SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C. 20549

                                Form 10-Q

[X]             QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
                  OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 31, 2001

                                    OR

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

For the transition period from __________ to __________

Commission File No. 0-21359

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

        DELAWARE                                       51-0374596
(State of Incorporation)               (I.R.S. Employer Identification No.)

                      901 Market Street - Suite 475
                       Wilmington, Delaware 19801
                (Address of principal executive offices)
                               (Zip Code)

Registrant's telephone number, including area code: (302) 777-1608

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

                    YES   [X]               NO  [ ]

Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the close of the period covered by this
report.

Class:                                   Outstanding July 31, 2001:

Common Stock ($.01 par value)                    32,359,895 shares





                      PART I. - FINANCIAL INFORMATION

                  INDUSTRI-MATEMATIK INTERNATIONAL CORP.
                             AND SUBSIDIARIES

                   CONDENSED CONSOLIDATED BALANCE SHEET

                 (in thousands, except share and per share data)


                                              07/31/01       04/30/01
                                            -----------     -----------
                                            (Unaudited)

ASSETS
Current assets:
    Cash and cash equivalents               $  21,288       $ 12,053
    Short-term investments                         --         12,866
    Accounts receivable, less allowance
      for doubtful accounts of $1,137
      and $1,143 at July 31, 2001, and
      April 30, 2001, respectively              8,928         10,952
    Contract receivables                        1,781          1,861
    Prepaid expenses                            1,721          1,726
    Income taxes receivable                       135            217
    Other current assets                          438            640
                                               ------         ------
          Total current assets                 34,291         40,315
                                               ------         ------
Non-current assets:
     Property and equipment, net                4,033          4,753
     Goodwill and other intangible assets       3,528          3,739
     Long-term cash deposit                     2,731          2,794
     Other non-current assets                     886            909
                                               ------         ------
          Total non-current assets             11,178         12,195
                                               ------         ------
     Total assets                            $ 45,469       $ 52,510
                                              =======        =======



LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
     Accounts payable                            828          1,129
     Accrued expenses and other
       current liabilities                     6,936          8,071
     Accrued payroll and employee benefits     5,331          7,595
     Deferred revenue                          5,447          7,045
                                              ------         ------
          Total current liabilities           18,542         23,840
                                              ------         ------
Long-term liabilities:
     Accrued pension liability                 2,764          2,880
                                              ------         ------
     Total long-term liabilities               2,764          2,880
                                              ------         ------
           Total liabilities                  21,306         26,720
                                              ------         ------
Stockholders' equity:
    Common Stock; voting, $.01 par value;
     62,500,000 shares authorized;
     32,359,895 and 32,274,553 shares
     issued and outstanding at
     July 31, 2001 and April 30,
     2001, respectively                          324            323
    Additional paid-in capital               125,342        125,206
    Accumulated deficit                      (89,467)       (88,022)
    Accumulated other comprehensive loss      (6,154)        (5,835)
    Notes receivable from stockholders        (5,882)        (5,882)
                                             -------        -------
       Total stockholders' equity             24,163         25,790
                                             -------        -------
Total liabilities and stockholders' equity  $ 45,469       $ 52,510
                                             =======        =======


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

                        INDUSTRI-MATEMATIK INTERNATIONAL CORP.
                                 AND SUBSIDIARIES

              CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                                (UNAUDITED)
                 (in thousands, except per share data)

                                                THREE MONTHS ENDED
                                             7/31/01           7/31/00
                                       ---------------   ----------------

Revenues:
    Licenses                                $    643          $  4,132
    Services and maintenance                  12,187            12,430
    Other                                        658               431
                                             -------           -------
      Total revenues                          13,488            16,993
                                             -------           -------
Cost of revenues:
    Licenses                                      16               318
    Services and maintenance                   8,285             9,110
    Other                                        164               168
                                             -------           -------
      Total cost of revenues                   8,465             9,596
                                             -------           -------
      Gross profit                             5,023             7,397
                                             -------           -------
Operating expenses:
    Product development                        2,493             4,137
    Sales and marketing                        2,163             4,422
    General and administrative                 1,855             2,451
    Amortization of goodwill and
        other intangible assets                  185               376
                                             -------           -------
      Total operating expenses                 6,696            11,386
                                             -------           -------
Loss from operations                          (1,673)           (3,989)
                                             -------           -------
Other income (expense):
    Interest income                              245               466
    Interest expense                              --                (6)
    Miscellaneous income (expense), net          (17)               49
                                             -------           -------
Loss before income taxes                      (1,445)           (3,480)
Benefit for income taxes                          --                --
                                             -------           -------

Net loss                                      (1,445)           (3,480)
                                             =======           =======

Net loss per share                           $ (0.05)          $ (0.11)
                                             -------           -------
Net loss per share
  - assuming dilution                        $ (0.05)          $ (0.11)
                                             =======           =======


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









                  INDUSTRI-MATEMATIK INTERNATIONAL CORP.
                             AND SUBSIDIARIES

              CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (UNAUDITED)
                              (in thousands)

                                                 THREE MONTHS ENDED
                                               7/31/01         7/31/00
                                            -----------     -----------

Cash flows from operating activities:
Net loss                                      $ (1,445)       $ (3,480)

Adjustments to reconcile net loss
to net cash used in operating activities:
    Depreciation and amortization                  783           1,184
    Provision for doubtful accounts                 (6)            (54)
    Loss on disposal of property and equipment      (1)            (83)
    Write-down on property and equipment           131              --
    Changes in operating assets and liabilities:
        Accounts receivable                      1,803           8,214
        Contract receivables and
          prepaid expenses                        (328)            (43)
        Income taxes receivable                    (95)            197
        Other assets                                12             299
        Accounts payable                          (274)           (551)
        Accrued expenses and other
          current liabilities                   (1,201)           (287)
        Accrued payroll, employee benefits
          and deferred revenue                  (3,567)         (4,971)
        Accrued pension liability                  (21)            132
                                             ---------       ---------
Net cash provided by (used in)
    operating activities                        (4,209)            557
                                             =========       =========

Cash flows from investing activities:
      Purchase of short-term investments            --         (32,692)
      Proceeds from sale of short-term
        investments                             12,866          33,774
      Additions to property and equipment         (104)           (518)
      Proceeds from sale of property
        and equipment                                1               1
      Collection of notes receivable                --              40
                                             ---------       ---------
Net cash flows provided by (used in)
  investing activities                          12,763             605
                                             =========       =========
Cash flows from financing activities:
      Payments on notes payable                     --            (141)
      Issuance of Common Stock                     136             315
      Other                                         23            (100)
                                             ---------       ---------
Net cash flows provided
  by financing activities                          159              74
                                             =========       =========

Translation differences on cash and
 cash equivalents                                 (129)           (121)
                                             ---------       ---------
Net increase (decrease)in cash and cash
 equivalents                                  $  8,584        $ 1,115
                                             =========       =========

Cash and cash equivalents at beginning
 of period                                     $12,704        $ 12,036
Cash and cash equivalents at end             ---------       ---------
 of period                                     $21,288        $ 13,151
                                             ---------       ---------

Supplemental disclosures of cash flow information:
Cash paid during the period for:
      Interest                                  $   --           $   6
      Income taxes                              $  162           $ 224

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






                  INDUSTRI-MATEMATIK INTERNATIONAL CORP.
                             AND SUBSIDIARIES

           NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                (UNAUDITED)




1.  Interim Financial Statements

    The unaudited condensed consolidated financial statements included herein
have been prepared by Industri-Matematik International Corp. and its
subsidiaries (collectively, "Company") pursuant to the rules and regulations
of the Securities and Exchange Commission.  Accordingly, they do not contain
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.  In the opinion of
management, the accompanying unaudited condensed consolidated financial
statements reflect all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation of the Company's
financial condition at July 31, 2001, and the results of operations and cash
flows for the three months ended July 31, 2001, and 2000.  The financial
statements, which include a condensed consolidated balance sheet as at April
30, 2001 (audited), should be read in conjunction with the audited
consolidated financial statements of the Company included in the Company's
Annual Report on Form 10-K for the fiscal year ended April 30, 2001.  Results
of operations and cash flows for the period ended July 31, 2001, are not
necessarily representative of the results that may be expected for the fiscal
year ending April 30, 2002, or any other future period.

2.  Comprehensive Loss

    Total comprehensive loss was $(1,764,000) and $(3,925,000) for the three
months ended July 31, 2001, and 2000, respectively. Total comprehensive loss
includes net loss and currency translation adjustments.

3.  Net Loss per Share

    Net loss per share has been computed in accordance with Statement of
Financial Accounting Standards No. 128, "Earnings per Share".  For each of
the periods presented, net loss per share was based on the weighted average
number of shares of Common Stock outstanding during the period.  Net loss per
share - assuming dilution was based on the weighted average number of shares
of Common Stock and potential shares of Common Stock outstanding during the
period. Potential shares of Common Stock relates to stock options outstanding
for which the dilutive effect is calculated using the treasury stock method.
The computations of net loss per share - assuming dilution for the three
month periods ended July 31, 2001 and 2000, do not assume the exercise of
stock options since the effect would be antidilutive as a result of the
losses for the periods.

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


                          Three months ended
                               July 31,
                        -----------------------
                           2001         2000
                        ---------     ---------

Weighted average
shares outstanding     32,048,918    31,930,782
Effect of dilutive
stock options                  --            --
                        ---------     ---------
Adjusted weighted
average shares
outstanding assuming
dilution               32,048,918    31,930,782
                       ==========    ==========




4.  Accrued Expenses and Other Current Liabilities



                               July 31, 2001         April 30, 2001
                               --------------         -------------
                                (unaudited)
                                          (in thousands)

Accrued purchases                   $1,463               $2,274
Project reserves                       289                  148
Accrued consultancy                    773                  645
Accrued restructuring costs            685                1,355
Accrued pension taxes                  680                  588
Value-added tax                         43                  374
Employee withholding taxes             603                  580
Valuation of put option              1,397                1,384
Other                                1,003                  723
                                    ------               ------
                                   $ 6,936              $ 8,071
                                    ======               ======



During November, 2000, the Company entered into a hedge
transaction with a Bank to offset potential Swedish social
security fee liability upon exercise of stock options by employees
living in Sweden.  The arrangement involved the issuance by the
Bank of a call to the Company settleable in cash, which the Bank
elected to cover by purchasing shares of the Company's Common
Stock.  The Company offset a portion of the cost of the call by
issuing to the Bank a right to put shares of Company Common Stock
to the Company.  Gain or loss to the Company on the closing of the
transaction will be realized based upon the increase or decrease
in the price of the Company's Common Stock.  As a result of the
decline in the value of the Company Common Stock, as of April 30,
2001, the Company recorded a non-operating charge of $1.384
million relating to the put issued to the Bank which was adjusted
to $1.397 million at July 31, 2001.  This charge is reviewed
quarterly and adjusted to reflect the underlying Common Stock
value and will be reversed in full if the price of the Common
Stock reaches $4.536 per share, which is the exercise price of the
put. On July 31, 2001, the exercise price of the call option
($4.536) used to hedge potential Swedish social security fees was
above the market price of the Company's Common Stock. Since there
was no active market for these types of options, the value of the
call option was limited to a calculated option premium, which was
offset in the financial statements by the corresponding premium on
the put option. The original net premium of $50,000 will be
amortized over the 5-year term of the options.  The number of
shares of Company Common Stock subject to the call at any given
time, which depends on the number of options outstanding from time
to time, is presently 450,000 and is not expected to exceed that
number.  It is anticipated that the hedge transaction will be open
for several years.  As part of that transaction, the Company
deposited $2.1 million with the Bank and recorded a non-current
asset in that amount.


5.  Accrued Payroll and Employee Benefits


                                 July 31, 2001     April 30, 2001
                                --------------      -------------
                                  (unaudited)
                                           (in thousands)

Accrued commissions                 $  134             $  398
Accrued payroll taxes                  800                977
Accrued vacation pay                 1,110              1,571
Accrued salaries and bonus           1,437              1,398
accrued restructuring costs          1,043              2,256
Accrued pension expenses               665                703
Debt for ESPP                           14                145
Other                                  128                147
                                    ------             ------
                                    $5,331             $7,595
                                    ======             ======


6. Income Taxes

In April, 2001, the Company reduced the value of its deferred tax
asset to $0 by recording an additional valuation allowance against
its remaining deferred tax asset based upon its continuing non-
profitable operations and inability to predict when this asset could
be realized.  The Company intends to continue to record additional
valuation allowances until its operations return to profitability.

7. Segment Information

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

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


                                                Three Months Ended
                                                     July 31,
                                                -------------------
                                                  2001         2000
                                                ------       ------
                                                  (in thousands)
Revenues:
     United States ........................   $  5,575     $  8,247
     Nordic ...............................      5,094        5,939
     United Kingdom .......................      1,229        1,542
     Netherlands ..........................      1,383        1,314
     Australia ............................        171          423
     Intercompany..........................       (494)        (560)
     Corporate ............................        530           88
                                              --------     --------
                                              $ 13,488     $ 16,993
                                              ========     ========

Income (loss) from operations:
     United States ........................   $  1,057      $ 1,010
     Nordic ...............................        117         (500)
     United Kingdom .......................        155         (213)
     Netherlands ..........................         27           (9)
     Australia ............................          1          (30)
     Canada ...............................         (1)          (1)
     Intercompany .........................       (155)        (271)
     Corporate ............................     (2,874)      (3,975)
                                              --------     --------
                                              $ (1,673)    $ (3,989)
                                              ========     ========

8. Restructuring

In April, 2001, the Company announced a reorganization of its
operations into four regional units each made up of sales, services,
support, and operations staff.  In connection with the
reorganization, the Company took a restructuring charge of $5.4
million consisting primarily of employee severance costs, lease
termination expenses, and write-downs of certain property and
equipment, of which $1.5 million was expended by April 30, 2001. The
components of the charge included, in thousands:


Severance benefits                                         $2,797
Lease obligations and terminations                          1,057
Write-down on fixed assets                                  1,490
Other                                                          47
                                                           ------
Total restructuring charge                                 $5,391
                                                           ======


The following table presents the components of the accrual at April
30, 2001 (in thousands), and the restructuring activity relating to
the fiscal 2001 restructuring through July 31, 2001:

                            Accrual                             Accrual
                             as of    Utilization                as of
                            April 30,      of       Currency    July 31,
                              2001       accrual     effect       2001
                            -------   ----------   ---------   --------
Severance benefits          $ 2,621    $ (1,335)   $     (24)  $  1,262
Lease obligations
  and terminations              990        (462)         (58)       470
Other                            47                                  47
                            -------   ----------   ---------   --------
Total                       $ 3,658    $ (1,797)   $     (82)  $  1,779
                            =======   ==========   =========   ========



ITEM 2.
                 INDUSTRI-MATEMATIK INTERNATIONAL CORP.
                            AND SUBSIDIARIES

                MANAGEMENT'S DISCUSSION AND ANALYSIS OF
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS

    This report contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, that involve
certain risks and uncertainties.  Discussions containing such forward-
looking statements may be found in the material set forth below as
well as in this Report generally.  Without limiting the foregoing, the
words "believes," "anticipates," "plans," "expects," and similar
expressions are intended to identify forward-looking statements.  The
Company's actual results could differ materially from those
anticipated in such forward-looking statements as a result of certain
factors including, but not limited to, uncertainties regarding
continued market acceptance of the Company's products, delays in the
introduction of new product enhancements, the success of the Company's
restructuring program, hiring, training, and retaining employees, and
risks associated with managing the Company's operations, as well as
those set forth under "Risk Factors" in the Company's Annual Report on
Form 10-K for the fiscal year ended April 30, 2001, which are
incorporated herein by reference.  These forward-looking statements
are made as of the date of this Report and the Company assumes no
obligation to update such forward-looking statements or to update the
reasons why actual results could differ materially from those
anticipated in such forward-looking statements.

OVERVIEW

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

RESULTS OF OPERATIONS

    The following table sets forth, for the periods indicated, the
percentages that selected items in the unaudited Condensed Consolidated
Statements of Operations bear to total revenues.  The period to period
comparisons of financial results are not necessarily indicative of future
results.

                              Three Months Ended
                                  July 31,
                               2001        2000
                             -------      -------
Revenues:
  Licenses                      4.8 %       24.3 %
  Services and maintenance     90.3         73.2
  Other                         4.9          2.5
                             -------      -------
     Total revenues           100.0        100.0

Cost of revenues:
  Licenses                       0.1        1.9
  Services and maintenance      61.4       53.6
  Other                          1.2        1.0
                              -------     ------
     Total cost of revenue      62.7       56.5
                              -------     ------
     Gross profit               37.3       43.5
                              -------     ------

Operating expenses:
  Product development           18.5       24.4

  Sales and marketing           16.0       26.0
  General and administrative    13.8       14.4
  Amortization of goodwill       1.4        2.2
                              -------    -------
     Total operating
     expenses                   49.7       67.0
                              -------     -------
Loss from
  operations                   (12.4)     (23.5)
                              -------     -------
Other income (expense):
  Interest income                1.8        2.7
  Interest expense              (0.0)      (0.0)
  Miscellaneous
   income (expense),net         (0.1)       0.3
                              -------     -------
Loss before
  income taxes                 (10.7)      (20.5)
Benefit
  for income taxes                --          --
                              -------     -------
Net loss                       (10.7)%     (20.5)%
                              =======     =======


REVENUES


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

Total revenues decreased 20.6% to $13.5 million in the quarter ended July 31,
2001, from $17.0 million in the quarter ended July 31, 2000.

    SOFTWARE LICENSE REVENUES.  Revenues from software licenses decreased
84.4% to $0.6 million in the quarter ended July 31, 2001, from $4.1 million
in the quarter ended July 31, 2000. Management believes the decrease in
software license revenue was due to general market conditions.

    SERVICE AND MAINTENANCE REVENUES.  Revenues from service and maintenance
decreased 2.0% to $12.2 million in the quarter ended July 31, 2001, from
$12.4 million in the quarter ended July 31, 2000. Service and maintenance
revenues as a percentage of total revenues increased to 90.3% in the quarter
ended July 31, 2001, from 73.2% in the quarter ended July 31, 2000. This
increase in service and maintenance revenues as a percentage of total
revenues was due to the decrease in software license revenues for the quarter
compared to the comparable quarter in fiscal 2001.

    OTHER REVENUES.  Other revenues are primarily third-party hardware sales
to the Company's Scandinavian customer base.  Other revenues increased 52.7%
to $658,000 in the quarter ended July 31, 2001, from $431,000 in the quarter
ended July 31, 2000. Other revenues as a percentage of total revenues
increased to 4.9% in the quarter ended July 31, 2001, from 2.5% in the
quarter ended July 31, 2000. Other revenues vary over time as a percentage of
total revenues due to the size of specific hardware sales and to fluctuations
in software license revenues.

COST OF REVENUES

    COST OF SOFTWARE LICENSE REVENUES.  Cost of software license revenues
consists primarily of license fees paid with respect to embedded third-
party software included with the licenses of the Company's software products
and, occasionally, the cost of third-party complementary software that is
licensed together with the Company's software without being embedded.  In
addition, cost of software license revenues may include royalty fees paid to
partners that are directly related to license sales. Cost of software license
revenues was $16,000 and $318,000 in the quarters ended July 31, 2001 and
2000, representing 2.5% and 7.7% of software license revenues, respectively.
The decrease of cost of software license revenues as a percentage of software
license revenues in the first quarter of fiscal 2002 compared to the same
period in the prior year was primarily due a lower cost for licenses and
royalties paid to third party partners for the licenses sold in the first
quarter of fiscal 2001.

    COST OF SERVICE AND MAINTENANCE REVENUES.  Cost of service and
maintenance revenues consists primarily of costs associated with consulting,
implementation, and training services and the use by the Company of third-
party consultants to perform implementation services for the Company's
customers.  Cost of service and maintenance revenues also includes the cost
of providing software maintenance to customers, such as telephone hotline
support.

    Cost of service and maintenance revenues was $8.3 million and $9.1
million in the quarters ended July 31, 2001, and 2000, representing 68.0% and
73.3% of service and maintenance revenues, respectively. The decrease in the
cost of service and maintenance revenues in absolute dollar amounts and as a
percentage of service and maintenance revenue was primarily due to a
reduction in the number and more effective utilization of employed
consultants, a reduction in the use of outside consultants, and a decrease in
the amount of service and maintenance performed.

    COST OF OTHER REVENUES.  Cost of other revenues consists primarily of the
cost of third-party hardware supplied to certain customers.  Cost of other
revenues was $164,000 and $168,000 in the quarters ended July 31, 2001, and
2000, representing 24.9% and 39.0% of other revenues, respectively.

    PRODUCT DEVELOPMENT.  Product development expenses were $2.5 million and
$4.1 million in the quarters ended July 31, 2001, and 2000, representing
18.5% and 24.4% of total revenues, respectively. The decrease in product
development expenses was due to a decrease in the number of product
development personnel.

    In accordance with Statement of Financial Accounting Standards No. 86,
software development expenses are expensed as incurred until technological
feasibility has been established, at which time such costs are capitalized
until the product is available for general release to customers.  To date,
the establishment of technological feasibility of the Company's products and
general release of such software have substantially coincided.  As a result,
the Company has not capitalized any software development costs since such
costs have been immaterial.

    SALES AND MARKETING.  Sales and marketing expenses include personnel
costs, commissions, and related costs for sales and marketing personnel, as
well as the cost of office facilities, travel, promotional events, and public
relations programs.  Sales and marketing expenses were $2.2 million and $4.4
million in the quarters ended July 31, 2001, and 2000, representing 16.0% and
26.0% of total revenues, respectively. The decrease in sales and marketing
expenses in absolute dollar amount and as a percentage of total revenues was
primarily due to fewer sales during the first quarter of fiscal 2002 compared
to the prior year and a reduction in the size of the sales organization.

    GENERAL AND ADMINISTRATIVE.  Ongoing general and administrative expenses
consist primarily of salaries and costs of the Company's finance, human
resources, information systems, administrative, and executive staff and the
fees and expenses associated with legal, accounting, and other services.
General and administrative expenses were $1.9 million and $2.4 million in the
quarters ended July 31, 2001, and 2000, representing 13.8% and 14.4% of total
revenues, respectively.  The decrease in absolute dollars is attributable to
a reduction in staff.

    AMORTIZATION OF GOODWILL AND OTHER INTANGIBLE ASSETS. Amortization of
goodwill and other intangible assets relates to various acquisitions made by
the Company, and during fiscal 2001, the Company wrote down the goodwill
relating to one such acquisition.  Goodwill and other intangible assets are
amortized over a 5 to 10 year period.  Amortization of goodwill and other
intangible assets was $185,000 and $376,000 in the quarters ended July 31,
2001, and 2000, representing 1.4% and 2.2% of total revenues, respectively.

OTHER INCOME (EXPENSE)

    Other income comprises interest income, interest expenses, and
miscellaneous income and expenses.  Interest income was $245,000 and $466,000
in the quarters ended July 31, 2001, and 2000, representing 1.8% and 2.7% of
total revenues, respectively. The decrease was due to a decrease in the
levels of short-term investments and cash held in interest-bearing accounts
compared to the amounts invested in the same period in the prior year as a
result of the Company's net loss as well as lower interest rates.  Interest
expenses were $0 and $6,000 in the quarters ended July 31, 2001, and 2000,
representing 0.0% and 0.0% of total revenues, respectively. The decrease in
the absolute dollar amount is due to a reduction of a small external credit
facility.


LIQUIDITY AND CAPITAL RESOURCES

    As of July 31, 2001, the Company had $15.7 million of working capital,
including $21.3 million in cash and cash equivalents, as compared to $16.5
million of working capital as of April 30, 2001, including $12.1 million in
cash and cash equivalents and $12.9 million in short-term investments.
Accounts receivable, net of allowance for doubtful accounts, decreased to
$8.9 million at July 31, 2001, from $11.0 million at April 30, 2001, and the
average days' sales outstanding, including contract receivables, was 71 days
for the quarter ended July 31, 2001, compared to an average of 72 days for
fiscal year 2001.  The decrease in accounts receivable in total dollars is
attributable to the decrease in license revenues.  The Company believes that
existing cash and cash equivalent balances, short-term investments, and
potential cash flow from operations will satisfy the Company's working
capital and capital expenditure requirements for at least the next 12 months.

QUALITATIVE AND QUANTITATIVE DISCLOSURE ABOUT MARKET RISK

The Company does not believe it is exposed to market risks with respect to
any of its investments; the Company does not utilize market rate sensitive
instruments for trading or other purposes. As of July 31, 2001, the Company
had no long-term or short-term investments.



                  PART II. - OTHER INFORMATION


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

          a.  Exhibits

              10.1.  Amendment dated March 22, 2001, to the amended and
              restated Employment Agreement dated April 3, 1997, between
              the Company and Stig Durlow.

          b.  Reports on Form 8-K

              No reports have been filed on Form 8-K during the quarter
              ended July 31, 2001.



                              SIGNATURES


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


                                  INDUSTRI-MATEMATIK INTERNATIONAL CORP.



                                  BY: s/ Stig Durlow
                                      ---------------------------
                                      Stig Durlow
                                      Principal Executive Officer



                                  BY: s/ Karl Asp
                                      ---------------------------
                                      Karl Asp
                                      Principal Financial Officer


DATE: September 14, 2001