<PAGE>

                      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, 1999

OR

[_]  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: 0-26507

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

              MINNESOTA                                      41-1628214
     (State or other jurisdiction of                      (I.R.S. Employer
    incorporation or organization)                        Identification No.)

   4115 Highway 52 North, Suite 300
      Rochester, Minnesota                                     55901-0144
(Address of principal executive offices)                       (Zip Code)

                                (507) 288-5922
             (Registrants's telephone number, including area code)

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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

                 10,286,613 Common Shares as of August 6, 1999.
<PAGE>

                               Table of Contents

                     SHOWCASE CORPORATION AND SUBSIDIARIES

                              Report on Form 10-Q
                               for quarter ended
                                 June 30, 1999

<TABLE>
<CAPTION>
                                                                                                        Page
                                                                                                        ---
<S>                                                                                                     <C>
PART I.   FINANCIAL INFORMATION

      Item 1.  Financial Statements

               Consolidated Statements of Operations for the three months ended
               June 30, 1999 and 1998................................................................      2

               Consolidated Balance Sheets as of June 30, 1999 and March 31, 1999....................      3

               Consolidated Statements of Cash Flows for the three months ended
               June 30, 1999 and 1998................................................................      4

               Notes to Consolidated Financial Statements............................................      5

      Item 2.  Management's Discussion and Analysis of Financial Condition and
               Results of Operations.................................................................      7

      Item 3.  Quantitative and Qualitative Disclosure About Market Risks............................     13

PART II.  OTHER INFORMATION

      Item 1.  Legal Proceedings.....................................................................     13

      Item 2.  Charges in Securities and Use of Proceeds.............................................     13

      Item 3.  Defaults upon Senior Securities.......................................................     13

      Item 4.  Submission of Matters to a Vote of Security Holders...................................     14

      Item 5.  Other Information.....................................................................     14

      Item 6.  Exhibits and Reports on Form 8-K......................................................     15
</TABLE>

                                      -1-
<PAGE>

                     SHOWCASE CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                  Three Months Ended
                                                                        June 30,
                                                                 -------------------
Revenues:                                                           1999      1998
                                                                 ---------  --------
<S>                                                              <C>        <C>
 License fees...............................................       $ 6,065    $4,224
 Maintenance and support....................................         3,206     2,161
 Professional service fees..................................         1,234       913
                                                                 ---------  --------
   Total revenues...........................................        10,505     7,298
                                                                 ---------  --------

Cost of revenues:
 License fees...............................................         1,068       817
 Maintenance and support....................................           824       565
 Professional service fees..................................         1,032       613
                                                                 ---------  --------
   Total cost of revenues...................................         2,924     1,995
                                                                 ---------  --------
Gross margin................................................         7,581     5,303
                                                                 ---------  --------

Operating expense:
 Sales and marketing........................................         5,275     4,387
 Product development........................................         1,163       979
 General and administrative.................................           941       736
                                                                 ---------  --------
   Total operating expenses.................................         7,379     6,102
                                                                 ---------  --------
Operating income (loss).....................................           202      (799)
                                                                 ---------  --------

Other income (expense), net:
 Interest expenses..........................................            (7)      (53)
 Interest income............................................           104        59
 Other income (expense), net................................             1        --
                                                                 ---------  --------
   Total other income (expense), net........................            98         6
                                                                 ---------  --------
Net income (loss) before income taxes.......................           300      (793)
Income taxes................................................           115        40
                                                                 ---------  --------
Net income (loss)...........................................       $   185    $ (833)
                                                                 =========  ========

Other comprehensive income (loss):
 Foreign currency translation adjustment....................            34        16
 Unrealized holding gain (loss) on securities...............            32      (123)
                                                                 ---------  --------
Comprehensive income (loss).................................       $   251    $ (940)
                                                                 =========  ========

Net income (loss) per share:
 Basic......................................................       $  0.04    $(0.20)
                                                                 =========  ========
 Diluted....................................................       $  0.02    $(0.20)
                                                                 =========  ========
Weighted average shares outstanding used in
 computing basic net income (loss) per share................         4,542     4,190
Weighted average shares outstanding used in
 computing diluted net income (loss) per share..............         8,371     4,190
</TABLE>

          See accompanying notes to consolidated financial statements

                                      -2-
<PAGE>

                     SHOWCASE CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                                  (Unaudited)
                   (in thousands, except per share amounts)

<TABLE>
<CAPTION>
Assets                                                                           June 30, 1999   March 31, 1999
                                                                                 -------------   --------------
<S>                                                                              <C>             <C>
Current Assets:
 Cash...................................................................               $ 7,087          $ 8,900
 Marketable securities..................................................                   171              139
 Accounts receivable, net...............................................                 7,349            7,070
 Prepaid expenses and other current assets..............................                 1,228            1,059
 Deferred income taxes..................................................                   550              550
                                                                                 -------------   --------------
   Total current assets.................................................                16,385           17,718
                                                                                 -------------   --------------
Property and equipment, net.............................................                 2,224            2,092
Goodwill, net of accumulated amortization...............................                   101              116
                                                                                 -------------   --------------
   Total assets.........................................................               $18,710          $19,926
                                                                                 =============   ==============
Liabilities and Stockholders' Equity
Current Liabilities:
 Accounts payable.......................................................               $ 1,102          $ 1,373
 Accrued liabilities....................................................                 4,338            4,121
 Current portion of long-term debt......................................                     5                5
 Current portion of obligations under capital leases....................                   123              127
 Income taxes payable...................................................                    --              295
 Deferred revenue.......................................................                10,533           11,646
                                                                                 -------------   --------------
   Total current liabilities............................................                16,101           17,567
                                                                                 -------------   --------------

Long-term debt, less current portion....................................                     2                2
Capital lease obligations, less current portion.........................                    55               85
                                                                                 -------------   --------------
   Total liabilities....................................................                16,158           17,654
                                                                                 -------------   --------------

Stockholders' equity:
 Series A convertible preferred stock; $.01 par value;..................                     5                5
  473,757 shares authorized, issued, and outstanding,
  total liquidation preference of $2,400
 Series B convertible preferred stock; $.01 par value;..................                     9                9
  1,777,500 shares authorized, 875,000 issued and outstanding,
  total liquidation preference of $3,5000
 Common stock, $.01 par value, 10,000,000 shares authorized,............                    45               45
  4,527,387 and 4,502,867 shares issued and outstanding
 Additional paid-in capital.............................................                 6,612            6,452
 Accumulated other comprehensive income:
  Cumulative translation adjustment.....................................                    81               47
  Unrealized holding loss on securities.................................                  (149)            (181)
 Deferred compensation..................................................                  (453)            (322)
 Accumulated deficit....................................................                (3,598)          (3,783)
                                                                                 -------------   --------------
   Total stockholders' equity...........................................                 2,552            2,272
                                                                                 -------------   --------------
   Total liabilities and stockholders' equity...........................               $18,710          $19,926
                                                                                 =============   ==============
</TABLE>

          See accompanying notes to consolidated financial statements

                                      -3-
<PAGE>

                     SHOWCASE CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                (in thousands)

<TABLE>
<CAPTION>
                                                                          Three Months Ended
                                                                               June 30,
                                                                          ------------------
                                                                            1999      1998
                                                                          -------    -------
<S>                                                                       <C>        <C>
Cash flows from operating activities:
 Net income (loss)....................................................    $   185    $ (833)
 Adjustments to reconcile net income (loss)
  to cash provided by (used in) operating activities:
   Depreciation and amortization......................................        197       205
   Provision for returns and doubtful accounts, net of returns
     and writeoffs....................................................        (90)       45
   Deferred compensation amortization.................................         21        --
   Changes in operating assets and liabilities, net of effect
     of foreign exchange rate changes:
      Accounts receivable.............................................       (189)    1,571
      Prepaid expenses................................................       (169)       61
      Income taxes receivable.........................................         --       (45)
      Accounts payable................................................       (271)     (328)
      Accrued liabilities.............................................        217        29
      Deferred revenue................................................     (1,113)      219
      Income taxes payable............................................       (295)       40
                                                                          -------    ------
          Net cash provided by (used in) operating activities.........     (1,507)      964
                                                                          -------    ------

Cash flows from investing activities:
 Purchase of property and equipment...................................       (280)     (248)
 Proceeds from affiliates.............................................         --        12
                                                                          -------    ------
        Net cash used in investing activities.........................       (280)     (236)
                                                                          -------    ------

Cash flows from financing activities:
 Proceeds from exercise of stock options..............................          8        95
 Payments on long-term debt...........................................         --       (94)
 Payments of capitalized lease obligations............................        (34)      (42)
                                                                          -------    ------
        Net cash used in financing activities.........................        (26)      (41)
                                                                          -------    ------
Net increase (decrease) in cash.......................................     (1,813)      687
Cash, beginning of year...............................................      8,900     5,404
                                                                          -------    ------
Cash, end of year.....................................................    $ 7,087    $6,091
                                                                          =======    ======
Supplemental disclosure of cash flow information:
 Cash paid during the three months for interest.......................    $     7    $   53
                                                                          =======    ======

 Cash paid during the three months for income taxes...................    $   549    $   49
                                                                          =======    ======
</TABLE>

See accompanying notes to consolidated financial statements.

                                      -4-
<PAGE>

                    SHOWCASE CORPORATION AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements

(1)  Basis of Presentation

     The unaudited interim consolidated financial statements include the
     accounts of ShowCase Corporation and its wholly owned subsidiaries
     (collectively, the "Company") and have been prepared by the Company in
     accordance with generally accepted accounting principles, pursuant to the
     rules and regulations of the Securities and Exchange Commission.
     Accordingly, certain information and footnote disclosures normally included
     in the financial statements have been omitted or condensed pursuant to such
     rules and regulations.  The information furnished reflects, in the opinion
     of the management of the Company, all adjustments, consisting primarily of
     recurring accruals, considered necessary for a fair presentation of the
     financial position and the results of operations.

     The Company adopted the provisions of Statement of Position ("SOP") No. 98-
     1, Accounting for the Costs of Computer Software Developed or Obtained for
     Internal Use; SOP No. 98-5, Reporting on the Costs of Start-Up Activities,
     and SOP No. 98-9, Modification of SOP 97-2, Software Revenue Recognition,
     with Respect to Certain Transactions, effective April 1, 1999.  The
     adoption of these pronouncements did not have a material effect on the
     Company's operating results.

(2)  Net Income (Loss) per Share

     Basic income (loss) per share represents net income (loss) divided by the
     weighted average number of common shares outstanding during the period.
     Diluted income (loss) per share represents net income (loss) divided by the
     sum of the weighted average number of common shares outstanding plus shares
     derived from other potentially dilutive securities.  Potentially dilutive
     securities include "in-the-money" fixed stock options and warrants and the
     amount of weighted average common shares which would be added by the
     conversion of outstanding convertible preferred stock.  The number of
     shares added for stock options and warrants is determined by the treasury
     stock method, which assumes exercise of these options and warrants and the
     use of any proceeds from such exercise to repurchase a portion of these
     shares at the average market price for the period.  When the results of
     operations are a loss, other potentially dilutive securities are not
     included in the calculation of loss per share.

     For the three months ended June 30, 1998, basic loss per share is the same
     as diluted loss per share because the effect of the inclusion of other
     potentially dilutive securities in the calculation of diluted loss per
     share was antidilutive.

     The number of option shares excluded from the calculation of potentially
     dilutive securities because either the exercise price exceeded the average
     market price or their inclusion in a calculation of net loss per share
     would have been antidilutive was 758,612 for the three months ended June
     30, 1998. The effect of conversion of the Company's convertible preferred
     stock was also excluded from the calculation of net loss per diluted share
     because the resulting impact would also have been antidilutive for the
     three months ended June 30, 1998.  At June 30, 1998, the Series A and
     Series B convertible preferred stock were convertible into 1,895,028 and
     864,198 common shares, respectively.

(3)  Deferred Compensation

     During the three months ended June 30, 1999, the Company granted to
     employees options to purchase 81,000 shares of common stock.  The Company
     recorded deferred compensation of approximately $153,000, representing the
     difference between the deemed value of the common stock

                                      -5-
<PAGE>

                    SHOWCASE CORPORATION AND SUBSIDIARIES
           Notes to Consolidated Financial Statements - (Continued)

     for accounting purposes and the option exercise price of such options on
     the date of grant. The Company accounts for these stock options in
     accordance with APB Opinion No. 25, Accounting for Stock Issued to
     Employees, and will recognize the deferred compensation cost over the five
     year vesting period of options granted.

(4)  Initial Public Offering, Increase in Number of Shares of Common Stock
     Authorized and Conversion of Preferred Stock

     On June 29, 1999, the Company's registration statement for its initial
     public offering of 3,000,000 shares of common stock at $9.00 per share was
     declared effective by the Securities and Exchange Commission.  The closing
     of the sale of such shares occurred on July 6, 1999 at which time the
     3,000,000 common shares were issued and proceeds, net of the underwriting
     discount, of $25,110,000 were received.

     On July 6, 1999, the Company increased the number of shares of authorized
     common stock to 50,000,000. Also, on July 6, 1999, the outstanding shares
     of the Company's Series A and Series B convertible preferred stock were
     converted into 1,895,028 and 864,198 shares of common stock, respectively.

                                      -6-
<PAGE>

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

     All statements, trend analysis and other information contained in the
following discussion relative to markets for our products and trends in
revenues, gross margins and anticipated expense levels, as well as other
statements including words such as "anticipate," "believe," "plan," "estimate,"
"expect," "intend" and other similar expressions constitute forward-looking
statements. These forward-looking statements are subject to business and
economic risks and uncertainties, including but not limited to those described
in Exhibit 99.1 to this Quarterly Report on Form 10-Q (this "Report"), as well
as those discussed in our Registration Statement on Form S-1 (File No. 333-
77223) (the "Registration Statement"). Our actual results of operations may
differ materially from those contained in the forward-looking statements. All
forward-looking statements included in this Report are based on information
available to us on the date of this Report, and we assume no obligation to
update these forward-looking statements, or to update the reasons why actual
results could differ from those projected in these forward-looking statements.

Overview

     We are the leading provider of fully integrated, end-to-end, business
intelligence solutions for IBM AS/400 customers. Our ShowCase STRATEGY(R)
product suite and related services are designed to enable organizations to
rapidly implement business intelligence solutions that create increased value
from their operational and customer data. The sophisticated data warehousing and
management capabilities of our product suite provides our clients with highly
scalable and tightly integrated solutions. Our products enable enterprise-wide
distribution of information and allow end-user access and analysis through
familiar applications and Internet browsers. We have eight years of experience
delivering business intelligence solutions. Our ShowCase STRATEGY product suite,
introduced in 1996, supports ad hoc information access, enterprise reporting and
analytics.

     We were incorporated in 1988, and in 1991, introduced the first Windows-
based query tool for the IBM AS/400, ShowCase VISTA. During the next four years,
we continued to broaden our family of data access products, expand our
comprehensive service and support programs, grow our telesales and indirect
sales channels and invest in marketing and administrative functions. To support
the introduction of the ShowCase STRATEGY product suite in 1996, we created a
direct field sales force and increased our global distribution presence. Our
revenues increased to $10.5 million for the three months ended June 30, 1999
from $7.3 million for the three months ended June 30, 1998. Although our
revenues have increased significantly in recent periods, this growth may not
continue. We intend to continue to invest significant resources in the
development of our product suite, sales and marketing and general and
administrative functions.

     Our revenues come from three principal sources: license fees, maintenance
and support and professional service fees. We adopted the provisions of
Statement of Position ("SOP") No. 97-2, Software Revenue Recognition, as amended
by SOP No. 98-4, Deferral of the Effective Date of Certain Provisions of SOP No.
97-2, effective April 1, 1998, and SOP No. 98-9, Modification of SOP No. 97-2,
Software Revenue Recognition, with Respect to Certain Transactions, effective
April 1, 1999. Under SOP No. 97-2, we recognize license revenue when the
software product has been delivered, if a signed contract exists, the fee is
fixed and determinable, collection of resulting receivables is probable and
product returns are reasonably estimable. License fee revenues that are
contingent upon sale to an end user by distributors and other distribution
partners are recognized upon receipt of a report of delivery to the end user.
Maintenance and support fees committed as part of new product license sales and
maintenance resulting from renewed maintenance contracts are deferred and
recognized ratably over the contract period. Professional service revenue is
recognized when services are performed.

                                      -7-
<PAGE>

     We sell our products through a direct sales force and through indirect
distribution channels. Direct sales are made by our telesales organization and
direct field sales force in North American and by wholly-owned subsidiaries in
Germany, France, the United Kingdom and Belgium, including its branch office in
the Netherlands. Our distribution partners include IBM, software application
vendors, resellers and distributors located in the United States, Italy,
Switzerland, Mexico, Japan, Australia, Singapore, Hong Kong, Thailand and South
Korea. Sales through indirect channels accounted for approximately 17.8% and
21.1% of license fee revenues for the three months ended June 30, 1999 and 1998,
respectively.

     Revenues from clients outside North America represented 31.3% and 46.5% of
total revenue for the three months ended June 30, 1999 and 1998, respectively.
A majority of these sales was derived from European sales.  We intend to
continue to expand our international operations and have committed, and will
continue to commit, significant management time and financial resources to
developing direct and indirect international sales channels.

Results of Operations For the Three Months Ended June 30, 1999 and 1998

     The following table sets forth certain statement of operations data as a
percentage of total revenues for the periods indicated.

<TABLE>
<CAPTION>
                                            THREE MONTHS ENDED JUNE 30,
                                            ----------------------------
                                                1999           1998
                                            ------------   -------------
<S>                                         <C>            <C>
As a Percentage of Total Revenues:
Revenues:
 License fees............................           57.7%           57.9%
 Maintenance and support.................           30.5            29.6
 Professional service fees...............           11.7            12.5
                                            ------------   -------------
   Total revenues........................          100.0           100.0

Cost of revenues:
 License fees............................           10.2            11.2
 Maintenance and support.................            7.8             7.7
 Professional service fees...............            9.8             8.4
                                            ------------   -------------
   Total cost of revenues................           27.8            27.3
                                            ------------   -------------
Gross margin.............................           72.2            72.7

Operating expenses:
 Sales and marketing.....................           50.2            60.1
 Product development.....................           11.1            13.4
 General and administrative..............            9.0            10.1
                                            ------------   -------------
   Total operating expenses..............           70.2            83.6
                                            ------------   -------------
Operating income (loss)..................            1.9           (10.9)
Other income (expense), net..............            0.9             0.1
                                            ------------   -------------
Net income (loss) before income taxes....            2.9           (10.9)
Income taxes.............................            1.1             0.5
                                            ------------   -------------
Net income (loss)                                    1.8%          (11.4)%
                                            ============   =============
</TABLE>

                                      -8-
<PAGE>

Revenues

     Total revenues. Total revenues increased to $10.5 million for the three
months ended June 30, 1999 from $7.3 million for the three months ended June 30,
1998, representing an increase of 43.9%.

     License fees. License fee revenues increased to $6.1 million for the three
months ended June 30, 1999 from $4.2 million for the three months ended June 30,
1998, representing an increase of 43.6%. License fee revenues as a percentage of
total revenues were 57.7% and 57.9% for the three months ended June 30, 1999 and
1998, respectively. This increase in license fee revenues is largely
attributable to an increase in the number of licenses sold by our expanded
direct field sales force.

     Maintenance and support. Maintenance and support revenues increased to $3.2
million for the three months ended June 30, 1999 from $2.2 million for the three
months ended June 30, 1998, representing and increase of 48.4%. Maintenance and
support revenues as a percentage of total revenues were 30.5% and 29.6% for the
three months ended June 30, 1999 and 1998, respectively. This increase in
maintenance and support revenues was largely a result of the renewal of
maintenance and support contracts, as well as new maintenance and support
contracts associated with new product licenses.

     Professional service fees. Professional service fee revenues increased to
$1.2 million for the three months ended June 30, 1999 from $0.9 million for the
three months ended June 30, 1998, representing an increase of 35.2%.
Professional service revenues as a percentage of total revenues were 11.7% and
12.5% for the three months ended June 30, 1999 and 1998, respectively. This
increase in professional service revenues was largely a result of the services
revenues associated with the sale of new product licenses.

Costs of Revenues

     Cost of license fees. Cost of license fees consists primarily of the costs
of product manuals, media, packaging, shipping and royalties paid to third
parties. Cost of license fees increased to $1.1 million for the three months
ended June 30, 1999 from $0.8 million for the three months ended June 30, 1998,
representing 17.6% and 19.3% of total license fees for such periods,
respectively. The increase in cost of license fees in dollar amount was
primarily attributable to the increase in the percentage of revenues from our
Essbase/400 product, for which we pay royalties. Revenues from our Essbase/400
product represented 43.6% and 40.6% of our total license fee revenues for the
three months ended June 30, 1999 and 1998, respectively. We anticipate that cost
of license fees will increase in dollar amount in future periods as license fee
revenues increase. Cost of license fees as a percentage of total license fees
may increase if we enter into additional royalty arrangements or if sales of
Essbase/400 or other products which carry a royalty obligation increase as a
percentage of total license revenues.

     Cost of maintenance and support. Cost of maintenance and support revenues
consists primarily of personnel costs associated with providing maintenance and
support services, particularly with respect to Essbase/400. Cost of maintenance
and support revenues increased to $0.8 million for the three months ended June
30, 1999 from $0.6 million for the three months ended June 30, 1998,
representing 25.7% and 26.1% of total maintenance and support revenues for such
periods, respectively. The increase in cost of maintenance and support revenues
in dollar amount was primarily due to the hiring of additional personnel. We
anticipate that cost of maintenance and support will increase in dollar amount
in future periods as maintenance and support revenues increase.

                                      -9-
<PAGE>

     Cost of professional service fees. Cost of professional service fees
consists primarily of the costs of providing training and consulting services.
Cost of professional service fees increased to $1.0 million for the three months
ended June 30, 1999 from $0.6 million for the three months ended June 30, 1998,
representing 83.6% and 67.1% of professional service fees for such periods,
respectively. This increase in cost of professional service fees was primarily
due to the expansion of our professional services staff. We anticipate that cost
of professional service fees will increase in dollar amount in future periods as
professional service fee revenues increase.

Operating Expenses

     Sales and marketing. Sales and marketing expenses consist primarily of
salaries, benefits, bonuses, commissions and travel and promotional expenses.
Sales and marketing expenses increased to $5.3 million for the three months
ended June 30, 1999 from $4.4 million for the three months ended June 30, 1998,
representing 50.2% and 60.1% of total revenues for such periods, respectively.
The increase in sales and marketing expenses in dollar amount reflected the
hiring of additional sales and marketing personnel and expanded promotional
activities. We anticipate that sales and marketing expenses will increase in
dollar amount in future periods.

     Product development. Product development expenses consist primarily of
development personnel compensation and related costs associated with the
development of new products, the enhancement of existing products, quality
assurance and testing. Product development expenses increased to $1.2 million
for the three months ended June 30, 1999 from $1.0 million for the three months
ended June 30, 1998, representing 11.1% and 13.4% of total revenues for such
periods, respectively. This increase in dollar amount was due to expenses
associated with the development of new products and the hiring of additional
personnel. Product development expenses decreased as a percentage of total
revenues primarily due to faster revenue growth. We anticipate that we will
continue to devote substantial resources to product development efforts and that
product development expenses will increase in dollar amount in future periods.
To date, all product development costs have been expensed as incurred.

     General and administrative. General and administrative expenses consist
primarily of salaries of executive, financial, human resources and information
services personnel as well as outside professional fees. General and
administrative expenses increased to $0.9 million for the three months ended
June 30, 1999 from $0.7 million for the three months ended June 30, 1998,
representing 9.0% and 10.1% of total revenues for such periods, respectively.
This increase in dollar amount was primarily due to increased staffing and
related expenses necessary to manage and support the expansion of operations.
General and administrative expenses decreased as a percentage of total revenues
primarily due to faster revenue growth. We anticipate that general and
administrative expenses will increase in dollar amount in the future as a result
of increased personnel and infrastructure costs necessary to support the
expansion of operations as well as the increased expenses associated with being
a public company.

Other Income

     Other income for the periods ended June 30, 1999 and 1998 consisted
primarily of interest income and interest expenses. Other income increased to
$98,000 for the three months ended June 30, 1999 from $6,000 for the three
months ended June 30, 1998.

                                      -10-
<PAGE>

Provision (Benefit) for Income Taxes

     Income taxes increased to $115,000 for the three months ended June 30, 1999
from $40,000 for the three months ended June 30, 1998, primarily due to higher
income from operations.

Liquidity and Capital Resources

     Historically, we have funded operations primarily through cash provided by
operations, the sale of equity securities and bank borrowings. Operating
activities used cash of $1.5 million for the three months ended June 30, 1999
and provided cash of $1.0 million for the three months ended June 30, 1998. This
decrease in cash from operating activities was due primarily to a decrease in
deferred revenue offset by improved results of operations.

     Investing activities used cash of $280,000 and $236,000 for the three
months ended June 30, 1999 and 1998, respectively. The principal use of cash in
investing activities was for capital expenditures related to the acquisition of
computer equipment and furniture required to support the expansion of our
operations.

     Financing activities used cash of $26,000 and $41,000 in the three months
ended June 30, 1999 and 1998, respectively. For the three months ended June 30,
1999, cash used by financing activities consisted primarily of payments on
capitalized lease obligations. For the three months ended June 30, 1998, cash
used by financing activities consisted primarily of long-term debt repayment,
payments under capitalized lease obligations and the receipt of proceeds from
the exercise of stock options.

     Our sources of liquidity at June 30, 1999 consisted principally of cash and
marketable securities of $7.3 million. We believe that cash generated from
operations, existing cash and marketable securities, and proceeds, net of the
underwriting discount, of $25.1 million received on July 6, 1999 from our
initial public offering (the "IPO") will be sufficient to fund operations for at
least the next twelve months.

Year 2000

     Many currently installed computer systems and software products store dates
using two digits of the calendar year. These date code fields will need to
accept four-digit entries to distinguish 21st century dates from 20th century
dates. This problem could result in system failures or miscalculations causing
disruptions of business operations, including, among other things, a temporary
inability to process transactions, send invoices or engage in other similar
business activities. As a result, many companies' computer systems and software
will need to be upgraded or replaced in order to comply with Year 2000
requirements. The potential global impact of the Year 2000 problem is not known.
If Year 2000 problems are not corrected in a timely manner, they could affect us
and the U.S. and world economies generally.

     Even though our current products are Year 2000 compliant, we may lose
potential sales because companies may be diverting resources to assess and fix
their internal systems that may not be Year 2000 compliant.

     We have formed a project team to address internal Year 2000 issues. Our
internal financial, manufacturing and other computer systems are being reviewed
to assess and remediate Year 2000 problems. Our assessment of internal systems
includes our information technology, or IT, systems as well as other systems
which include embedded technology in equipment containing microprocessors or
other similar circuitry. Our Year 2000 compliance program includes the following
phases:

                                      -11-
<PAGE>

     .    identifying systems that need to be modified or replaced;

     .    carrying out remediation work to modify existing systems or convert to
          new systems; and

     .    conducting validation testing of systems and applications to ensure
          compliance.

     The amount of remediation work required to address Year 2000 problems is
not expected to be extensive. We have replaced certain of our operational
systems and most of our personal computers in the last several years. We believe
that new equipment and software, including new accounting software to be
installed in 1999, substantially addresses Year 2000 issues. However, we will be
required to modify some of our existing hardware and software in order for our
computer systems to function properly in the year 2000 and thereafter. We
estimate that we will complete our Year 2000 compliance program for all of our
significant internal systems no later than September 30, 1999, at an estimated
cost of $65,000, of which amount we estimate that we have spent approximately
$25,000 to date. There can be no assurance that the estimates are correct or
that actual costs will not be materially greater than anticipated.

     In addition, by September 30, 1999, we plan to survey our major suppliers
and evaluate their plans to address potential Year 2000 issues. We will rely
primarily on our suppliers' commitments to accomplish this task although we have
no contractual commitments from these suppliers regarding Year 2000 issues. It
is impossible to fully assess the potential consequences in the event
interruptions from suppliers occur or in the event that there are disruptions in
infrastructure areas as utilities, communications, transportation, banking or
government. Although we have not surveyed our current clients regarding Year
2000 compliance, we are unaware of any reason why a Year 2000 problem
experienced by these clients would have a significant adverse effect on our
operating results.

     Based on assessments to date, we believe we will not experience any
material disruptions as a result of Year 2000 problems in internal processes,
information processing, interfaces with major clients or with processing orders
and billing. However, if suppliers or other third-party providers, such as those
providing electricity, water or telephone services, experience difficulties in
providing products or services to us because of their Year 2000 problems, we
believe that the most reasonably likely worst case scenario would be that our
ability to timely ship our products to our clients would be disrupted. This
could result in the loss of current or potential clients which could seriously
harm our business and operating results. In addition, if our IT systems are not
Year 2000 compliant, we would have to devote significant resources to correct
such problems, and we may be unable to process client orders, which could lead
to shipment delays. We have not yet developed a contingency plan to address
these potential issues, but we will assess the need to develop such a plan based
on the outcome of our Year 2000 review. Assuming no major disruption in service
from suppliers or other third-parties, we believe that we will be able to manage
our total Year 2000 transition without any substantial harm to our business and
operating results.

New Accounting Pronouncements

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133 established methods of
accounting for derivative financial instruments and hedging activities related
to those instruments as well as other hedging activities. SFAS No. 133 will be
effective for us in April 2001. We are currently reviewing the potential impact
of this accounting standard.

                                      -12-
<PAGE>

Item 3.  Quantitative and Qualitative Disclosure About Market Risks

     There have been no material changes in our market risk during the three
months ended June 30, 1999 from that set forth on page 25 of the Registration
Statement under the heading "Quantitative and Qualitative Disclosure About
Market Risks."


                          PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

     We are not a party to any material legal proceedings.


Item 2.  Changes in Securities and Use of Proceeds

     We issued and sold during the three months ended June 30, 1999 an aggregate
of 24,520 shares of our common stock to employees upon exercise of outstanding
stock options. The net aggregate consideration received for such shares was
approximately $8,000. The sale and issuance of these securities was deemed to be
exempt from registration under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance on Section 4(2) of the Securities Act as
transactions by an issuer not involving a public offering, where the purchasers
represented their intention to acquire securities for investment purposes only
and not with a view to or for sale in connection with any distribution thereof,
and received or had access to adequate information about us, or Rule 701
promulgated thereunder in that they were offered and sold either pursuant to
written compensatory benefit plans or pursuant to a written contract relating to
employment.

     Our registration statement, filed on Form S-1 under the Securities Act
(File No. 333-77223), for the IPO became effective June 29, 1999. The closing of
the sale of shares pursuant to the IPO occurred on July 6, 1999, at which time
we issued 3,000,000 shares of our common stock for an aggregate offering price
of $27.0 million. The managing underwriters for the IPO were Merrill Lynch,
Pierce, Fenner & Smith, U.S. Bancorp Piper Jaffray, Dain Rauscher Wessels and
FAC/Equities. Concurrent with the IPO, our outstanding shares of convertible
preferred stock were automatically converted into shares of common stock.

     We received net proceeds from the IPO of approximately $24.4 million after
deducting total estimated expenses of approximately $2.6 million, which included
the underwriting discount of approximately $1.9 million and other estimated
offering expenses of approximately $700,000. We expect to use the net offering
proceeds for general corporate purposes, including the expansion of our direct
sales force, product development and working capital. A portion of the proceeds
may also be used to acquire businesses, products or technologies that are
complementary to ours. There are no current agreements with respect to any
material acquisitions.

Item 3.  Defaults Upon Senior Securities

     None.

                                      -13-
<PAGE>

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

     On April 21, 1999, we submitted the following matters to our shareholders
at a special meeting:

     1.   The shareholders approved and adopted an amendment to our Articles of
          Incorporation filed prior to the IPO  to lower the minimum price per
          share requirement for mandatory conversion of our Series A convertible
          preferred stock, with the following vote:

               FOR:  7,033,614          AGAINST:  7,500      ABSTENTIONS:  1,200

     2.   The shareholders approved and adopted an amendment to our Articles of
          Incorporation filed prior to the IPO to lower the minimum price per
          share requirement for mandatory conversion of our Series B convertible
          preferred stock, with the following vote:

               FOR:  7,032,954          AGAINST:  7,500      ABSTENTIONS:  1,860

     3.   The shareholders approved and adopted an amendment and restatement of
          our Articles of Incorporation filed following the closing of the IPO,
          which, among other things, increased the number of authorized shares
          of our capital stock, with the following vote:

               FOR:  7,025,514          AGAINST: 14,940      ABSTENTIONS:  1,860

     4.   The shareholders approved an amendment and restatement of our Bylaws,
          which, among other things, created a staggered board of directors,
          with the following vote:

               FOR:  7,024,104          AGAINST:  14,940     ABSTENTIONS: 3,270

     5.   The shareholders approved our 1999 Stock Incentive Plan, with the
          following vote:

               FOR:  7,039,614          AGAINST:  0          ABSTENTIONS: 2,700

     6.   The shareholders approved our 1999 Employee Stock Purchase Plan, with
          the following vote:

               FOR:  7,032,614          AGAINST:  7,500      ABSTENTIONS: 2,200

     7.   The shareholders approved the classification of our directors, with
          the following vote:

               FOR:  7,024,104          AGAINST:  7,500      ABSTENTIONS: 10,710

Item 5.  Other Information

     None.

                                      -14-
<PAGE>

Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits:

          27.1 -- Financial Data Schedule
          99.1 -- Factors That May Affect Future Operating Results

     (b)  Reports on Form 8-K:

          The Company did not file any Current Report on Form 8-K during the
          quarter ended June 30, 1999.

                                      -15-
<PAGE>

                                  SIGNATURES

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

                                         SHOWCASE CORPORATION


Date:  August 13, 1999                   By:  /s/ Craig W. Allen
                                              ----------------------------------
                                              Craig W. Allen
                                              Chief Financial Officer
                                              (Duly authorized officer and
                                              principal financial and accounting
                                              officer)
<PAGE>

                                 EXHIBIT INDEX
                                 -------------

                                                                            Page
                                                                            ----

27.1 Financial Data Schedule
99.1 Factors That May Affect Future Operating Results
[{"type": "10-Q", "sequence": "1", "description": "FORM 10-Q", "secsgml_size_bytes": 53932}]
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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, 1999

OR

[_]  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: 0-26507

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

              MINNESOTA                                      41-1628214
     (State or other jurisdiction of                      (I.R.S. Employer
    incorporation or organization)                        Identification No.)

   4115 Highway 52 North, Suite 300
      Rochester, Minnesota                                     55901-0144
(Address of principal executive offices)                       (Zip Code)

                                (507) 288-5922
             (Registrants's telephone number, including area code)

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

Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.

                 10,286,613 Common Shares as of August 6, 1999.
Table of Contents

                     SHOWCASE CORPORATION AND SUBSIDIARIES

                              Report on Form 10-Q
                               for quarter ended
                                 June 30, 1999
Page
                                                                                                        ---
PART I.   FINANCIAL INFORMATION

      Item 1.  Financial Statements

               Consolidated Statements of Operations for the three months ended
               June 30, 1999 and 1998................................................................      2

               Consolidated Balance Sheets as of June 30, 1999 and March 31, 1999....................      3

               Consolidated Statements of Cash Flows for the three months ended
               June 30, 1999 and 1998................................................................      4

               Notes to Consolidated Financial Statements............................................      5

      Item 2.  Management's Discussion and Analysis of Financial Condition and
               Results of Operations.................................................................      7

      Item 3.  Quantitative and Qualitative Disclosure About Market Risks............................     13

PART II.  OTHER INFORMATION

      Item 1.  Legal Proceedings.....................................................................     13

      Item 2.  Charges in Securities and Use of Proceeds.............................................     13

      Item 3.  Defaults upon Senior Securities.......................................................     13

      Item 4.  Submission of Matters to a Vote of Security Holders...................................     14

      Item 5.  Other Information.....................................................................     14

      Item 6.  Exhibits and Reports on Form 8-K......................................................     15
-1-
SHOWCASE CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                  (Unaudited)
                    (in thousands, except per share amounts)
Three Months Ended
                                                                        June 30,
                                                                 -------------------
Revenues:                                                           1999      1998
                                                                 ---------  --------
License fees...............................................       $ 6,065    $4,224
 Maintenance and support....................................         3,206     2,161
 Professional service fees..................................         1,234       913
                                                                 ---------  --------
   Total revenues...........................................        10,505     7,298
                                                                 ---------  --------

Cost of revenues:
 License fees...............................................         1,068       817
 Maintenance and support....................................           824       565
 Professional service fees..................................         1,032       613
                                                                 ---------  --------
   Total cost of revenues...................................         2,924     1,995
                                                                 ---------  --------
Gross margin................................................         7,581     5,303
                                                                 ---------  --------

Operating expense:
 Sales and marketing........................................         5,275     4,387
 Product development........................................         1,163       979
 General and administrative.................................           941       736
                                                                 ---------  --------
   Total operating expenses.................................         7,379     6,102
                                                                 ---------  --------
Operating income (loss).....................................           202      (799)
                                                                 ---------  --------

Other income (expense), net:
 Interest expenses..........................................            (7)      (53)
 Interest income............................................           104        59
 Other income (expense), net................................             1        --
                                                                 ---------  --------
   Total other income (expense), net........................            98         6
                                                                 ---------  --------
Net income (loss) before income taxes.......................           300      (793)
Income taxes................................................           115        40
                                                                 ---------  --------
Net income (loss)...........................................       $   185    $ (833)
                                                                 =========  ========

Other comprehensive income (loss):
 Foreign currency translation adjustment....................            34        16
 Unrealized holding gain (loss) on securities...............            32      (123)
                                                                 ---------  --------
Comprehensive income (loss).................................       $   251    $ (940)
                                                                 =========  ========

Net income (loss) per share:
 Basic......................................................       $  0.04    $(0.20)
                                                                 =========  ========
 Diluted....................................................       $  0.02    $(0.20)
                                                                 =========  ========
Weighted average shares outstanding used in
 computing basic net income (loss) per share................         4,542     4,190
Weighted average shares outstanding used in
 computing diluted net income (loss) per share..............         8,371     4,190
See accompanying notes to consolidated financial statements

                                      -2-
SHOWCASE CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS
                                  (Unaudited)
                   (in thousands, except per share amounts)
Assets                                                                           June 30, 1999   March 31, 1999
                                                                                 -------------   --------------
Current Assets:
 Cash...................................................................               $ 7,087          $ 8,900
 Marketable securities..................................................                   171              139
 Accounts receivable, net...............................................                 7,349            7,070
 Prepaid expenses and other current assets..............................                 1,228            1,059
 Deferred income taxes..................................................                   550              550
                                                                                 -------------   --------------
   Total current assets.................................................                16,385           17,718
                                                                                 -------------   --------------
Property and equipment, net.............................................                 2,224            2,092
Goodwill, net of accumulated amortization...............................                   101              116
                                                                                 -------------   --------------
   Total assets.........................................................               $18,710          $19,926
                                                                                 =============   ==============
Liabilities and Stockholders' Equity
Current Liabilities:
 Accounts payable.......................................................               $ 1,102          $ 1,373
 Accrued liabilities....................................................                 4,338            4,121
 Current portion of long-term debt......................................                     5                5
 Current portion of obligations under capital leases....................                   123              127
 Income taxes payable...................................................                    --              295
 Deferred revenue.......................................................                10,533           11,646
                                                                                 -------------   --------------
   Total current liabilities............................................                16,101           17,567
                                                                                 -------------   --------------

Long-term debt, less current portion....................................                     2                2
Capital lease obligations, less current portion.........................                    55               85
                                                                                 -------------   --------------
   Total liabilities....................................................                16,158           17,654
                                                                                 -------------   --------------

Stockholders' equity:
 Series A convertible preferred stock; $.01 par value;..................                     5                5
  473,757 shares authorized, issued, and outstanding,
  total liquidation preference of $2,400
 Series B convertible preferred stock; $.01 par value;..................                     9                9
  1,777,500 shares authorized, 875,000 issued and outstanding,
  total liquidation preference of $3,5000
 Common stock, $.01 par value, 10,000,000 shares authorized,............                    45               45
  4,527,387 and 4,502,867 shares issued and outstanding
 Additional paid-in capital.............................................                 6,612            6,452
 Accumulated other comprehensive income:
  Cumulative translation adjustment.....................................                    81               47
  Unrealized holding loss on securities.................................                  (149)            (181)
 Deferred compensation..................................................                  (453)            (322)
 Accumulated deficit....................................................                (3,598)          (3,783)
                                                                                 -------------   --------------
   Total stockholders' equity...........................................                 2,552            2,272
                                                                                 -------------   --------------
   Total liabilities and stockholders' equity...........................               $18,710          $19,926
                                                                                 =============   ==============
See accompanying notes to consolidated financial statements

                                      -3-
SHOWCASE CORPORATION AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                  (Unaudited)
                                (in thousands)
Three Months Ended
                                                                               June 30,
                                                                          ------------------
                                                                            1999      1998
                                                                          -------    -------
Cash flows from operating activities:
 Net income (loss)....................................................    $   185    $ (833)
 Adjustments to reconcile net income (loss)
  to cash provided by (used in) operating activities:
   Depreciation and amortization......................................        197       205
   Provision for returns and doubtful accounts, net of returns
     and writeoffs....................................................        (90)       45
   Deferred compensation amortization.................................         21        --
   Changes in operating assets and liabilities, net of effect
     of foreign exchange rate changes:
      Accounts receivable.............................................       (189)    1,571
      Prepaid expenses................................................       (169)       61
      Income taxes receivable.........................................         --       (45)
      Accounts payable................................................       (271)     (328)
      Accrued liabilities.............................................        217        29
      Deferred revenue................................................     (1,113)      219
      Income taxes payable............................................       (295)       40
                                                                          -------    ------
          Net cash provided by (used in) operating activities.........     (1,507)      964
                                                                          -------    ------

Cash flows from investing activities:
 Purchase of property and equipment...................................       (280)     (248)
 Proceeds from affiliates.............................................         --        12
                                                                          -------    ------
        Net cash used in investing activities.........................       (280)     (236)
                                                                          -------    ------

Cash flows from financing activities:
 Proceeds from exercise of stock options..............................          8        95
 Payments on long-term debt...........................................         --       (94)
 Payments of capitalized lease obligations............................        (34)      (42)
                                                                          -------    ------
        Net cash used in financing activities.........................        (26)      (41)
                                                                          -------    ------
Net increase (decrease) in cash.......................................     (1,813)      687
Cash, beginning of year...............................................      8,900     5,404
                                                                          -------    ------
Cash, end of year.....................................................    $ 7,087    $6,091
                                                                          =======    ======
Supplemental disclosure of cash flow information:
 Cash paid during the three months for interest.......................    $     7    $   53
                                                                          =======    ======

 Cash paid during the three months for income taxes...................    $   549    $   49
                                                                          =======    ======
See accompanying notes to consolidated financial statements.

                                      -4-
SHOWCASE CORPORATION AND SUBSIDIARIES
                  Notes to Consolidated Financial Statements

(1)  Basis of Presentation

     The unaudited interim consolidated financial statements include the
     accounts of ShowCase Corporation and its wholly owned subsidiaries
     (collectively, the "Company") and have been prepared by the Company in
     accordance with generally accepted accounting principles, pursuant to the
     rules and regulations of the Securities and Exchange Commission.
     Accordingly, certain information and footnote disclosures normally included
     in the financial statements have been omitted or condensed pursuant to such
     rules and regulations.  The information furnished reflects, in the opinion
     of the management of the Company, all adjustments, consisting primarily of
     recurring accruals, considered necessary for a fair presentation of the
     financial position and the results of operations.

     The Company adopted the provisions of Statement of Position ("SOP") No. 98-
     1, Accounting for the Costs of Computer Software Developed or Obtained for
     Internal Use; SOP No. 98-5, Reporting on the Costs of Start-Up Activities,
     and SOP No. 98-9, Modification of SOP 97-2, Software Revenue Recognition,
     with Respect to Certain Transactions, effective April 1, 1999.  The
     adoption of these pronouncements did not have a material effect on the
     Company's operating results.

(2)  Net Income (Loss) per Share

     Basic income (loss) per share represents net income (loss) divided by the
     weighted average number of common shares outstanding during the period.
     Diluted income (loss) per share represents net income (loss) divided by the
     sum of the weighted average number of common shares outstanding plus shares
     derived from other potentially dilutive securities.  Potentially dilutive
     securities include "in-the-money" fixed stock options and warrants and the
     amount of weighted average common shares which would be added by the
     conversion of outstanding convertible preferred stock.  The number of
     shares added for stock options and warrants is determined by the treasury
     stock method, which assumes exercise of these options and warrants and the
     use of any proceeds from such exercise to repurchase a portion of these
     shares at the average market price for the period.  When the results of
     operations are a loss, other potentially dilutive securities are not
     included in the calculation of loss per share.

     For the three months ended June 30, 1998, basic loss per share is the same
     as diluted loss per share because the effect of the inclusion of other
     potentially dilutive securities in the calculation of diluted loss per
     share was antidilutive.

     The number of option shares excluded from the calculation of potentially
     dilutive securities because either the exercise price exceeded the average
     market price or their inclusion in a calculation of net loss per share
     would have been antidilutive was 758,612 for the three months ended June
     30, 1998. The effect of conversion of the Company's convertible preferred
     stock was also excluded from the calculation of net loss per diluted share
     because the resulting impact would also have been antidilutive for the
     three months ended June 30, 1998.  At June 30, 1998, the Series A and
     Series B convertible preferred stock were convertible into 1,895,028 and
     864,198 common shares, respectively.

(3)  Deferred Compensation

     During the three months ended June 30, 1999, the Company granted to
     employees options to purchase 81,000 shares of common stock.  The Company
     recorded deferred compensation of approximately $153,000, representing the
     difference between the deemed value of the common stock

                                      -5-
SHOWCASE CORPORATION AND SUBSIDIARIES
           Notes to Consolidated Financial Statements - (Continued)

     for accounting purposes and the option exercise price of such options on
     the date of grant. The Company accounts for these stock options in
     accordance with APB Opinion No. 25, Accounting for Stock Issued to
     Employees, and will recognize the deferred compensation cost over the five
     year vesting period of options granted.

(4)  Initial Public Offering, Increase in Number of Shares of Common Stock
     Authorized and Conversion of Preferred Stock

     On June 29, 1999, the Company's registration statement for its initial
     public offering of 3,000,000 shares of common stock at $9.00 per share was
     declared effective by the Securities and Exchange Commission.  The closing
     of the sale of such shares occurred on July 6, 1999 at which time the
     3,000,000 common shares were issued and proceeds, net of the underwriting
     discount, of $25,110,000 were received.

     On July 6, 1999, the Company increased the number of shares of authorized
     common stock to 50,000,000. Also, on July 6, 1999, the outstanding shares
     of the Company's Series A and Series B convertible preferred stock were
     converted into 1,895,028 and 864,198 shares of common stock, respectively.

                                      -6-
Item 2. Management's Discussion and Analysis of Financial Condition and Results
        of Operations

     All statements, trend analysis and other information contained in the
following discussion relative to markets for our products and trends in
revenues, gross margins and anticipated expense levels, as well as other
statements including words such as "anticipate," "believe," "plan," "estimate,"
"expect," "intend" and other similar expressions constitute forward-looking
statements. These forward-looking statements are subject to business and
economic risks and uncertainties, including but not limited to those described
in Exhibit 99.1 to this Quarterly Report on Form 10-Q (this "Report"), as well
as those discussed in our Registration Statement on Form S-1 (File No. 333-
77223) (the "Registration Statement"). Our actual results of operations may
differ materially from those contained in the forward-looking statements. All
forward-looking statements included in this Report are based on information
available to us on the date of this Report, and we assume no obligation to
update these forward-looking statements, or to update the reasons why actual
results could differ from those projected in these forward-looking statements.

Overview

     We are the leading provider of fully integrated, end-to-end, business
intelligence solutions for IBM AS/400 customers. Our ShowCase STRATEGY(R)
product suite and related services are designed to enable organizations to
rapidly implement business intelligence solutions that create increased value
from their operational and customer data. The sophisticated data warehousing and
management capabilities of our product suite provides our clients with highly
scalable and tightly integrated solutions. Our products enable enterprise-wide
distribution of information and allow end-user access and analysis through
familiar applications and Internet browsers. We have eight years of experience
delivering business intelligence solutions. Our ShowCase STRATEGY product suite,
introduced in 1996, supports ad hoc information access, enterprise reporting and
analytics.

     We were incorporated in 1988, and in 1991, introduced the first Windows-
based query tool for the IBM AS/400, ShowCase VISTA. During the next four years,
we continued to broaden our family of data access products, expand our
comprehensive service and support programs, grow our telesales and indirect
sales channels and invest in marketing and administrative functions. To support
the introduction of the ShowCase STRATEGY product suite in 1996, we created a
direct field sales force and increased our global distribution presence. Our
revenues increased to $10.5 million for the three months ended June 30, 1999
from $7.3 million for the three months ended June 30, 1998. Although our
revenues have increased significantly in recent periods, this growth may not
continue. We intend to continue to invest significant resources in the
development of our product suite, sales and marketing and general and
administrative functions.

     Our revenues come from three principal sources: license fees, maintenance
and support and professional service fees. We adopted the provisions of
Statement of Position ("SOP") No. 97-2, Software Revenue Recognition, as amended
by SOP No. 98-4, Deferral of the Effective Date of Certain Provisions of SOP No.
97-2, effective April 1, 1998, and SOP No. 98-9, Modification of SOP No. 97-2,
Software Revenue Recognition, with Respect to Certain Transactions, effective
April 1, 1999. Under SOP No. 97-2, we recognize license revenue when the
software product has been delivered, if a signed contract exists, the fee is
fixed and determinable, collection of resulting receivables is probable and
product returns are reasonably estimable. License fee revenues that are
contingent upon sale to an end user by distributors and other distribution
partners are recognized upon receipt of a report of delivery to the end user.
Maintenance and support fees committed as part of new product license sales and
maintenance resulting from renewed maintenance contracts are deferred and
recognized ratably over the contract period. Professional service revenue is
recognized when services are performed.

                                      -7-
We sell our products through a direct sales force and through indirect
distribution channels. Direct sales are made by our telesales organization and
direct field sales force in North American and by wholly-owned subsidiaries in
Germany, France, the United Kingdom and Belgium, including its branch office in
the Netherlands. Our distribution partners include IBM, software application
vendors, resellers and distributors located in the United States, Italy,
Switzerland, Mexico, Japan, Australia, Singapore, Hong Kong, Thailand and South
Korea. Sales through indirect channels accounted for approximately 17.8% and
21.1% of license fee revenues for the three months ended June 30, 1999 and 1998,
respectively.

     Revenues from clients outside North America represented 31.3% and 46.5% of
total revenue for the three months ended June 30, 1999 and 1998, respectively.
A majority of these sales was derived from European sales.  We intend to
continue to expand our international operations and have committed, and will
continue to commit, significant management time and financial resources to
developing direct and indirect international sales channels.

Results of Operations For the Three Months Ended June 30, 1999 and 1998

     The following table sets forth certain statement of operations data as a
percentage of total revenues for the periods indicated.
THREE MONTHS ENDED JUNE 30,
                                            ----------------------------
                                                1999           1998
                                            ------------   -------------
As a Percentage of Total Revenues:
Revenues:
 License fees............................           57.7%           57.9%
 Maintenance and support.................           30.5            29.6
 Professional service fees...............           11.7            12.5
                                            ------------   -------------
   Total revenues........................          100.0           100.0

Cost of revenues:
 License fees............................           10.2            11.2
 Maintenance and support.................            7.8             7.7
 Professional service fees...............            9.8             8.4
                                            ------------   -------------
   Total cost of revenues................           27.8            27.3
                                            ------------   -------------
Gross margin.............................           72.2            72.7

Operating expenses:
 Sales and marketing.....................           50.2            60.1
 Product development.....................           11.1            13.4
 General and administrative..............            9.0            10.1
                                            ------------   -------------
   Total operating expenses..............           70.2            83.6
                                            ------------   -------------
Operating income (loss)..................            1.9           (10.9)
Other income (expense), net..............            0.9             0.1
                                            ------------   -------------
Net income (loss) before income taxes....            2.9           (10.9)
Income taxes.............................            1.1             0.5
                                            ------------   -------------
Net income (loss)                                    1.8%          (11.4)%
                                            ============   =============
-8-
Revenues

     Total revenues. Total revenues increased to $10.5 million for the three
months ended June 30, 1999 from $7.3 million for the three months ended June 30,
1998, representing an increase of 43.9%.

     License fees. License fee revenues increased to $6.1 million for the three
months ended June 30, 1999 from $4.2 million for the three months ended June 30,
1998, representing an increase of 43.6%. License fee revenues as a percentage of
total revenues were 57.7% and 57.9% for the three months ended June 30, 1999 and
1998, respectively. This increase in license fee revenues is largely
attributable to an increase in the number of licenses sold by our expanded
direct field sales force.

     Maintenance and support. Maintenance and support revenues increased to $3.2
million for the three months ended June 30, 1999 from $2.2 million for the three
months ended June 30, 1998, representing and increase of 48.4%. Maintenance and
support revenues as a percentage of total revenues were 30.5% and 29.6% for the
three months ended June 30, 1999 and 1998, respectively. This increase in
maintenance and support revenues was largely a result of the renewal of
maintenance and support contracts, as well as new maintenance and support
contracts associated with new product licenses.

     Professional service fees. Professional service fee revenues increased to
$1.2 million for the three months ended June 30, 1999 from $0.9 million for the
three months ended June 30, 1998, representing an increase of 35.2%.
Professional service revenues as a percentage of total revenues were 11.7% and
12.5% for the three months ended June 30, 1999 and 1998, respectively. This
increase in professional service revenues was largely a result of the services
revenues associated with the sale of new product licenses.

Costs of Revenues

     Cost of license fees. Cost of license fees consists primarily of the costs
of product manuals, media, packaging, shipping and royalties paid to third
parties. Cost of license fees increased to $1.1 million for the three months
ended June 30, 1999 from $0.8 million for the three months ended June 30, 1998,
representing 17.6% and 19.3% of total license fees for such periods,
respectively. The increase in cost of license fees in dollar amount was
primarily attributable to the increase in the percentage of revenues from our
Essbase/400 product, for which we pay royalties. Revenues from our Essbase/400
product represented 43.6% and 40.6% of our total license fee revenues for the
three months ended June 30, 1999 and 1998, respectively. We anticipate that cost
of license fees will increase in dollar amount in future periods as license fee
revenues increase. Cost of license fees as a percentage of total license fees
may increase if we enter into additional royalty arrangements or if sales of
Essbase/400 or other products which carry a royalty obligation increase as a
percentage of total license revenues.

     Cost of maintenance and support. Cost of maintenance and support revenues
consists primarily of personnel costs associated with providing maintenance and
support services, particularly with respect to Essbase/400. Cost of maintenance
and support revenues increased to $0.8 million for the three months ended June
30, 1999 from $0.6 million for the three months ended June 30, 1998,
representing 25.7% and 26.1% of total maintenance and support revenues for such
periods, respectively. The increase in cost of maintenance and support revenues
in dollar amount was primarily due to the hiring of additional personnel. We
anticipate that cost of maintenance and support will increase in dollar amount
in future periods as maintenance and support revenues increase.

                                      -9-
Cost of professional service fees. Cost of professional service fees
consists primarily of the costs of providing training and consulting services.
Cost of professional service fees increased to $1.0 million for the three months
ended June 30, 1999 from $0.6 million for the three months ended June 30, 1998,
representing 83.6% and 67.1% of professional service fees for such periods,
respectively. This increase in cost of professional service fees was primarily
due to the expansion of our professional services staff. We anticipate that cost
of professional service fees will increase in dollar amount in future periods as
professional service fee revenues increase.

Operating Expenses

     Sales and marketing. Sales and marketing expenses consist primarily of
salaries, benefits, bonuses, commissions and travel and promotional expenses.
Sales and marketing expenses increased to $5.3 million for the three months
ended June 30, 1999 from $4.4 million for the three months ended June 30, 1998,
representing 50.2% and 60.1% of total revenues for such periods, respectively.
The increase in sales and marketing expenses in dollar amount reflected the
hiring of additional sales and marketing personnel and expanded promotional
activities. We anticipate that sales and marketing expenses will increase in
dollar amount in future periods.

     Product development. Product development expenses consist primarily of
development personnel compensation and related costs associated with the
development of new products, the enhancement of existing products, quality
assurance and testing. Product development expenses increased to $1.2 million
for the three months ended June 30, 1999 from $1.0 million for the three months
ended June 30, 1998, representing 11.1% and 13.4% of total revenues for such
periods, respectively. This increase in dollar amount was due to expenses
associated with the development of new products and the hiring of additional
personnel. Product development expenses decreased as a percentage of total
revenues primarily due to faster revenue growth. We anticipate that we will
continue to devote substantial resources to product development efforts and that
product development expenses will increase in dollar amount in future periods.
To date, all product development costs have been expensed as incurred.

     General and administrative. General and administrative expenses consist
primarily of salaries of executive, financial, human resources and information
services personnel as well as outside professional fees. General and
administrative expenses increased to $0.9 million for the three months ended
June 30, 1999 from $0.7 million for the three months ended June 30, 1998,
representing 9.0% and 10.1% of total revenues for such periods, respectively.
This increase in dollar amount was primarily due to increased staffing and
related expenses necessary to manage and support the expansion of operations.
General and administrative expenses decreased as a percentage of total revenues
primarily due to faster revenue growth. We anticipate that general and
administrative expenses will increase in dollar amount in the future as a result
of increased personnel and infrastructure costs necessary to support the
expansion of operations as well as the increased expenses associated with being
a public company.

Other Income

     Other income for the periods ended June 30, 1999 and 1998 consisted
primarily of interest income and interest expenses. Other income increased to
$98,000 for the three months ended June 30, 1999 from $6,000 for the three
months ended June 30, 1998.

                                      -10-
Provision (Benefit) for Income Taxes

     Income taxes increased to $115,000 for the three months ended June 30, 1999
from $40,000 for the three months ended June 30, 1998, primarily due to higher
income from operations.

Liquidity and Capital Resources

     Historically, we have funded operations primarily through cash provided by
operations, the sale of equity securities and bank borrowings. Operating
activities used cash of $1.5 million for the three months ended June 30, 1999
and provided cash of $1.0 million for the three months ended June 30, 1998. This
decrease in cash from operating activities was due primarily to a decrease in
deferred revenue offset by improved results of operations.

     Investing activities used cash of $280,000 and $236,000 for the three
months ended June 30, 1999 and 1998, respectively. The principal use of cash in
investing activities was for capital expenditures related to the acquisition of
computer equipment and furniture required to support the expansion of our
operations.

     Financing activities used cash of $26,000 and $41,000 in the three months
ended June 30, 1999 and 1998, respectively. For the three months ended June 30,
1999, cash used by financing activities consisted primarily of payments on
capitalized lease obligations. For the three months ended June 30, 1998, cash
used by financing activities consisted primarily of long-term debt repayment,
payments under capitalized lease obligations and the receipt of proceeds from
the exercise of stock options.

     Our sources of liquidity at June 30, 1999 consisted principally of cash and
marketable securities of $7.3 million. We believe that cash generated from
operations, existing cash and marketable securities, and proceeds, net of the
underwriting discount, of $25.1 million received on July 6, 1999 from our
initial public offering (the "IPO") will be sufficient to fund operations for at
least the next twelve months.

Year 2000

     Many currently installed computer systems and software products store dates
using two digits of the calendar year. These date code fields will need to
accept four-digit entries to distinguish 21st century dates from 20th century
dates. This problem could result in system failures or miscalculations causing
disruptions of business operations, including, among other things, a temporary
inability to process transactions, send invoices or engage in other similar
business activities. As a result, many companies' computer systems and software
will need to be upgraded or replaced in order to comply with Year 2000
requirements. The potential global impact of the Year 2000 problem is not known.
If Year 2000 problems are not corrected in a timely manner, they could affect us
and the U.S. and world economies generally.

     Even though our current products are Year 2000 compliant, we may lose
potential sales because companies may be diverting resources to assess and fix
their internal systems that may not be Year 2000 compliant.

     We have formed a project team to address internal Year 2000 issues. Our
internal financial, manufacturing and other computer systems are being reviewed
to assess and remediate Year 2000 problems. Our assessment of internal systems
includes our information technology, or IT, systems as well as other systems
which include embedded technology in equipment containing microprocessors or
other similar circuitry. Our Year 2000 compliance program includes the following
phases:

                                      -11-
.    identifying systems that need to be modified or replaced;

     .    carrying out remediation work to modify existing systems or convert to
          new systems; and

     .    conducting validation testing of systems and applications to ensure
          compliance.

     The amount of remediation work required to address Year 2000 problems is
not expected to be extensive. We have replaced certain of our operational
systems and most of our personal computers in the last several years. We believe
that new equipment and software, including new accounting software to be
installed in 1999, substantially addresses Year 2000 issues. However, we will be
required to modify some of our existing hardware and software in order for our
computer systems to function properly in the year 2000 and thereafter. We
estimate that we will complete our Year 2000 compliance program for all of our
significant internal systems no later than September 30, 1999, at an estimated
cost of $65,000, of which amount we estimate that we have spent approximately
$25,000 to date. There can be no assurance that the estimates are correct or
that actual costs will not be materially greater than anticipated.

     In addition, by September 30, 1999, we plan to survey our major suppliers
and evaluate their plans to address potential Year 2000 issues. We will rely
primarily on our suppliers' commitments to accomplish this task although we have
no contractual commitments from these suppliers regarding Year 2000 issues. It
is impossible to fully assess the potential consequences in the event
interruptions from suppliers occur or in the event that there are disruptions in
infrastructure areas as utilities, communications, transportation, banking or
government. Although we have not surveyed our current clients regarding Year
2000 compliance, we are unaware of any reason why a Year 2000 problem
experienced by these clients would have a significant adverse effect on our
operating results.

     Based on assessments to date, we believe we will not experience any
material disruptions as a result of Year 2000 problems in internal processes,
information processing, interfaces with major clients or with processing orders
and billing. However, if suppliers or other third-party providers, such as those
providing electricity, water or telephone services, experience difficulties in
providing products or services to us because of their Year 2000 problems, we
believe that the most reasonably likely worst case scenario would be that our
ability to timely ship our products to our clients would be disrupted. This
could result in the loss of current or potential clients which could seriously
harm our business and operating results. In addition, if our IT systems are not
Year 2000 compliant, we would have to devote significant resources to correct
such problems, and we may be unable to process client orders, which could lead
to shipment delays. We have not yet developed a contingency plan to address
these potential issues, but we will assess the need to develop such a plan based
on the outcome of our Year 2000 review. Assuming no major disruption in service
from suppliers or other third-parties, we believe that we will be able to manage
our total Year 2000 transition without any substantial harm to our business and
operating results.

New Accounting Pronouncements

     In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative
Instruments and Hedging Activities. SFAS No. 133 established methods of
accounting for derivative financial instruments and hedging activities related
to those instruments as well as other hedging activities. SFAS No. 133 will be
effective for us in April 2001. We are currently reviewing the potential impact
of this accounting standard.

                                      -12-
Item 3.  Quantitative and Qualitative Disclosure About Market Risks

     There have been no material changes in our market risk during the three
months ended June 30, 1999 from that set forth on page 25 of the Registration
Statement under the heading "Quantitative and Qualitative Disclosure About
Market Risks."

                          PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

     We are not a party to any material legal proceedings.

Item 2.  Changes in Securities and Use of Proceeds

     We issued and sold during the three months ended June 30, 1999 an aggregate
of 24,520 shares of our common stock to employees upon exercise of outstanding
stock options. The net aggregate consideration received for such shares was
approximately $8,000. The sale and issuance of these securities was deemed to be
exempt from registration under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance on Section 4(2) of the Securities Act as
transactions by an issuer not involving a public offering, where the purchasers
represented their intention to acquire securities for investment purposes only
and not with a view to or for sale in connection with any distribution thereof,
and received or had access to adequate information about us, or Rule 701
promulgated thereunder in that they were offered and sold either pursuant to
written compensatory benefit plans or pursuant to a written contract relating to
employment.

     Our registration statement, filed on Form S-1 under the Securities Act
(File No. 333-77223), for the IPO became effective June 29, 1999. The closing of
the sale of shares pursuant to the IPO occurred on July 6, 1999, at which time
we issued 3,000,000 shares of our common stock for an aggregate offering price
of $27.0 million. The managing underwriters for the IPO were Merrill Lynch,
Pierce, Fenner & Smith, U.S. Bancorp Piper Jaffray, Dain Rauscher Wessels and
FAC/Equities. Concurrent with the IPO, our outstanding shares of convertible
preferred stock were automatically converted into shares of common stock.

     We received net proceeds from the IPO of approximately $24.4 million after
deducting total estimated expenses of approximately $2.6 million, which included
the underwriting discount of approximately $1.9 million and other estimated
offering expenses of approximately $700,000. We expect to use the net offering
proceeds for general corporate purposes, including the expansion of our direct
sales force, product development and working capital. A portion of the proceeds
may also be used to acquire businesses, products or technologies that are
complementary to ours. There are no current agreements with respect to any
material acquisitions.

Item 3.  Defaults Upon Senior Securities

     None.

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

     On April 21, 1999, we submitted the following matters to our shareholders
at a special meeting:

     1.   The shareholders approved and adopted an amendment to our Articles of
          Incorporation filed prior to the IPO  to lower the minimum price per
          share requirement for mandatory conversion of our Series A convertible
          preferred stock, with the following vote:

               FOR:  7,033,614          AGAINST:  7,500      ABSTENTIONS:  1,200

     2.   The shareholders approved and adopted an amendment to our Articles of
          Incorporation filed prior to the IPO to lower the minimum price per
          share requirement for mandatory conversion of our Series B convertible
          preferred stock, with the following vote:

               FOR:  7,032,954          AGAINST:  7,500      ABSTENTIONS:  1,860

     3.   The shareholders approved and adopted an amendment and restatement of
          our Articles of Incorporation filed following the closing of the IPO,
          which, among other things, increased the number of authorized shares
          of our capital stock, with the following vote:

               FOR:  7,025,514          AGAINST: 14,940      ABSTENTIONS:  1,860

     4.   The shareholders approved an amendment and restatement of our Bylaws,
          which, among other things, created a staggered board of directors,
          with the following vote:

               FOR:  7,024,104          AGAINST:  14,940     ABSTENTIONS: 3,270

     5.   The shareholders approved our 1999 Stock Incentive Plan, with the
          following vote:

               FOR:  7,039,614          AGAINST:  0          ABSTENTIONS: 2,700

     6.   The shareholders approved our 1999 Employee Stock Purchase Plan, with
          the following vote:

               FOR:  7,032,614          AGAINST:  7,500      ABSTENTIONS: 2,200

     7.   The shareholders approved the classification of our directors, with
          the following vote:

               FOR:  7,024,104          AGAINST:  7,500      ABSTENTIONS: 10,710

Item 5.  Other Information

     None.

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

     (a)  Exhibits:

          27.1 -- Financial Data Schedule
          99.1 -- Factors That May Affect Future Operating Results

     (b)  Reports on Form 8-K:

          The Company did not file any Current Report on Form 8-K during the
          quarter ended June 30, 1999.

                                      -15-
SIGNATURES

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

                                         SHOWCASE CORPORATION

Date:  August 13, 1999                   By:  /s/ Craig W. Allen
                                              ----------------------------------
                                              Craig W. Allen
                                              Chief Financial Officer
                                              (Duly authorized officer and
                                              principal financial and accounting
                                              officer)
EXHIBIT INDEX
                                 -------------

                                                                            Page
                                                                            ----

27.1 Financial Data Schedule
99.1 Factors That May Affect Future Operating Results