short-
term liquidity requirements, including debt service, restructuring payments,
normal working capital and other cash requirements, which would have a material
adverse effect on the Company's on-going operations and would adversely affect
the solvency of the Company. No assurances can be given that the Company will be
successful in securing such additional financing. These issues raise substantial
doubt about the Company's ability to continue as a going concern. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.

On November 4, 1997, the Company announced a definitive merger agreement with
Parametric Technology Corporation ("PTC"), under which PTC will acquire the
Company in a stock for stock transaction. Under the terms of the transaction,
each share of the Company's common stock will be exchanged for 0.0866 shares of
PTC common stock. The transaction is intended to be accounted for as a pooling
of interests and to qualify as a tax free reorganization. The agreement is
subject to several conditions, including regulatory approvals and the approval
of the Company's shareholders. If the merger is not consummated, the Company
will have to either substantially curtail its business operations or seek
protection under the bankruptcy laws.

Despite a significant reduction in the Company's long term indebtedness in 1995,
the Company remains highly leveraged and has a stockholders' deficit. This
indebtedness requires the Company to dedicate a significant portion of its cash
flow from operations to service its indebtedness and makes the Company more
vulnerable to unfavorable changes in general economic conditions.

A substantial portion of the Company's orders and shipments typically occur in
the last two weeks of each quarter. Therefore, the timing of orders and
shipments, including unexpected delays in receiving large orders, such as
occurred in 1997, or competitors introducing new competitive products, could
result in significant quarterly fluctuations in the Company's operating results
and cash flow. Historically, the Company has experienced a seasonal decline in
revenue in the first and third quarters of each fiscal year, primarily due to
capital budgeting cycles and the European holiday schedule, respectively.

Long-term Liquidity

The Company's principal long-term liquidity requirements are payments for
interest, previously accrued restructuring obligations, capital expenditures and
the repayment of the Senior Subordinated Notes which mature in 1999. The Company
will require additional funds prior to the maturity of the Senior Subordinated
Notes in 1999 to satisfy these obligations and, as a result, will seek to obtain
such funds through a sale of equity and/or debt securities or other financing
arrangements. However, no assurances can be given that such funds will be
available when required or on terms favorable to the Company.

                                       12
<PAGE>
 
Operations and Investments

Cash and cash equivalents were $25,948 at September 28, 1997 compared with
$38,565 at December 31, 1996. The decrease of $12,617 in cash and cash
equivalents is primarily due to cash used for operations ($41,253) and cash used
for the purchase of property and equipment ($6,387), offset by net proceeds from
the sale of the OSS business unit ($30,100).

Legal

The Company is currently involved in lawsuits which could have an adverse impact
upon the Company's short-term liquidity and results of operations if unfavorable
judgments are rendered against the Company. On July 23, 1997, the Company
reached an agreement for settlement of the class action lawsuit commenced in
March 1991 against the Company and certain individual defendants by Joseph and
Josephine Dieter. As its contribution to the settlement fund, the Company has
agreed to issue 2,712 shares of its common stock valued at $4 per share. The
agreement provides for a reduction in the number of shares to be distributed in
the event the average price exceeds $6 during the predistribution period. The
settlement agreement also provides for an increase in the number of shares to be
distributed to the plaintiffs in the event that the average price of the
Company's common stock is less than $4 during the period prior to the
distribution of the shares to the plaintiffs. On September 23, 1997 the Delaware
Chancery Court approved the settlement and the appeal period has expired without
any appeal being filed. The initial distribution is scheduled to occur on
December 4, 1997. The cut-off date for determination of the average price will
be November 12, 1997 (15 business days before the distribution date). The
Company had previously provided for the settlement; therefore, the settlement
will have no impact on the Company's results of operations.

Other than as described above, there have been no significant changes to the
Company's outstanding litigation since the filing of the Company's Form 10-K for
the twelve months ended December 31, 1996.

                                       13
<PAGE>
 
PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

The Company is currently involved in lawsuits which could have an adverse impact
upon the Company's short-term liquidity and results of operations if unfavorable
judgments are rendered against the Company. On July 23, 1997, the Company
reached an agreement for settlement of the class action lawsuit commenced in
March 1991 against the Company and certain individual defendants by Joseph and
Josephine Dieter. As its contribution to the settlement fund, the Company has
agreed to issue 2,712 shares of its common stock valued at $4 per share. The
agreement provides for a reduction in the number of shares to be distributed in
the event the average price exceeds $6 during the predistribution period. The
settlement agreement also provides for an increase in the number of shares to be
distributed to the plaintiffs in the event that the average price of the
Company's common stock is less than $4 during the period prior to the
distribution of the shares to the plaintiffs. On September 23, 1997 the Delaware
Chancery Court approved the settlement and the appeal period has expired without
any appeal being filed. The initial distribution is scheduled to occur on
December 4, 1997. The cut-off date for determination of the average price will
be November 12, 1997 (15 business days before the distribution date). The
Company had previously provided for the settlement; therefore, the settlement
will have no impact on the Company's results of operations.

Other than as described above, there have been no significant changes to the
Company's outstanding litigation since the filing of the Company's Form 10-K for
the twelve months ended December 31, 1996.

Item 6.  Exhibits and reports on Form 8-K

(a) Exhibits.

Exhibit 10 - Material Contracts.

Exhibit 11 - Calculation of Shares Used in Determining Earnings Per Share.

(b) Reports on Form 8-K.

A report on Form 8-K was filed on July 22, 1997, to report the sale of the
Company's Open Service Solutions business unit to CVSI, Inc..

A report on Form 8-K was filed on July 24, 1997, to report (a) the Company's
financial results for the second quarter of 1997, (b) the settlement of a
shareholder lawsuit, and (c) the acquisition of Knowledge Integration Center
from UES, Inc..

A report on Form 8-K was filed on August 4, 1997, to report the Company's pro
forma financial results after the sale of the Open Service Solutions business
unit.

A report on Form 8-K was filed on September 9, 1997, to report the closing of a
$8.5 million bridge loan facility with M.D. Sass Corporate Resurgence Partners,
L.P..

A report on Form 8-K was filed on October 9, 1997, to report the appointment of
Eugene M. Bullis as Chief Financial Officer of the Company.

A report on Form 8-K was filed on October 21, 1997, to report (a) the closing of
a $14.5 million bridge credit facilty with Foothill Capital Corporation, a
subsidiary of Norwest Corporation, and (b) preliminary revenues for the third
quarter of 1997.

A report on Form 8-K was filed on October 29, 1997, to report the Company's
financial results for the third quarter of 1997.

A report on Form 8-K was filed on November 5, 1997, to report that the Company
entered into an Agreement and Plan of Reorganization with Parametric Technology
Corporation ("PTC"), pursuant to which a wholly-owned subsidiary of PTC will be
merged with and into the Company with the Company becoming a wholly-owned
subsidiary of PTC.

A report on Form 8-K was filed on November 12, 1997, to report that the
Company's independent auditors have reissued their original report on the
December 31, 1996 financial statements and their original review report on the
March 30, 1997 financial statements to include an explanatory paragraph that
describes the substantial doubt about the Company's ability to continue as a
going concern.

                                       14
<PAGE>
 
                                   SIGNATURES

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




                                             Computervision Corporation
                                             -------------------------------
                                             (Registrant)
                                   
                                   
Date:   November 12, 1997          
                                   
                                   
                                              /S/ Eugene M. Bullis
                                              ------------------------------
                                              Eugene M. Bullis
                                              Senior Vice-President Finance and
                                              Chief Financial Officer

                                       15
<PAGE>
 
                                  Exhibit Index

10   Material Contracts

     (a)  Operating Agreement between Computervision Corporation and CVSI, 
          Inc., dated July 18, 1997.

     (b)  Amendment of Management Retention Agreement between the Company and
          Barry F. Cohen, dated November 3, 1997.

     (c)  Amendment of Management Retention Agreement between the Company and
          Kathleen A. Cote, dated November 3, 1997 and Consulting Agreement 
          attached as Exhibit A.

     (d)  Amendment of Management Retention Agreement between the Company and
          James E. Hayden, dated November 3, 1997.

     (e)  Amendment of Management Retention Agreement between the Company and
          Rock Gnatovich, dated November 3, 1997.

     (f)  Amendment of Management Retention Agreement between the Company and
          Anthony N. Fiore, Jr., dated November 3, 1997.

     (g)  Amendment dated November 3, 1997 to the Employment Agreement between
          the Company and Eugene M. Bullis. 

     (h)  Amendment dated November 3, 1997 to the Employment Agreement between
          the Company and Russell E. Planitzer.
     
     (i)  Amendment dated November 3, 1997 to the Amended and Restated 
          Employment Agreement between the Company and Kathleen A. Cote.

     (j)  Amended and Restated Loan and Security Agreement between the 
          Company, certain of its subsidiaries and Foothill Capital Corporation,
          dated November 11, 1997.

     (k)  SAR Agreement between the Company and Foothill Capital Corporation, 
          dated November 11, 1997.

     (l)  Letter Agreement dated October 3, 1997 between the Company and Eugene 
          M. Bullis.

11(a) -   Computervision Corporation - Calculation of Shares Used in Determining
          Earnings Per Share

                                       16