<PAGE>   1

================================================================================

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    Form 10-Q

   (Mark one)

      [X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                  For the quarterly period ended June 30, 1998

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

                 For the transition period from _____ to _____.

                         Commission file number 0-20034


                            BROADWAY & SEYMOUR, INC.
             (Exact name of registrant as specified in its charter)

            Delaware                                             41-1522214
(State or other jurisdiction of                               (I.R.S. Employer
 incorporation or organization)                              Identification No.)

         128 South Tryon Street
       Charlotte, North Carolina                                     28202
(Address of principal executive offices)                          (Zip code)

                                 (704) 372-4281
              (Registrant's telephone number, including area code)



        SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
           SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

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



           Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X]  No [ ].

           As of July 31, 1998 there were 9,228,623 shares of Common Stock, $.01
par value, outstanding.

================================================================================

                                  Page 1 of 17


<PAGE>   2

                            Broadway & Seymour, Inc.
                                Table of Contents

<TABLE>
<CAPTION>
                                                                         Page
                                                                        Number
<S>                                                                     <C>
Part I Financial Information:                                           ------

Item 1.  Financial Statements

           Consolidated Balance Sheet -
                June 30, 1998 and December 31, 1997                       3

           Consolidated Statement of Operations -
                Three months and six months ended June 30, 1998
                and June 30, 1997                                         4

           Consolidated Statement of Cash Flows -
                Six months ended June 30, 1998 and
                June 30, 1997                                             5

           Notes to Consolidated Financial Statements                   6 - 7

Item 2.  Management's Discussion and Analysis of
                Financial Condition and Results of Operations           8 - 12


Part II Other Information:

Item 4.  Submission of Matters to a Vote of Security Holders           12 - 13

Item 6.  Exhibits and Reports on Form 8-K                              14 - 16

Signature                                                                17

</TABLE>


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


PRODUCTS MENTIONED IN THIS REPORT ARE USED FOR IDENTIFICATION PURPOSES ONLY AND
MAY BE TRADE NAMES OR TRADEMARKS OF BROADWAY & SEYMOUR, INC., ITS SUBSIDIARIES
OR THIRD PARTIES.

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



                                       2

<PAGE>   3

PART I - Financial Information
Item 1. Financial Statements.



                            Broadway & Seymour, Inc.
                           Consolidated Balance Sheet
                 (In thousands, except share and per share data)


<TABLE>
<CAPTION>
                                                                             June 30,      December 31,
                                                                               1998           1997
                                                                            -----------    ------------
                                                                            (Unaudited)
<S>                                                                         <C>            <C>     
Assets
Current assets:
    Cash and cash equivalents                                               $ 20,946       $ 17,965
    Receivables                                                               20,998         29,372
    Deferred income taxes                                                      4,329          2,945
    Other current assets                                                       1,825          2,128
                                                                            --------       --------
        Total current assets                                                  48,098         52,410
Property and equipment                                                         5,864          5,154
Software costs                                                                 3,528          3,630
Intangible assets                                                              5,423          6,064
Other assets                                                                      65             85
                                                                            --------       --------
                                                                            $ 62,978       $ 67,343
                                                                            ========       ========

Liabilities and Stockholders' Equity
Current liabilities:
    Notes payable                                                           $      8       $    138
    Accounts payable-trade                                                     3,627          6,325
    Accrued compensation                                                       1,730          2,295
    Estimated liabilities for contract losses                                    946          1,162
    Other accrued liabilities                                                  4,049          3,807
    Deferred revenue                                                          14,156         11,732
    Income taxes payable                                                       1,513          2,379
                                                                            --------       --------
        Total current liabilities                                             26,029         27,838
                                                                            --------       --------
Deferred income taxes                                                          1,280          1,435
                                                                            --------       --------
Other liabilities                                                                961            697
                                                                            --------       --------
Stockholders' equity:
    Common stock, $.01 par value; Authorized 20,000,000 shares; Issued
      9,228,623 and 9,228,623 shares, for 1998 and 1997, respectively             92             92
    Paid-in capital                                                           38,518         38,518
Treasury stock, at cost, 38,552 shares                                          (492)          (492)
Accumulated deficit                                                           (3,410)          (745)
                                                                            --------       --------
        Total stockholders' equity                                            34,708         37,373
                                                                            --------       --------

                                                                            $ 62,978       $ 67,343
                                                                            ========       ========
</TABLE>


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

                                       3
<PAGE>   4

                            Broadway & Seymour, Inc.
                      Consolidated Statement of Operations
                      (In thousands, except per share data)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                    Three months ended              Six months ended
                                                 June 30,       June 30,       June 30,        June 30,
                                                   1998           1997           1998            1997
                                                ------------   --------       --------       ----------
<S>                                             <C>            <C>            <C>            <C>     
Net revenue                                     $ 15,345       $ 19,103       $ 33,185       $ 38,764
                                                --------       --------       --------       --------

Operating expenses:
  Cost of revenue                                 11,880         12,156         25,179         25,295
  Research and development                         1,679          1,469          3,209          2,745
  Sales and marketing                              3,062          2,816          5,530          5,262
  General and administrative                       3,037          2,377          5,435          4,998
  Restructuring charge (credit)                                    (150)                         (579)
                                                --------       --------       --------       --------
        Total operating expenses                  19,658         18,668         39,353         37,721
                                                --------       --------       --------       --------
Operating income (loss)                           (4,313)           435         (6,168)         1,043
Gain on disposition of non-strategic units                          896          1,607            986
Interest income                                      247            140            519            339
Interest expense                                     (12)           (10)           (35)           (25)
                                                --------       --------       --------       --------
Income (loss) before income taxes                 (4,078)         1,461         (4,077)         2,343
Provision (benefit) for income taxes              (1,412)           676         (1,412)         1,078
                                                --------       --------       --------       --------
Net income (loss)                               ($ 2,666)      $    785       ($ 2,665)      $  1,265
                                                ========       ========       ========       ========

Net income (loss) per share:
   - Basic                                      ($  0.29)      $   0.09       ($  0.29)      $   0.14
                                                ========       ========       ========       ========
   - Diluted                                    ($  0.29)      $   0.09       ($  0.29)      $   0.14
                                                ========       ========       ========       ========
</TABLE>


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

                                       4
<PAGE>   5

                            Broadway & Seymour, Inc.
                      Consolidated Statement of Cash Flows
                                 (In thousands)
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                                        Six months ended
                                                                    June 30,        June 30,
                                                                      1998            1997
                                                                   ---------      ----------
<S>                                                                <C>            <C>     
Cash flows from operating activities:
    Net income (loss)                                              ($ 2,665)      $  1,265
    Adjustments to reconcile net income (loss) to net cash
      provided (used) by operating activities:
        Depreciation and amortization                                 2,665          2,945
        Deferred income taxes                                        (1,539)           530
        Restructuring charge (credit)                                                 (579)
        Gain on disposition of non-strategic units                   (1,607)          (986)
        Loss on disposal of assets                                       11             35
        Change in assets and liabilities excluding effects of
          disposition of non-strategic business units
                Receivables                                          10,326            972
                Other current assets                                    322            947
                Accounts payable - trade                             (2,698)        (2,243)
                Accrued compensation                                   (299)           120
                Estimated liabilities for contract losses              (122)          (937)
                Other accrued liabilities                              (153)          (600)
                Deferred revenue                                      2,425         (4,473)
                Income taxes payable                                   (866)          (993)
                                                                   --------       --------
        Net cash provided (used) by operating activities              5,800         (3,997)
                                                                   --------       --------
Cash flows used by investing activities:
    Purchase of property and equipment                               (2,105)        (1,198)
    Investment in software costs                                       (584)          (174)
                                                                   --------       --------
        Net cash used by investing activities                        (2,689)        (1,372)
                                                                   --------       --------
Cash flows provided (used) by financing activities:
    Payments of notes payable                                          (130)          (245)
    Proceeds from issuance of common stock                                           1,435
                                                                   --------       --------
        Net cash provided (used) by financing activities               (130)         1,190
                                                                   --------       --------
Net increase (decrease) in cash and cash equivalents                  2,981         (4,179)
Cash and cash equivalents, beginning of period                       17,965         15,010
                                                                   --------       --------
Cash and cash equivalents, end of period                           $ 20,946       $ 10,831
                                                                   ========       ========
</TABLE>


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


                                       5

<PAGE>   6

                            Broadway & Seymour, Inc.
                   Notes to Consolidated Financial Statements
                                   (Unaudited)


NOTE 1 - Basis of Presentation:

           The consolidated financial statements of Broadway & Seymour, Inc.
(the "Company") include all adjustments of a normal recurring nature which, in
the opinion of management, are necessary for a fair presentation of financial
position as of June 30, 1998 and results of operations and cash flows for the
interim periods presented. The results of operations for the three months and
six months ended June 30, 1998 are not necessarily indicative of the results to
be expected for the entire year.

           The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, certain information and footnotes required by
generally accepted accounting principles are not included herein. These interim
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto for the year ended December 31, 1997 as
reported by the Company in its Annual Report on Form 10-K.

           Certain prior year amounts have been reclassified to conform with
current year presentation.


NOTE 2 - Accounting Policies:

           Effective January 1, 1998, the Company adopted Statement of Position
97-2 "Software Revenue Recognition" ("SOP 97-2"), which provides guidance on
applying generally accepted accounting principles in recognizing revenue on
software transactions. The adoption of SOP 97-2 did not have a material effect
on the Company's financial position or results of operations.

           On June 16, 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133 "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS No. 133"), which is effective for all
fiscal quarters of fiscal years beginning after June 15, 1999. The Company will
adopt SFAS No. 133 on or before the effective date; however, it is not
anticipated that this standard will have a material impact on the results of
operations or financial position of the Company.


NOTE 3 - Receivables:

           Receivables at June 30, 1998 and December 31, 1997 consisted of the
following:

<TABLE>
<CAPTION>
                                             June 30,       Dec. 31,
                                               1998           1997
                                            --------       --------
                                                  (In thousands)
<S>                                         <C>            <C>     
Trade                                       $ 18,306       $ 24,302
Unbilled                                       2,529          4,631
Other                                          1,269          1,361
                                            --------       --------
                                              22,104         30,294
Less - Allowance for doubtful accounts        (1,106)          (922)
                                            --------       --------
                                            $ 20,998       $ 29,372
                                            ========       ========
</TABLE>
                                       6

<PAGE>   7

NOTE 4 - Software Costs:

           The Company capitalizes a portion of its software development costs,
including costs for product enhancements that improve the marketability of the
original product or extend its life. These capitalized costs are incurred after
the establishment of technological feasibility and prior to the availability of
the software for general release. The Company capitalized software development
costs of approximately $.3 million and $ .1 million, during the three months
ended June 30, 1998 and 1997, respectively, and capitalized $.6 million and $.2
million, for the six months ended June 30, 1998 and 1997, respectively.
Software development costs are generally amortized over the estimated economic
life of the software product, up to a maximum of six years. Accumulated
amortization was $8.3 million and $7.7 million at June 30, 1998 and December 31,
1997, respectively. Amortization expense was approximately $.3 million for both
the three month periods ended June 30, 1998 and 1997 and $.6 million and $.7
million, respectively, for the six-month periods then ended.


NOTE 5 - Risks and Uncertainties:

           From time to time, the Company is involved in litigation incidental
to its business, including litigation regarding royalty obligations, contract
performance and personnel matters. Based on the current status of these matters
and provisions made by the Company, it is the opinion of management that no
litigation to which the Company currently is a party is likely to have a
material adverse effect on the Company's results of operations or financial
condition if decided adversely to the Company.


NOTE 6 - Subsequent Events:

           Subsequent to the end of the quarter, the Company's Board of
Directors authorized the repurchase of up to 1.0 million of its common shares
from time to time in open market or privately negotiated transactions.

           Additionally, in July the Company's management communicated a plan to
reduce staffing levels at its Charlotte-based headquarters and operations. As a
result, the Company expects to incur a one-time pre-tax charge of $.6 million to
$.7 million during the third quarter.

                                       7
<PAGE>   8

Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations.

Overview

           Broadway & Seymour, Inc. ("the Company") is a software product and
services company, providing integrated solutions to the financial and legal and
professional services markets. The Company's customer relationship management
(CRM) business, located in Charlotte, North Carolina offers software products
and services, including TouchPoint(TM), CRISP(TM) and BANCStar(R), for banks and
other financial institutions. The Company also operates Elite Information
Systems, Inc. ("Elite"), a wholly owned subsidiary located in Los Angeles,
California. Elite offers integrated time tracking, invoicing, general ledger
accounting software and other office management software products to the legal
and professional services markets.

           This Quarterly Report on Form 10-Q may contain certain
"forward-looking statements" within the meaning of Section 21E of the Securities
Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933,
as amended, that represent the Company's expectations or beliefs concerning
future events or projected financial results. Such forward-looking statements
are about matters that are inherently subject to risks and uncertainties.
Factors that could influence the matters discussed in certain forward-looking
statements include the timing and amount of revenue that may be recognized by
the Company, continuation of current expense trends, absence of unforeseen
changes in the Company's markets, continued acceptance of the Company's services
and products and general changes in the economy, as well as matters discussed in
"Risks and Uncertainties" in the Company's Annual Report on Form 10-K for the
year ended December 31, 1997. There can be no assurance that such future events
or projected results will be achieved and actual results could differ
materially.


Quarter Ended June 30, 1998 Compared to
           Quarter Ended June 30, 1997


           The Company's results for the second quarter of 1998 reflect a
decrease in consolidated revenue of $3.8 million or 19.7% when compared to the
same period of 1997. The Company also reported consolidated operating losses of
$4.3 million in the second quarter of 1998, compared to operating income of $.4
million for the same period of 1997.

<TABLE>
<CAPTION>
                            Three Months Ended
                              (in thousands)
                          June 30,     June 30,
Revenue                     1998         1997
-----------------------   -------      -------
<S>                       <C>          <C>    
Elite                     $10,850      $ 8,762
Broadway & Seymour          4,495        9,581
Other revenue                              760
                          -------      -------
Consolidated revenue      $15,345      $19,103
                          =======      =======
</TABLE>

         Revenue from the Company's Elite legal and professional services
business increased $2.1 million (or 23.8%) in the second quarter of 1998
compared to the same period in 1997, due principally to an increase in new
engagements. Elite's product suite was upgraded in 1996 and 1997 to allow it to
work with new database platforms while providing an intuitive graphical user
interface for the workstation. These Windows(TM) based products are gaining
increased market acceptance. In addition the Year 2000 issue has focused an
increasing number of professional service firms on replacing their existing
system by the end of 1999. Customer support revenue has also increased,
reflecting Elite's expanding customer base.

           Revenue from Broadway & Seymour, the Company's CRM business,
decreased $5.1 million (or 53.1%) in the second quarter of 1998 compared to the
same period of 1997. This decrease reflects a $2.8 million decline in custom
development and integration services and a $2.3 million decline in proprietary
CRM software solutions revenue. The decrease in custom 



                                       8
<PAGE>   9

services is principally due to a $1.8 million decrease in revenue from a single
customer who terminated its services contract with the Company during the first
quarter of 1998. CRM software solutions revenue decreased due to fewer billable
hours with existing customers, reflecting completion of certain contracts with
those customers as well as lower revenue per hour realized on certain fixed
price contracts due to extended installation efforts. The Company's ability to
obtain sufficient new CRM business to offset these declines has been impacted by
consolidations in the financial services industry, customer and industry
concerns and spending on the Year 2000 issue and a lengthy sales cycle for a
relatively new product. If the Company is unable to generate significant new
engagements, or if there is any delay or cancellation of existing engagements in
a particular period, the Company's financial condition, results of operations
and, eventually, its liquidity could be materially adversely affected. To
address these declines in CRM revenue, the Company currently plans to add
several new sales professionals, implement a solutions selling program and
change its marketing plan to focus on new business origination in both
service-based and product-based CRM engagements.

           Other revenue in 1997 of $.8 million related to certain non-strategic
business units that were sold.

           Consolidated cost of revenue decreased to $11.9 million in the second
quarter of 1998 from $12.2 million in the same period of 1997. The majority of
costs of revenue are project expenses such as personnel costs, contract labor
and costs of third party products for resale to customers. Personnel costs are
principally based on expectations for certain levels of revenue and are
relatively fixed in the short-term. As such, the consolidated gross margin
decreased to 22.6% in the second quarter of 1998, compared to 36.4% for the same
period of 1997, principally reflecting the decline in revenue at the Company's
CRM operations. In addition, because the Company's CRM solution TouchPoint is
relatively early in its lifecycle, certain software installations did not
progress as efficiently as anticipated and in some cases the Company has
retained employees at customer sites longer than anticipated, thereby incurring
more costs.

           Consolidated research and development expenses increased $.2 million,
principally related to ongoing efforts to develop and enhance the Company's
Elite and CRM products. Significant research and development efforts at Elite
include work on the next version of the Elite system, Elite Enterprise, a 32-bit
application. CRM research and development efforts include work on the next
releases of TouchPoint and new functionality, including a JAVA-based bank teller
application. The Company has recently hired a senior product manager and is
committed to maintaining its research and development efforts so it can to
continue to provide marketable software solutions as the needs of its customer
base and target markets change, as well as to provide enhancements to existing
software solutions.

           Consolidated sales and marketing expenses increased $.2 million in
the second quarter of 1998 compared to the same period of 1997. The increase is
principally due to approximately $.5 million in higher commissions and
incentives at Elite related to increases in sales and new contracts. This
increase was offset by $.1 million less in relocation, contract labor and travel
expenses at Elite as well as $.2 million less at the Company's CRM operations
which had incurred more expenses in the prior year related to the start-up of a
new division. Currently, the Company anticipates that sales and marketing levels
will continue to increase, reflecting current efforts to recruit and hire
additional sales and relationship managers to focus on CRM markets as well as
several experienced leaders that will focus on selling services-based
engagements.

            Consolidated general and administrative expenses increased $.7 
million in the second quarter of 1998 compared to the same period of 1997. The
increase is due in part to higher levels of external legal fees and increased
litigation reserves because these matters have advanced to more costly stages in
the litigation process or have been settled at amounts in excess of original
estimates. Based on the current status of these matters and provisions made by
the Company, it is the opinion of management that no litigation to which the
Company currently is a party is likely to have a material adverse effect on the
Company's results of operations or financial condition if decided adversely
against the Company. In addition, the Company incurred increased legal and
consulting fees in connection with certain corporate transactions that were not
consummated. Currently, the Company anticipates that external legal fees will
continue to be incurred at the same rate or higher than the prior year.

           Additional general and administrative expense increases resulted from
higher rent and other occupancy costs related to the relocation of Elite's
operations to a new office building. Revenue growth at Elite also contributed to
additional support expenses. The Company also incurred bank fees in 1998 related
to its line of credit which was obtained in the third quarter of 1997 and also
experienced a higher level of 401k contribution matching expense in 1998 due to
higher levels of participation by the Company's employees.


                                       9
<PAGE>   10

Income Taxes:

           The Company's income tax benefit of $1.4 million (or 34.6% of losses
before taxes) for the quarter ended June 30, 1998 is a direct result of pre-tax
losses, offset in part by permanent differences of non-deductible goodwill
amortization, stock compensation expense and state income taxes. The income tax
provision of $.7 million (or 46.3% of income before taxes) for the quarter ended
June 30, 1997 exceeds the tax expense at statutory rates principally due to the
permanent differences of non-deductible goodwill amortization, stock
compensation expense and state income taxes.




Six Months Ended June 30, 1998 Compared to
           Six Months Ended June 30, 1997

           The Company's results for the six months ended June 30, 1998 reflect
a decrease in consolidated revenue of $5.6 million or 14.4% when compared to the
same period of 1997. The Company also reported consolidated operating losses of
$6.2 million for the six months ended June 30, 1998, compared to operating
income of $1.0 million for the same period of 1997.


<TABLE>
<CAPTION>
                             Six Months Ended
                              (in thousands)
                          June 30,     June 30,
Revenue                     1998         1997
---------------------     -------      -------
<S>                       <C>          <C>    
Elite                     $19,043      $17,374
Broadway & Seymour         13,992       19,671
Other revenue                 150        1,719
                          -------      -------
Consolidated revenue      $33,185      $38,764
                          =======      =======
</TABLE>


           Revenue from the Company's Elite legal and professional services
business increased $1.7 million (or 9.6%) in the six months ended June 30, 1998
compared to the same period in 1997, principally due to an increase in new
engagements. Elite's product suite was upgraded in 1996 and 1997 to allow it to
work with new database platforms while providing an intuitive graphical user
interface for the workstation. These Windows(TM) based products are gaining
increased market acceptance. In addition the Year 2000 issue has focused an
increasing number of professional service firms on replacing their existing
systems by the end of 1999. Customer support revenue has also increased,
reflecting Elite's expanding customer base.

           Revenue from Broadway & Seymour, the Company's CRM business,
decreased $5.7 million (or 28.9%) in the first six months of 1998 compared to
the same period of 1997. This decrease principally reflects a $5.6 million
decline in custom development and integration services revenue, of which $3.7
million was due to a single customer which terminated its services contract with
the Company during the first quarter of 1998. The remainder of the decrease in
custom service revenue is due to a decline in volume when compared to the prior
year. The Company's ability to obtain sufficient new CRM business to offset
these declines has been impacted by consolidations in the financial services
industry, customer and industry concerns and spending on the Year 2000 issue and
a lengthy sales cycle for a relatively new product. If the Company is unable to
generate significant new engagements, or if there is any delay or cancellation
of existing engagements in a particular period, the Company's financial
condition, results of operations and, eventually, its liquidity could be
materially adversely affected. To address these declines in CRM revenue, the
Company currently plans to add several new sales professionals, implement a
solutions selling program and change its marketing plan to focus on new business
origination in both service-based and product-based CRM engagements.


                                       10
<PAGE>   11

           Other revenue of $1.7 million in 1997 related to certain
non-strategic business units that were sold. The other revenue of $.2 million in
1998 related to ongoing royalties from one of these business units.

           Consolidated cost of revenue remained relatively consistent at just
above $25 million in the first six months of 1998 compared to the same period of
1997. The majority of costs of revenue are project expenses such as personnel
costs, contract labor and costs of third party products for resale to customers.
Personnel costs are principally based on expectations for certain levels of
revenue and are relatively fixed in the short-term. As such, consolidated gross
margins decreased to 24.1% for the six months ended June 30, 1998, compared to
34.7% for the same period of 1997, reflecting the decline in revenue at the
Company's CRM operations. In addition, because the Company's CRM solution
TouchPoint is relatively early in its lifecycle, certain software installations
did not progress as efficiently as anticipated and in some cases the Company has
retained employees at customer sites longer than anticipated, thereby incurring
more costs.

           Consolidated research and development expenses increased $.5 million
for the six months ended June 30, 1998 compared to the same period of 1997,
principally related to ongoing efforts to develop and enhance the Company's
Elite and CRM products. Significant research and development efforts at Elite
include work on the next version of the Elite system, Elite Enterprise, a 32-bit
application. CRM research and development efforts include work on the next
releases of TouchPoint and new functionality, including a JAVA-based bank teller
application. The Company is committed to maintaining its research and
development efforts so it can continue to provide marketable software solutions
as the needs of its customer base and target markets change, as well as to
provide enhancements to existing software solutions.

           Consolidated sales and marketing expenses increased $.3 million for
the six months ended June 30, 1998 compared to the same period of 1997. The
increase is principally due to approximately $.8 million in higher commissions
at Elite related to the increases in sales and new contracts. Offsetting this
increase was a $.5 million decrease in CRM related salaries and commissions due
to fewer sales personnel and lower sales volume. The prior year also included
expenses related to the start-up of a new division. Currently, the Company
anticipates that sales and marketing levels will continue to increase,
reflecting current efforts to recruit and hire additional sales and relationship
managers to focus on CRM markets as well as several experienced leaders that
will focus on selling services-based engagements.

            Consolidated general and administrative expenses increased $.4 
million for the six months ended June 30, 1998 compared to the same period of
1997. The increase is due in part to higher levels of external legal fees and
increased litigation reserves because these matters have advanced to more costly
stages in the litigation process or have been settled at amounts in excess of
original estimates. Based on the current status of these matters and provisions
made by the Company, it is the opinion of management that no litigation to which
the Company currently is a party is likely to have a material adverse effect on
the Company's results of operations or financial condition if decided adversely
against the Company. In addition, the Company incurred increased legal and
consulting fees in connection with certain corporate transactions that were not
consummated. Currently, the Company anticipates that external legal fees will
continue to be incurred at the same rate or higher than the prior year.

           Additional general and administrative expense increases resulted
from higher rent and other occupancy costs related to the relocation of Elite's
operations to a new office building. Revenue growth at Elite also contributed to
additional support expenses. In addition, in the six months ended June 30, 1998,
the Company incurred bank fees related to its line of credit which was obtained
in the third quarter of 1997 and also experienced a higher level of 401k
contribution matching expense in 1998 due to higher levels of participation by
the Company's employees. Offsetting these increases to a degree were lower
general and administrative payroll expenses at the Company's headquarters in
Charlotte, reflecting lower headcount during the first six months of 1998
compared to 1997.

Income Taxes:

           The Company's income tax benefit of $1.4 million (or 34.6% of losses
before taxes) for the six-month period ended June 30, 1998 is a direct result of
pre-tax losses, offset in part by permanent differences of non-deductible
goodwill amortization, stock compensation expense and state income taxes. The
income tax provision of $1.1 million (or 46% of income before taxes) for the six
months ended June 30, 1997 exceeds the tax expense at statutory rates
principally due to the permanent differences of non-deductible goodwill
amortization, stock compensation expense and state income taxes.

Year 2000 Issues:

           Reference is made to the Company's Annual Report on Form 10-K for the
period ended December 31, 1997 for a more complete discussion of this issue as
it relates to the Company.


                                       11
<PAGE>   12

           The Company has recognized what is commonly known as the Year 2000
issue and has reviewed, and when necessary modified, its current software
products so that they can process data relating to dates subsequent to December
31, 1999 ("Year 2000 compliance") without adversely affecting performance or
functionality. In addition, third party software and computer technology used
internally, if not Year 2000 compliant may materially impact the Company. The
Company is reviewing what actions will be required to make all software systems
used internally Year 2000 compliant as well as to mitigate its vulnerability to
Year 2000 compliance problems that its service suppliers may have.

           Although the Company believes that its current versions of
proprietary software products are Year 2000 compliant, no assurance can be given
that additional modifications for Year 2000 compliance will not be necessary.
The Company's software systems as installed are integrated with its customers'
data and software and hardware systems and other vendors' software and hardware
systems and have, in many cases, been uniquely customized to the customers'
specifications. The customers' systems and other vendors' systems with which the
Company's systems interoperate may not be Year 2000 compliant. Generally, the
operation of the Company's software in these environments or the failure of
these systems to be compliant could impact the Year 2000 compliance of the
Company's systems and the Company may incur costs in ascertaining the cause of
such a failure.

           While management believes it is successfully addressing the Year 2000
compliance issue in its proprietary software products, upon which its results of
operations are significantly dependent, any of the foregoing could result in a
material adverse effect on the Company's business, operating results and
financial condition. In addition, the Company believes that many of its
customers and prospects are expending significant amounts of time and dollars on
Year 2000 compliance issues and that the purchasing patterns of such customers
or potential customers may be significantly impacted.

           The total cost and time associated with the impact of Year 2000
compliance cannot presently be determined. Any costs of addressing Year 2000
compliance are being expensed as incurred.


Liquidity and Capital Resources:

           At June 30, 1998, the Company had cash and cash equivalents of
approximately $20.9 million and working capital of approximately $22.1 million.
The Company also has a two-year, $15 million revolving credit facility under
which the Company may borrow up to a maximum of 80% of eligible accounts
receivable. As of June 30, 1998, the Company had $9.7 million available for
borrowing under the revolving credit facility, against which it has made no
borrowings. The credit revolving facility is secured by substantially all of the
Company's tangible and intangible assets. Additionally, the loan agreement
governing the revolving credit facility contains customary covenants that
require compliance with certain financial ratios and targets and restrict the
incurrence of additional indebtedness, payment of dividends and acquisitions or
dispositions of assets, among other things. As of July 31, 1998, the Company was
in compliance with such covenants, as amended.

           If the Company is unable to generate significant new engagements, or
if there is any delay or cancellation of existing engagements, there could be a
material reduction in the Company's liquidity, including decreases in cash from
operations, use of cash on hand and borrowings available under the revolving
credit facility. However, management currently believes that cash and cash
equivalents, cash from operations, the issuance of stock pursuant to its
employee stock purchase and stock option plans, and availability under its
revolving credit facility will be sufficient to meet currently anticipated
operating needs and capital requirements.


                                       12
<PAGE>   13

PART II - Other Information

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

           The Annual Meeting of Stockholders of Broadway & Seymour, Inc. was
held on May 8, 1998. The matters voted on and the number votes cast for, against
or withheld, as well as the number of abstentions and broker non-votes as to
each such matter, were as follows:

           1.   With respect to the proposal to re-elect two directors of the
                Company, 7,075,784 shares were voted for and 374,655 shares
                against the motion or to withhold authority with respect to one
                or more nominees, with no broker non-votes.

                David A. Finley and William G. Seymour were re-elected at the
                annual meeting as Class II directors. Listed below are the names
                of the two nominees elected to serve as directors and the four
                other continuing directors:

<TABLE>
<CAPTION>
                  Class I              Class II              Class III
                  -------              --------              ---------
                  <S>                  <C>                   <C>
                  Roger Noall          David A. Finley       George L. McTavish
                  Alan C. Stanford     William G. Seymour    Robert J. Kelly
</TABLE>

                The following is a separate tabulation with respect to each
                nominee elected:

<TABLE>
<CAPTION>
                                                       Against or     Broker
                                         For           Withheld       Non-Votes
                                         ---           ----------     ---------
<S>                                      <C>           <C>            <C>
                  William G. Seymour     8,210,399       374,655          0
                  David A. Finley        7,075,784     1,509,270          0
</TABLE>


           2.   With respect to the proposal to ratify the appointment of
                independent public accountants, 8,563,137 shares were voted for
                and 14,960 shares were voted against, with 6,957 abstaining, and
                no broker non-votes.



                                       13
<PAGE>   14

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


(a)        Exhibits:

     Exhibit No.                     Description
     -----------                     -----------

         3.1      Restated Certificate of Incorporation of Broadway & Seymour,
                  Inc., dated June 16, 1992 (Incorporated by reference to
                  Exhibit 3.1 to the Registrants Annual Report on Form 10-K for
                  the Fiscal Year Ended January 31, 1993)

         3.2      Restated By-laws of the Company (Incorporated by reference to
                  Exhibit 3.2 to the Company's Registration Statement on Form
                  S-1, SEC File No. 33-46672)

         4.1      Specimen share certificate (Incorporated by reference to
                  Exhibit 4.1 to the Registrant's Registration Statement on Form
                  S-1, SEC File No. 33-46672)

         4.2      Articles 4 and 5 of Broadway & Seymour, Inc.'s Restated
                  Certificate of Incorporation (Incorporated by reference to
                  Exhibit 4.2 to the Registrant's Registration Statement on Form
                  S-1, SEC File No. 33-46672)

         4.3      Article II, Section 2.2 of the Company's Restated By-laws
                  (Incorporated by reference to Exhibit 4.3 to the Registrant's
                  Registration Statement on Form S-1, SEC File No. 33-46672)

         10.01+   Restated 1985 Incentive Stock Option Plan of Broadway &
                  Seymour, Inc. dated June 12, 1985 (Incorporated by reference
                  to Exhibit 10.1 to the Registrant's Registration Statement on
                  Form S-1, SEC File No. 33-46672)

         10.02+   Amendment No. 1 to Restated 1985 Incentive Stock Option Plan
                  of Broadway & Seymour, Inc. dated February 25, 1993
                  (Incorporated by reference to Exhibit 10.2 to the Registrant's
                  Annual Report on Form 10-K for the Fiscal Year Ended January
                  31, 1993)

         10.03+   Amendment No. 2 to Restated 1985 Incentive Stock Option Plan
                  of Broadway & Seymour, Inc. dated February 17, 1994
                  (Incorporated by reference to Exhibit 10.16 to the
                  Registrant's Transition Report on Form 10-K for the Eleven
                  Months Ended December 31, 1993)

         10.04+   Amendment No. 3 to Restated 1985 Incentive Stock Option Plan
                  of Broadway & Seymour, Inc. dated May 15, 1995 (Incorporated
                  by reference to Exhibit 10.4 to the Registrant's Quarterly
                  Report on Form 10-Q for the Quarter Ended September 30, 1995)

         10.05+   Broadway & Seymour, Inc. 1996 Stock Option Plan dated
                  September 16, 1996 (Incorporated by reference to Appendix B to
                  the Registrant's Definitive Proxy Statement on Form DEFS14A
                  dated August 14, 1996)

         10.06    Asset Purchase Agreement between Unisys Corporation and
                  Broadway & Seymour, Inc. dated as of July 24, 1997.
                  (Incorporated by reference to Exhibit 10.35 to the
                  Registrant's Quarterly Report on Form 10-Q for the Quarter
                  Ended September 30, 1997)

         10.07    Amendment to Asset Purchase Agreement between Unisys
                  Corporation and Broadway & Seymour, Inc. dated September 17,
                  1997. (Incorporated by reference to Exhibit 10.36 to the
                  Registrant's Quarterly Report on Form 10-Q for the Quarter
                  Ended September 30, 1997)

         10.08    Loan Agreement by and among Broadway & Seymour, Inc., Elite
                  Information Systems, Inc., The Minicomputer Company of
                  Maryland, Inc., Elite Information Systems International, Inc.,
                  Pragmatix Telephony Solutions, Inc., and Fleet National Bank
                  (as agent and lender) for $15,000,000 secured revolving credit
                  loan dated as of July 23, 1997. (Incorporated by reference to
                  Exhibit 10.21 to the Registrant's Quarterly Report on Form
                  10-Q for the Quarter Ended June 30, 1997)


                                       14
<PAGE>   15

     Exhibit No.                     Description
     -----------                     -----------

         10.09    Security Agreement by and between Broadway & Seymour, Inc. and
                  Fleet National Bank dated as of July 23, 1997 (Incorporated by
                  reference to Exhibit 10.22 to the Registrant's Quarterly
                  Report on Form 10-Q for the Quarter Ended June 30, 1997)

         10.10    Security Agreement by and between Elite Information Systems,
                  Inc. and Fleet National Bank dated as of July 23, 1997
                  (Incorporated by reference to Exhibit 10.23 to the
                  Registrant's Quarterly Report on Form 10-Q for the Quarter
                  Ended June 30, 1997)

         10.11    Security Agreement by and between Elite Information Systems
                  International, Inc. and Fleet National Bank dated as of July
                  23, 1997 (Incorporated by reference to Exhibit 10.24 to the
                  Registrant's Quarterly Report on Form 10-Q for the Quarter
                  Ended June 30, 1997)

         10.12    Security Agreement by and between The Minicomputer of
                  Maryland, Inc. and Fleet National Bank dated as of July 23,
                  1997 (Incorporated by reference to Exhibit 10.26 to the
                  Registrant's Quarterly Report on Form 10-Q for the Quarter
                  Ended June 30, 1997)

         10.13    Security Agreement by and between Pragmatix Telephony
                  Solutions, Inc. and Fleet National Bank dated as of July 23,
                  1997 (Incorporated by reference to Exhibit 10.26 to the
                  Registrant's Quarterly Report of Form 10-Q for the Quarter
                  Ended June 30, 1997)

         10.14    Conditional Trademark Assignment by and between Broadway &
                  Seymour, Inc. and Fleet National Bank dated as of July 23,
                  1997 (Incorporated by reference to Exhibit 10.27 to the
                  Registrant's Quarterly Report on Form 10-Q for the Quarter
                  Ended June 30, 1997)

         10.15    Conditional Trademark Assignment by and between Elite
                  Information Systems, Inc. and Fleet National Bank dated as of
                  July 23, 1997 (Incorporated by reference to Exhibit 10.28 to
                  the Registrant's Quarterly Report on Form 10-Q for the Quarter
                  Ended June 30, 1997)

         10.16    Conditional Trademark Assignment by and between Elite
                  Information Systems International, Inc. and Fleet National
                  Bank dated as of July 23, 1997 (Incorporated by reference to
                  Exhibit 10.29 to the Registrant's Quarterly Report on Form
                  10-Q for the Quarter Ended June 30, 1997)

         10.17    Conditional Trademark Assignment by and between The
                  Minicomputer of Maryland, Inc. and Fleet National Bank dated
                  as of July 23, 1997 (Incorporated by reference to Exhibit
                  10.30 to the Registrant's Quarterly Report on Form 10-Q for
                  the Quarter Ended June 30, 1997)

         10.18    Conditional Trademark Assignment by and between Pragmatix
                  Telephony Solutions, Inc. and Fleet National Bank dated as of
                  July 23, 1997 (Incorporated by reference to Exhibit 10.31 to
                  the Registrant's Quarterly Report on Form 10-Q for the Quarter
                  Ended June 30, 1997)

         10.19    Stock Pledge Agreement by and between Broadway & Seymour, Inc.
                  and Fleet National Bank dated as of July 23, 1997
                  (Incorporated by reference to Exhibit 10.32 to the
                  Registrant's Quarterly Report on Form 10-Q for the Quarter
                  Ended June 30, 1997)

         10.20    Stock Pledge Agreement by and between Elite Information
                  Systems, Inc. and Fleet National Bank dated as of July 23,
                  1997 (Incorporated by reference to Exhibit 10.33 to the
                  Registrant's Quarterly Report on Form 10-Q for the Quarter
                  Ended June 30, 1997)

         10.22    First Amendment to Loan Agreement by and among Broadway &
                  Seymour, Inc., Elite Information Systems, Inc., The
                  Minicomputer Company of Maryland, Inc., Elite Information
                  Systems International, Inc., and Fleet National Bank (as agent
                  and lender) dated September 30, 1997 (Incorporated by
                  reference to Exhibit 10.31 to the Registrant's Annual Report
                  on form 10-K for the year ended December 31, 1997)


                                       15
<PAGE>   16
     Exhibit No.                     Description
     -----------                     -----------

         10.23    Second Amendment to Loan Agreement by and among Broadway &
                  Seymour, Inc., Elite Information Systems, Inc., The
                  Minicomputer Company of Maryland, Inc., Elite Information
                  Systems International, Inc., and Fleet National Bank (as agent
                  and lender) dated February 6, 1998 (Incorporated by reference
                  to Exhibit 10.32 to the Registrant's Annual Report on form
                  10-K for the year ended December 31, 1997)

         10.24    Third Amendment to Loan Agreement by and among Broadway &
                  Seymour, Inc., Elite Information Systems, Inc., The
                  Minicomputer Company of Maryland, Inc., Elite Information
                  Systems International, Inc., and Fleet National Bank (as agent
                  and lender) dated May 6, 1998

         10.25*   Fourth Amendment to Loan Agreement by and among Broadway &
                  Seymour, Inc., Elite Information Systems, Inc., The
                  Minicomputer Company of Maryland, Inc., Elite Information
                  Systems International, Inc., and Fleet National Bank (as agent
                  and lender) dated August 7, 1998

         10.26+   Employment Agreement, dated as of May 29, 1997 (executed June
                  1, 1997), by and between Broadway & Seymour, Inc. and Keith B.
                  Hall (Incorporated by reference to the Registrant's Quarterly
                  Report on Form 10-Q for the quarter ended June 30, 1997)

         10.27+   Amendment No. 1 to Employment Agreement for Keith B. Hall
                  dated February 19, 1998

         10.28+   Employment Agreement dated as of September 1, 1995 by and
                  between Broadway & Seymour, Inc. and Alan C. Stanford
                  (Incorporated by reference to Exhibit 10.28 to the
                  Registrant's Quarterly Report on Form 10-Q for the Quarter
                  Ended September 30, 1995)

         10.29+   Amendment No. 1 to Employment Agreement for Alan C. Stanford
                  dated February 19, 1998

         11*      Computation of earnings per share

         27*      Financial Data Schedule, which is submitted electronically to
                  the Securities and Exchange Commission for information only
                  and not filed.


           *Filed herewith.
           +Management contract or compensatory plan or arrangement required to
            be filed as an exhibit.



(b) Reports on Form 8-K:

           None


                                       16
<PAGE>   17

                                    SIGNATURE

           Pursuant to the requirements of Section 13 or 15(d) of the Securities
and Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

                                           BROADWAY & SEYMOUR, INC.


Date:  August 11, 1998                     By: /s/ Keith B. Hall
                                               ---------------------------------
                                               Keith B. Hall, Vice President and
                                               Chief Financial Officer



                                       17