EX-99.1 2 e17932ex99_1.txt PRESS RELEASE Exhibit 99.1 NEWS RELEASE COMPUWARE CORPORATION COMPUWARE [LOGO] --------------------------------------------- Corporate Headquarters ONE CAMPUS MARTIUS o DETROIT, MICHIGAN 48226 (313) 227-7300 For Immediate Release May 12, 2004 Compuware Corporation Earnings Increase 50 Percent in Fourth Quarter DETROIT--May 12, 2004--Compuware Corporation (NASDAQ: CPWR) today announced financial results for its fourth quarter and fiscal year ended March 31, 2004. "These great results confirm that Compuware is in an outstanding position to achieve healthy, sustainable growth," said Compuware Chairman and CEO Peter Karmanos, Jr. "Compuware's development, quality assurance and performance management solutions address the most pressing technical and business issues in the marketplace--and they do so in all of the environments most used by businesses today. Combined with our skilled services staff and integrated through Compuware IT Governance by Changepoint, Compuware's solutions deliver unmatched IT value. Looking forward, we are convinced that the addition of Changepoint to our IT solutions portfolio will dramatically enhance our business prospects, allowing us to demonstrate directly to CIOs the unique, unrivaled results we can deliver to their organizations." Fourth Quarter Fiscal 2004 Results Compuware reports fourth quarter revenues of $337.7 million. Net income in the quarter was $33.9 million, compared to $21.4 million in the fourth quarter last year. Earnings per share (diluted computation) were 9 cents, compared to 6 cents in the same quarter last year, based upon 387.2 million and 379.2 million shares outstanding, respectively. During the company's fourth quarter, software license fees were $101.3 million, up more than 30 percent over the fourth quarter last year. Maintenance fees were $104.3 million, up 1.2 percent from the same quarter last year. Revenue from professional services was $132.2 million. Fiscal Year 2004 Results During the fiscal year ended March 31, 2004, revenues were $1.26 billion. Net income was $49.8 million for fiscal 2004. Earnings per share (diluted computation) were 13 cents, based upon 384.6 million shares outstanding. During the year, software license fees were $296.6 million, and maintenance revenue was $408.2 million. Professional services fees for fiscal year 2004 were $559.8 million. -MORE- Compuware Corporation Earnings Increase 50 Percent in Fourth Quarter May 12, 2004 Fourth Quarter Fiscal Year 2004 Highlights During the fourth quarter, Compuware: o Announced the acquisition of the products and technology of Covisint, LLC, the company whose solutions connect the global automotive industry. o Released version 3.1 of its popular OptimalJ development platform, which includes industry-leading support for Web Services security, a broader set of options for Compuware OptimalJ's integrated testing environment--including testing support for BEA WebLogic Server and IBM WebSphere Application Server--and enhanced features for legacy integration. o Together with ComponentSource, the world's largest marketplace and community for reusable software components and a Software Reuse Infrastructure Provider, announced a global distribution agreement. Through this agreement Compuware will provide tools that increase developer productivity and application quality to ComponentSource's more than 600,000 J2EE and .NET customers. o Announced an independent research report conducted by The Middleware Company that revealed that model-driven, pattern-based development delivers productivity gains approaching 70 percent in the maintenance phase of the application life cycle. o Announced the general availability of Compuware DriverStudio 3.1, a suite of tools that accelerates the driver development life cycle and promotes the development of high-quality Windows device drivers. This product helps device driver developers write, debug, test and tune high-quality driver code that meet the strict quality standards for Windows Hardware Quality Labs certification to ensure device driver quality. o Announced the results of a study commissioned by Compuware and conducted by Forrester Consulting that surveyed 430 senior IT executives from large companies in the U.S. and Europe, focusing on how IT organizations approach performance management of their critical business applications. The study revealed that many IT organizations are reactive in solving performance problems. o Announced that its Testing and Integration Center (TIC) underwent an assessment against the Capability Maturity Model for Software and was rated at CMM Level 3. The TIC is Compuware's internal quality assurance organization, responsible for testing the integration between Compuware products and product families, as well as demonstrating how Compuware's products are used in a production environment. o Announced that Compuware DevPartner and Compuware OptimalJ were recognized and honored in SYS-CON Media's 2003 Readers' choice Awards--.NET Developer's Journal and Java Developer's Journal--for their contributions to the .NET and Java developer communities. o Announced that Micro-News Network, an emergency notification applications company, used Compuware OptimalJ to develop its flagship emergency alert application, SNAP(TM)-Com EL, with a development time that was ten times faster than expected. o Announced that for the second consecutive year, DevPartner Studio 7.1 Professional Edition won a Software Development Productivity Award in the "Utilities" category. o Announced that Enlighten, an award-winning interactive design, development and consulting firm, selected Compuware OptimalJ to help its developers reduce J2EE application development time by automatically generating much of the code for a Hunter Douglas web application project. -MORE- Compuware Corporation Earnings Increase 50 Percent in Fourth Quarter May 12, 2004 Compuware Corporation Compuware Corporation (NASDAQ: CPWR) is a world leader in delivering software and services that enable businesses to manage their enterprises and maximize the value of their IT assets. Compuware solutions accelerate the development, improve the quality and enhance the performance of business-driving applications. Founded in 1973, Compuware serves the world's leading IT organizations, including more than 90 percent of the Fortune 100 companies. Learn more about Compuware at http://www.compuware.com/. ### Press Contact: Lisa Elkin, Vice President, Communications and Investor Relations, 313-227-7345, lisa.elkin@compuware.com Certain statements in this release that are not historical facts, including those regarding the Company's future plans, objectives and expected performance, are "forward-looking statements" within the meaning of the federal securities laws. These forward-looking statements represent our outlook only as of the date of this release. While we believe any forward-looking statements we have made are reasonable, actual results could differ materially since the statements are based on our current expectations, including expectations about Changepoint, and are subject to risks and uncertainties. Risks and uncertainties about the Company are discussed in the Company's reports filed with the Securities and Exchange Commission. You should refer to and consider these factors when relying on such forward-looking information. The Company does not undertake, and expressly disclaims any obligation, to update or alter its forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. COMPUWARE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In Thousands) AS OF MARCH 31, ------------------------- ASSETS 2004 2003 ---------- ---------- CURRENT ASSETS: Cash and cash equivalents $ 454,916 $ 319,466 Investments 149,654 156,737 Accounts receivable, net 452,057 515,819 Deferred tax asset, net 32,460 30,605 Income taxes refundable, net 33,946 10,853 Prepaid expenses and other current assets 19,976 16,951 ---------- ---------- Total current assets 1,143,009 1,050,431 ---------- ---------- INVESTMENTS 162,484 95,095 ---------- ---------- PROPERTY AND EQUIPMENT, LESS ACCUMULATED DEPRECIATION AND AMORTIZATION 444,401 386,678 ---------- ---------- CAPITALIZED SOFTWARE, LESS ACCUMULATED AMORTIZATION 45,489 54,514 ---------- ---------- OTHER: Accounts receivable 198,742 260,735 Deferred tax asset, net 20,174 Goodwill, net 213,359 212,288 Other 26,597 42,770 ---------- ---------- Total other assets 438,698 535,967 ---------- ---------- TOTAL ASSETS $2,234,081 $2,122,685 ========== ========== LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 35,298 $ 37,588 Accrued expenses 154,962 134,579 Deferred revenue 302,804 296,998 ---------- ---------- Total current liabilities 493,064 469,165 DEFERRED REVENUE 300,664 299,079 ACCRUED EXPENSES 22,073 22,750 DEFERRED TAX LIABILITY, NET 4,689 ---------- ---------- Total liabilities 820,490 790,994 ---------- ---------- SHAREHOLDERS' EQUITY: Common stock 3,853 3,824 Additional paid-in capital 722,206 704,190 Retained earnings 681,115 631,906 Foreign currency translation adjustment 6,417 (8,229) ---------- ---------- Total shareholders' equity 1,413,591 1,331,691 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,234,081 $2,122,685 ========== ========== COMPUWARE CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In Thousands, Except Per Share Data)
QUARTER ENDED TWELVE MONTHS ENDED MARCH 31, MARCH 31, ------------------- ------------------------ 2004 2003 2004 2003 -------- -------- ---------- ---------- REVENUES: Software license fees $101,266 $ 77,787 $ 296,627 $ 295,720 Maintenance fees 104,278 103,086 408,191 412,176 Professional services fees 132,153 156,735 559,829 667,444 -------- -------- ---------- ---------- Total revenues 337,697 337,608 1,264,647 1,375,340 -------- -------- ---------- ---------- OPERATING EXPENSES: Cost of software license fees 8,251 7,660 31,579 30,740 Cost of professional services 113,807 146,743 513,621 611,644 Technology development and support 39,257 35,383 163,655 143,289 Sales and marketing 83,476 69,461 310,643 264,012 Administrative and general 51,723 52,126 209,797 191,131 -------- -------- ---------- ---------- Total operating expenses 296,514 311,373 1,229,295 1,240,816 -------- -------- ---------- ---------- INCOME FROM OPERATIONS 41,183 26,235 35,352 134,524 OTHER INCOME 5,930 6,156 20,665 21,691 -------- -------- ---------- ---------- INCOME BEFORE INCOME TAXES 47,113 32,391 56,017 156,215 INCOME TAX PROVISION 13,191 11,013 6,185 53,113 -------- -------- ---------- ---------- NET INCOME $ 33,922 $ 21,378 $ 49,832 $ 103,102 ======== ======== ========== ========== DILUTED EPS COMPUTATION Numerator: Net income $ 33,922 $ 21,378 $ 49,832 $ 103,102 -------- -------- ---------- ---------- Denominator: Weighted-average common shares outstanding 384,422 378,371 382,630 377,028 Dilutive effect of stock options 2,804 816 1,978 1,412 -------- -------- ---------- ---------- Total shares 387,226 379,187 384,608 378,440 -------- -------- ---------- ---------- Diluted EPS $ 0.09 $ 0.06 $ 0.13 $ 0.27 ======== ======== ========== ==========
COMPUWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (In Thousands)
TWELVE MONTHS ENDED MARCH 31, --------------------- 2004 2003 --------- --------- CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: Net income $ 49,832 $ 103,102 Adjustments to reconcile net income to cash provided by operations: Depreciation and amortization 55,175 53,808 Tax benefit from exercise of stock options 704 152 Issuance of common stock to ESOP 9,425 Acquisition tax benefits 6,579 7,056 Deferred income taxes 23,775 36,577 Other 3,774 6,212 Net change in assets and liabilities: Accounts receivable 163,479 182,502 Prepaid expenses and other current assets (1,404) (9) Other assets 4,887 776 Accounts payable and accrued expenses (1,289) (50,562) Deferred revenue (24,378) 4,464 Income taxes (23,014) 16,870 --------- --------- Net cash provided by operating activities 258,120 370,373 --------- --------- CASH FLOWS USED IN INVESTING ACTIVITIES: Purchase of: Property and equipment: Headquarters facility (65,240) (219,071) Other (9,358) (6,222) Capitalized software (11,287) (11,369) Business (6,939) Investments: Proceeds 356,713 201,938 Purchases (404,048) (267,502) --------- --------- Net cash used in investing activities (140,159) (302,226) --------- --------- CASH FLOWS PROVIDED BY FINANCING ACTIVITIES: Net proceeds from exercise of stock options 2,798 1,503 Contribution to stock purchase plans 8,293 9,563 Repurchase of common stock (996) --------- --------- Net cash provided by financing activities 10,095 11,066 --------- --------- EFFECT OF EXCHANGE RATE CHANGES ON CASH 7,394 6,948 --------- --------- NET INCREASE IN CASH AND CASH EQUIVALENTS 135,450 86,161 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 319,466 233,305 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 454,916 $ 319,466 ========= =========
Note: Certain amounts in prior periods have been reclassified to conform to the current presentation. COMPUWARE CORPORATION AND SUBSIDIARIES OPERATIONAL HIGHLIGHTS (dollar amounts in thousands)
QUARTER ENDED --------------------- QUARTER ENDED MARCH 31, MARCH 31, YR - YR DECEMBER 31, QTR - QTR 2004 2003 % Change 2003 % Change --------- --------- ------- ------------ --------- License Fees: Distributed Product License Fees DevPartner $ 7,056 $ 5,878 20.0% $ 6,901 2.2% QACenter and File-AID Client/Server 9,317 6,517 43.0% 6,173 50.9% UNIFACE and Optimal 6,056 6,575 (7.9%) 5,496 10.2% Vantage 13,614 7,643 78.1% 11,610 17.3% --------- --------- --------- Total Distributed Product License Fees 36,043 26,613 35.4% 30,180 19.4% Mainframe Product License Fees 65,223 51,174 27.5% 50,498 29.2% --------- --------- --------- Total License Fees 101,266 77,787 30.2% 80,678 25.5% Maintenance Fees 104,278 103,086 1.2% 102,940 1.3% --------- --------- --------- Total Products Revenue $ 205,544 $ 180,873 13.6% $ 183,618 11.9% ========= ========= ========= Total Mainframe Products Revenue $ 151,114 $ 138,242 9.3% $ 135,943 11.2% Total Distributed Products Revenue $ 54,430 $ 42,631 27.7% $ 47,675 14.2% Total Products Revenue by Geography North America $ 104,266 $ 98,926 5.4% $ 97,003 7.5% International $ 101,278 $ 81,947 23.6% $ 86,615 16.9% Product Releases Mainframe 5 26 (80.8%) 4 25.0% Distributed 14 19 (26.3%) 16 (12.5%) Total Costs of Software Products $ 130,984 $ 112,504 16.4% $ 132,042 (0.8%) Professional Services Professional Services Revenue $ 132,153 $ 156,735 (15.7%) $ 134,567 (1.8%) Contribution Margin 13.9% 6.4% 8.0% Billable Headcount 4,233 5,164 (18.0%) 4,707 (10.1%) Total Company Headcount 8,660 9,356 (7.4%) 9,097 (4.8%)