Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Jun. 30, 2014 | Aug. 05, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'COMPUWARE CORP | ' |
Entity Central Index Key | '0000859014 | ' |
Current Fiscal Year End Date | '--03-31 | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 220,139,809 |
Document Fiscal Year Focus | '2015 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 30-Jun-14 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS: | ' | ' |
Cash and cash equivalents | $275,514 | $300,059 |
Accounts receivable, net | 288,031 | 385,232 |
Deferred tax asset, net | 36,770 | 35,871 |
Income taxes refundable | 4,519 | 4,161 |
Prepaid expenses and other current assets | 27,629 | 27,231 |
Total current assets | 632,463 | 752,554 |
PROPERTY AND EQUIPMENT, LESS ACCUMULATED DEPRECIATION AND AMORTIZATION | 283,107 | 287,013 |
CAPITALIZED SOFTWARE AND OTHER INTANGIBLE ASSETS, NET | 96,868 | 98,762 |
ACCOUNTS RECEIVABLE | 165,010 | 168,875 |
GOODWILL | 647,445 | 648,546 |
DEFERRED TAX ASSET, NET | 16,582 | 16,514 |
OTHER ASSETS | 24,613 | 24,845 |
TOTAL ASSETS | 1,866,088 | 1,997,109 |
CURRENT LIABILITIES: | ' | ' |
Accounts payable | 14,133 | 14,251 |
Accrued expenses | 75,448 | 107,452 |
Income taxes payable | 16,249 | 33,093 |
Deferred revenue | 354,683 | 382,558 |
Total current liabilities | 460,513 | 537,354 |
DEFERRED REVENUE | 274,482 | 302,565 |
ACCRUED EXPENSES | 19,927 | 19,765 |
DEFERRED TAX LIABILITY, NET | 33,857 | 36,391 |
Total liabilities | 788,779 | 896,075 |
SHAREHOLDERS' EQUITY: | ' | ' |
Common stock | 2,200 | 2,193 |
Additional paid-in capital | 837,773 | 828,264 |
Retained earnings | 229,037 | 257,236 |
Accumulated other comprehensive loss | -7,648 | -6,915 |
Total Compuware shareholders' equity | 1,061,362 | 1,080,778 |
Non-controlling interest | 15,947 | 20,256 |
Total shareholders' equity | 1,077,309 | 1,101,034 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $1,866,088 | $1,997,109 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Per Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
REVENUES: | ' | ' |
Software license fees | $26,687 | $31,743 |
Maintenance fees | 88,460 | 87,162 |
Subscription fees | 19,362 | 20,132 |
Services fees | 8,414 | 7,671 |
Application services fees | 21,587 | 24,101 |
Total revenues | 164,510 | 170,809 |
OPERATING EXPENSES: | ' | ' |
Cost of software license fees | 4,995 | 4,929 |
Cost of maintenance fees | 6,922 | 7,339 |
Cost of subscription fees | 8,202 | 7,840 |
Cost of services | 6,732 | 6,642 |
Cost of application services | 30,902 | 24,261 |
Technology development and support | 19,952 | 23,691 |
Sales and marketing | 53,103 | 52,267 |
Administrative and general | 34,013 | 36,048 |
Restructuring costs | 2,975 | 4,803 |
Total operating expenses | 167,796 | 167,820 |
INCOME (LOSS) FROM CONTINUING OPERATIONS | -3,286 | 2,989 |
OTHER INCOME, NET | 223 | 202 |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAX BENEFIT | -3,063 | 3,191 |
INCOME TAX BENEFIT - CONTINUING OPERATIONS | -1,707 | -1,071 |
INCOME (LOSS) FROM CONTINUING OPERATIONS INCLUDING NON-CONTROLLING INTEREST | -1,356 | 4,262 |
INCOME FROM DISCONTINUED OPERATIONS, NET OF TAX | 0 | 5,705 |
NET INCOME (LOSS) INCLUDING NON-CONTROLLING INTEREST | -1,356 | 9,967 |
Less: Net income (loss) attributable to the non-controlling interest in Covisint Corporation | -1,408 | 0 |
NET INCOME ATTRIBUTABLE TO COMPUWARE CORPORATION | $52 | $9,967 |
Basic earnings per share | ' | ' |
Continuing operations (in dollars per share) | $0 | $0.02 |
Discontinued operations (in dollars per share) | $0 | $0.03 |
Net income attributable to Compuware Corporation common shareholders (in dollars per share) | $0 | $0.05 |
Diluted earnings per share | ' | ' |
Continuing operations (in dollars per share) | $0 | $0.02 |
Discontinued operations (in dollars per share) | $0 | $0.03 |
Net income attributable to Compuware Corporation common shareholders (in dollars per share) | $0 | $0.05 |
Dividends declared per common share (in dollars per share) | $0.13 | $0.13 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Condensed Consolidated Statements of Comprehensive Income (Unaudited) [Abstract] | ' | ' |
NET INCOME (LOSS) INCLUDING NON-CONTROLLING INTEREST | ($1,356) | $9,967 |
OTHER COMPREHENSIVE INCOME (LOSS), BEFORE TAX | ' | ' |
Foreign currency translation adjustments | -794 | 3,223 |
TAX ATTRIBUTES OF ITEMS IN OTHER COMPREHENSIVE INCOME (LOSS) | ' | ' |
Foreign currency translation adjustments | -61 | -257 |
OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX | -733 | 3,480 |
COMPREHENSIVE INCOME (LOSS) INCLUDING NON-CONTROLLING INTEREST | -2,089 | 13,447 |
Less: Net loss attributable to the non-controlling interest in Covisint Corp. | -1,408 | 0 |
Less: Other comprehensive income attributable to the non-controlling interest in Covisint Corp. | 1 | 0 |
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMPUWARE CORPORATION | ($682) | $13,447 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) (USD $) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Income Loss [Member] | Total Compuware Shareholders' Equity [Member] | Non-controlling Interest [Member] | Total |
In Thousands, except Share data, unless otherwise specified | |||||||
BALANCE at Mar. 31, 2013 | $2,132 | $713,580 | $301,298 | ($18,784) | $998,226 | ' | $998,226 |
BALANCE (in shares) at Mar. 31, 2013 | 213,218,048 | ' | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | ' | ' | 9,967 | ' | 9,967 | ' | 9,967 |
Foreign currency translation, net of tax | ' | ' | ' | 3,480 | 3,480 | ' | 3,480 |
Cash dividends declared ($0.125 per share) | ' | 483 | -27,224 | ' | -26,741 | ' | -26,741 |
Impact of equity transactions of non-controlling interest | ' | ' | ' | ' | 0 | ' | 0 |
Issuance of common stock | 1 | 710 | ' | ' | 711 | ' | 711 |
Issuance of common stock (in shares) | 65,722 | ' | ' | ' | ' | ' | ' |
Repurchase of common stock | -3 | -1,321 | -3,261 | ' | -4,585 | ' | -4,585 |
Repurchase of common stock (in shares) | -300,000 | ' | ' | ' | ' | ' | ' |
Exercise/release of employee stock awards and related tax benefit (Note 6) | 11 | 7,733 | ' | ' | 7,744 | ' | 7,744 |
Exercise/release of employee stock awards and related tax benefit (Note 6) (in shares) | 1,146,712 | ' | ' | ' | ' | ' | ' |
Stock awards compensation | ' | 10,437 | ' | ' | 10,437 | ' | 10,437 |
BALANCE at Jun. 30, 2013 | 2,141 | 731,622 | 280,780 | -15,304 | 999,239 | 0 | 999,239 |
BALANCE (in shares) at Jun. 30, 2013 | 214,130,482 | ' | ' | ' | ' | ' | ' |
BALANCE at Mar. 31, 2014 | 2,193 | 828,264 | 257,236 | -6,915 | 1,080,778 | 20,256 | 1,101,034 |
BALANCE (in shares) at Mar. 31, 2014 | 219,340,085 | ' | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) | ' | ' | 52 | ' | 52 | -1,408 | -1,356 |
Foreign currency translation, net of tax | ' | ' | ' | -733 | -733 | 1 | -732 |
Cash dividends declared ($0.125 per share) | ' | 256 | -27,730 | ' | -27,474 | ' | -27,474 |
Impact of equity transactions of non-controlling interest | ' | -2,683 | ' | ' | -2,683 | 2,683 | 0 |
Issuance of common stock | ' | 419 | ' | ' | 419 | ' | 419 |
Issuance of common stock (in shares) | 44,904 | ' | ' | ' | ' | ' | ' |
Repurchase of common stock | ' | -317 | -521 | ' | -838 | -5,585 | -6,423 |
Repurchase of common stock (in shares) | 0 | ' | ' | ' | ' | ' | ' |
Exercise/release of employee stock awards and related tax benefit (Note 6) | 7 | 3,034 | ' | ' | 3,041 | ' | 3,041 |
Exercise/release of employee stock awards and related tax benefit (Note 6) (in shares) | 567,126 | ' | ' | ' | ' | ' | ' |
Stock awards compensation | ' | 8,800 | ' | ' | 8,800 | ' | 8,800 |
BALANCE at Jun. 30, 2014 | $2,200 | $837,773 | $229,037 | ($7,648) | $1,061,362 | $15,947 | $1,077,309 |
BALANCE (in shares) at Jun. 30, 2014 | 219,952,115 | ' | ' | ' | ' | ' | ' |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statement of Shareholders' Equity (Unaudited) (Parenthetical) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Condensed Consolidated statement of Shareholders' Equity (Unaudited) [Abstract] | ' | ' |
Cash dividend per share (in dollars per share) | $0.13 | $0.13 |
Condensed_Consolidated_Stateme4
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES: | ' | ' |
Net income (loss) including non-controlling interest | ($1,356) | $9,967 |
Adjustments to reconcile net income (loss) to net cash provided by operations: | ' | ' |
Depreciation and amortization | 14,980 | 16,452 |
Stock award compensation | 8,800 | 10,437 |
Deferred income taxes | -3,237 | -14,148 |
Other | 570 | 13 |
Net change in assets and liabilities, net of effects from currency fluctuations: | ' | ' |
Accounts receivable | 102,475 | 60,935 |
Prepaid expenses and other assets | -48 | 1,871 |
Accounts payable and accrued expenses | -24,695 | -25,892 |
Deferred revenue | -58,194 | -41,987 |
Income taxes | -17,231 | 11,002 |
Net cash provided by operating activities | 22,064 | 28,650 |
CASH FLOWS USED IN INVESTING ACTIVITIES: | ' | ' |
Purchase of property and equipment | -2,189 | -1,667 |
Purchase of capitalized software | -6,988 | -5,745 |
Reimbursement of proceeds from divestiture of business segments | -8,046 | 0 |
Other | 0 | -275 |
Net cash used in investing activities | -17,223 | -7,687 |
CASH FLOWS USED IN FINANCING ACTIVITIES: | ' | ' |
Proceeds from borrowings | 0 | 26,500 |
Payments on borrowings | 0 | -29,500 |
Net proceeds from exercise of stock awards including excess tax benefits | 3,386 | 7,105 |
Employee contribution to stock purchase plans | 397 | 651 |
Repurchase of common stock | -6,423 | -4,962 |
Dividends | -27,474 | -26,741 |
Other | 0 | -299 |
Net cash used in financing activities | -30,114 | -27,246 |
EFFECT OF EXCHANGE RATE CHANGES ON CASH | 728 | -2,261 |
NET CHANGE IN CASH AND CASH EQUIVALENTS | -24,545 | -8,544 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 300,059 | 89,873 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $275,514 | $81,329 |
Basis_of_Presentation
Basis of Presentation | 3 Months Ended | ||||
Jun. 30, 2014 | |||||
Basis of Presentation [Abstract] | ' | ||||
Basis of Presentation | ' | ||||
Note 1 - Basis of Presentation | |||||
The accompanying unaudited condensed consolidated financial statements (“financial statements”) include the accounts of Compuware Corporation and its majority owned subsidiaries (collectively, the "Company", “Compuware”, “we”, “our” and “us”). All inter-company balances and transactions have been eliminated in consolidation. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, contingencies and results of operations. While management has based their assumptions and estimates on the facts and circumstances existing at June 30, 2014, final amounts may differ from these estimates. | |||||
In the opinion of management of the Company, the accompanying financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods presented. These financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto for the year ended March 31, 2014 included in the Company's annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”). The condensed consolidated balance sheet at March 31, 2014 has been derived from the audited financial statements at that date but does not include all information and footnotes required by U.S. GAAP for complete financial statements. The results of operations for interim periods are not necessarily indicative of results expected to be achieved for the full fiscal year. | |||||
Discontinued Operations | |||||
On January 31, 2014, the Company sold substantially all of the assets and transferred certain liabilities associated with its Changepoint, Professional Services and Uniface business segments to Marlin Equity Partners (“Marlin”). | |||||
At the initial closing on January 31, 2014, Marlin paid a cash payment of $112 million. During the first quarter of fiscal 2015, the Company paid approximately $8.0 million to Marlin as a purchase price adjustment pursuant to the purchase agreement related to customer accounts receivable which were retained by the Company in excess of the initially estimated amount. | |||||
The Changepoint, Professional Services and Uniface segment results have been presented as discontinued operations herein for the three months ended June 30, 2013. The following table provides the financial results included in income from discontinued operations, net of tax during the periods presented (in thousands): | |||||
Three Months Ended | |||||
June 30, | |||||
2013 | |||||
Revenues | $ | 56,707 | |||
Operating expenses | 47,932 | ||||
Income from operations | 8,775 | ||||
Income tax provision | 3,070 | ||||
Income from discontinued operations, net of tax | $ | 5,705 | |||
Non-Controlling Interest | |||||
As of June 30, 2014, Compuware owned 83.47 percent of the economic and voting interest in Covisint. The Company has announced its intention to effect a tax-free spin-off of its Covisint shares. The Company has received a private letter ruling from the Internal Revenue Service (“IRS”) providing that, subject to certain conditions, the anticipated spin-off will be tax-free to Compuware and its stockholders for U.S. federal income tax purposes. The spin-off or other disposition is subject to various conditions, including the approval of Compuware’s Board of Directors (“Board”), the receipt of any necessary regulatory or other approvals, the receipt of an opinion of counsel and the existence of satisfactory market conditions. The non-controlling equity interest in Covisint is reflected as non-controlling interest in the accompanying consolidated balance sheets and was $15.9 million as of June 30, 2014. | |||||
During the three months ended June 30, 2014 the Company purchased approximately 1.4 million Covisint shares in the market and in private transactions. These purchases were made in order for the Company to maintain its 80% or greater ownership of Covisint common stock, a condition to the tax-free status of the anticipated spin-off, in anticipation of the expiration of lock-up agreements applicable to holders of non-qualified stock options to acquire Covisint common stock and the subsequent exercise of those options. | |||||
There can be no assurance as to when the proposed spin-off or any other disposition will be completed, if at all. Unless and until Compuware ceases to own a controlling financial interest in Covisint, the Company will consolidate Covisint for financial reporting purposes, with a non-controlling interest adjustment for the economic interest in Covisint that Compuware does not own. | |||||
In connection with the Covisint IPO, the Company entered into various agreements relating to the separation of the Covisint business from the rest of Compuware’s businesses, including a master separation agreement, an intellectual property agreement, a registration rights agreement, a shared services agreement and a tax sharing agreement. | |||||
Basis for Revenue Recognition | |||||
The Company derives its revenue from licensing software products; providing maintenance and support services for those products; providing hosted software; and rendering software related and application services. Our software solutions are comprised of license fees, maintenance fees, subscription fees for hosted software and software related services fees. | |||||
The Company sometimes enters into arrangements that include both software related deliverables (licensed software products, maintenance services or software related services) and non-software deliverables (hosted software or application services). Our hosted software and application services do not qualify as software deliverables because our license grant does not allow the customer the right or capability to take possession of the software. For arrangements that contain both software and non-software deliverables, in accordance with ASC 605 “Revenue Recognition,” the Company allocates the arrangement consideration to the non-software deliverables as a group, and to the software deliverables as a group (the “Deliverable Groups”). The Company determines the selling price to allocate the arrangement consideration to the Deliverable Groups based on the following hierarchy of evidence: vendor specific objective evidence of selling price (“VSOE,” meaning price when sold separately) if available; third-party evidence of selling price if VSOE is not available; or best estimated selling price if neither VSOE nor third-party evidence is available. The Company currently is unable to establish VSOE or third-party evidence of selling price for either our software related deliverables or our non-software deliverables as a group. Therefore, the best estimate of selling price for each Deliverable Group is determined primarily by considering various factors, including, but not limited to stated renewal rates in a contract, if any, the historical selling price of these deliverables in similar stand-alone transactions and pricing practices. Total arrangement consideration is then allocated on the basis of the Deliverable Group’s relative selling price. | |||||
Once the Company has allocated the arrangement consideration between the Deliverable Groups, the Company recognizes revenue as described in the respective software license fees, maintenance fees, subscription fees, services fees and application services fees sections below. | |||||
In order for a transaction to be eligible for revenue recognition, the following revenue criteria must be met: persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is reasonably assured. The Company evaluates collectability based on past customer history, external credit ratings and payment terms within customer agreements. | |||||
Software license fees | |||||
The Company's software license agreements provide our customers with a right to use our software perpetually (perpetual licenses) or during a defined term (time-based licenses). | |||||
Assuming all revenue recognition criteria are met, perpetual license fee revenue is recognized using the residual method, under which the fair value, based on VSOE, of all undelivered elements of the agreement (i.e., maintenance and software related services) is deferred. VSOE is based on rates charged for maintenance and software related services when sold separately. The remaining portion of the fee is recognized as license fee revenue upon delivery of the products. | |||||
For revenue arrangements where there is a lack of VSOE for any undelivered elements, license fee revenue is deferred and recognized upon delivery of those elements or when VSOE can be established. However, when maintenance or software related services are the only undelivered elements, the license fee revenue is recognized on a ratable basis over the longer of the maintenance term or the period the software related services are expected to be performed. Such transactions include time-based licenses and certain unlimited capacity licenses, as the Company has not established VSOE for the undelivered elements in these arrangements. In order to comply with Regulation S-X, Rule 5-03(b), which requires product, services and other categories of revenue to be displayed separately on the income statement, the Company separates the license fee, maintenance fee and software related services fee associated with these types of arrangements based on its determination of fair value. The Company applies VSOE for maintenance related to perpetual license transactions and stand-alone software related services arrangements as a reasonable and consistent approximation of fair value to separate license fee, maintenance fee and software related services fee revenue for income statement classification purposes. | |||||
The Company offers flexibility to customers purchasing licenses for its products and related maintenance. Terms of these transactions range from standard perpetual license sales that include one year of maintenance to multi-year (generally two to five years), multi-product contracts. The Company allows deferred payment terms with installments collectable over the term of the contract. Based on the Company’s successful collection history for deferred payments, license fees (net of any financing fees) are generally recognized as revenue as discussed above. In certain transactions where it cannot be concluded that the fee is fixed or determinable due to the nature of the deferred payment terms, the Company recognizes revenue as payments become due. Financing fees are recognized as interest income over the term of the related receivable. | |||||
Maintenance fees | |||||
The Company’s maintenance arrangements allow customers to receive technical support and advice, including problem resolution services and assistance in product installation, error corrections and any product enhancements released during the maintenance period. The first year of maintenance is generally included with all license agreements. Maintenance fees are recognized ratably over the term of the maintenance arrangements, which generally range from one to five years. | |||||
Subscription fees | |||||
Subscription fees relate to arrangements that permit our customers to access and utilize our hosted software delivered on a software-as-a-service (“SaaS”) basis. Subscription fees are deferred upon contract execution and are recognized ratably over the term of the subscription. | |||||
Services fees | |||||
The Company offers implementation, consulting and training services in tandem with the Company’s software solutions. | |||||
Services fees are generally based on hourly or daily rates. Revenues from services are recognized in the period the services are performed provided that collection of the related receivable is reasonably assured. | |||||
Application services fees | |||||
Our application services fees consist of fees related to our Covisint on-demand software including associated services. The arrangements do not provide customers the right to take possession of the software at any time, nor do the arrangements contain rights of return. Many of our application services contracts include a services project fee and a recurring fee for ongoing platform-as-a-service (“PaaS”) operations. Certain services related to these projects have stand-alone value (e.g., other vendors provide similar services) and qualify as a separate unit of accounting. Services that have stand-alone value are recognized as delivered. For those services that do not have stand-alone value, the revenue is deferred and recognized over the longer of the committed term of the subscription agreement (generally one to five years) or the expected period over which the customer will receive benefit (generally five years). For services rendered under fixed-price contracts, revenues are recognized using the proportional performance method and if it is determined that costs will exceed revenue, the expected loss is recorded at the time the loss becomes apparent. The recurring fees are recognized ratably over the applicable service period. | |||||
Deferred Revenue | |||||
Deferred revenue consists primarily of billed and unbilled maintenance and subscription fees related to the future service period of maintenance and subscription agreements in effect at the reporting date. Deferred license, software related services and application services fees are also included in deferred revenue for those arrangements that are being recognized over time. Sales commission costs that directly relate to revenue transactions that are deferred are recorded as “prepaid expenses and other current assets” or non-current “other assets”, as applicable, in the condensed consolidated balance sheets and recognized as "cost of application services" or “sales and marketing” expenses, as applicable, in the condensed consolidated statements of operations over the revenue recognition period of the related customer contracts. | |||||
Research and Development | |||||
Research and development (“R&D”) costs from continuing operations, that include primarily the cost of programming personnel, amounted to $20.0 million and $21.7 million for the three months ended June 30, 2014 and 2013, respectively. R&D costs related to our software solutions are reported as “technology development and support” and for our application services network, the costs are reported as “cost of application services” in the condensed consolidated statements of operations. | |||||
Income Taxes | |||||
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax bases of assets and liabilities and net operating loss and credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date. The Company does not permanently reinvest any earnings in its foreign subsidiaries and recognizes all deferred tax liabilities that arise from outside basis differences in its investment in subsidiaries. | |||||
The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. These deferred tax assets are subject to periodic assessments as to recoverability and if it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recorded which would increase the provision for income taxes. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. | |||||
Interest and penalties related to uncertain tax positions are included in the income tax provision. | |||||
The Company’s effective tax rate for the first quarter of fiscal year 2015 was 55.7% compared to (33.6%) for the first quarter of fiscal year 2014. The effective rate for the three months ended June 30, 2014, reflects a benefit due to the loss incurred and the recording of interest income resulting from a refund claim approved by the IRS during the quarter. The effective rate for the three months ended June 30, 2013, reflects the recording of a benefit related to stock compensation that was previously expected to not result in a tax deduction. This benefit resulted due to a change in the Company’s expectation regarding the tax deductibility of compensation for certain officers during the first quarter of fiscal year 2014. | |||||
Cash paid for income taxes was $18.7 million and $3.7 million for the first quarter of fiscal 2015 and 2014, respectively. | |||||
Recently Issued Accounting Pronouncements | |||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-9, “Revenue from Contracts with Customers (Topic 606)”. This ASU supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) 605, Revenue Recognition. ASU No. 2014-09 will require an entity to recognize revenue when it transfers promised goods or services to customers using a five-step model that requires entities to exercise judgment when considering the terms of the contracts. This ASU is effective for us beginning after April 1, 2017 and can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. The Company has not yet evaluated the impact of the update on its financial statements. | |||||
In April 2014, the FASB issued ASU No. 2014-8, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360) — Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” ASU No. 2014-8 changes the requirements for reporting discontinued operations to only allow presentation of a disposal of an entity or component of an entity as a discontinued operation if it represents a strategic shift that has (or will have) a major effect on an entities operations or financial results. This ASU is effective for the first annual period beginning after December 15, 2014. The Company has not yet evaluated the impact of the update on its financial statements. | |||||
In March 2013, the FASB issued ASU No. 2013-05, “Foreign Currency Matters (Topic 830) — Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.” ASU No. 2013-05 resolves the diversity in practice about whether Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. This ASU was effective prospectively for the first annual period beginning after December 15, 2013. The adoption of ASU No. 2013-05 did not have a significant impact on the Company’s consolidated balance sheet, statement of operations or cash flows. | |||||
In February 2013, the FASB issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”. This ASU requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. The amendments in this Update supersede and replace the presentation requirements for reclassifications out of accumulated other comprehensive income in ASUs 2011-05 (issued in June 2011) and 2011-12 (issued in December 2011) for all public and private organizations. For public entities, the amendments of this ASU are effective prospectively for reporting periods beginning after December 15, 2012. The requirements of this ASU were adopted during the Company’s quarter ended March 31, 2013 and did not have a significant impact on its disclosures. |
Financing_Receivables
Financing Receivables | 3 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Financing Receivables [Abstract] | ' | ||||||||||||||||||||
Financing Receivables | ' | ||||||||||||||||||||
Note 2 – Financing Receivables | |||||||||||||||||||||
In accordance with ASU No. 2010-20 “Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses,” the Company allows deferred payment terms that exceed one year for customers purchasing licenses (perpetual or time-based) for our software products and the related maintenance services (“multi-year deferred payment arrangements”). A financing receivable exists when the license transfers to the customer or the related maintenance service has been provided (i.e., revenue recognition has occurred) prior to the due date of the related receivable. Our products financing receivables primarily consist of the perpetual license portion of outstanding multi-year deferred payment arrangements. | |||||||||||||||||||||
The following is an aged analysis of our products and loans financing receivables based on invoice dates as of June 30, 2014 and March 31, 2014 (in thousands): | |||||||||||||||||||||
As of June 30, 2014 | |||||||||||||||||||||
Greater than | |||||||||||||||||||||
0-29 days | 30-90 days | 90 days | Total | ||||||||||||||||||
past | past | past | financing | ||||||||||||||||||
invoice date | invoice date | invoice date | Unbilled | receivables | |||||||||||||||||
Pass rating | |||||||||||||||||||||
Software products | $ | 1,674 | $ | 670 | $ | 90 | $ | 38,277 | $ | 40,711 | |||||||||||
As of March 31, 2014 | |||||||||||||||||||||
Greater than | |||||||||||||||||||||
0-29 days | 30-90 days | 90 days | Total | ||||||||||||||||||
past | past | past | financing | ||||||||||||||||||
invoice date | invoice date | invoice date | Unbilled | receivables | |||||||||||||||||
Pass rating | |||||||||||||||||||||
Software products | $ | 2,684 | $ | 628 | $ | 26 | $ | 33,807 | $ | 37,145 | |||||||||||
As of June 30, 2014 and March 31, 2014, the Company had no financing receivables with a “watch” rating and no allowance for credit losses on our financing receivables. |
Foreign_Currency_Transactions_
Foreign Currency Transactions and Derivatives | 3 Months Ended |
Jun. 30, 2014 | |
Foreign Currency Transactions and Derivatives [Abstract] | ' |
Foreign Currency Transactions and Derivatives | ' |
Note 3 - Foreign Currency Transactions and Derivatives | |
The Company is exposed to foreign exchange rate risks related to assets and liabilities that are denominated in non-local currency and current inter-company balances due to and from the Company’s foreign subsidiaries. The Company enters into foreign currency forward contracts to sell or buy currencies with the intent of mitigating foreign exchange rate risks related to these balances. The Company does not hedge currency risk related to anticipated revenue or expenses denominated in foreign currency. All foreign exchange derivatives are recognized on the condensed consolidated balance sheets at fair value. See note 4 of the condensed consolidated financial statements for further information. | |
The foreign currency net losses for the three months ended June 30, 2014 and 2013 were $205,000 and $544,000, respectively. The hedging transaction net gains or (losses) from foreign exchange derivative contracts for the three months ended June 30, 2014 and 2013 were ($218,000) and $10,000, respectively. These amounts were recorded to “administrative and general” in the condensed consolidated statements of operations. | |
The Company has derivative contracts maturing through July 2014 to sell $4.8 million and purchase $17.4 million in foreign currencies at June 30, 2014 and had derivative contracts maturing through April 2014 to sell $3.1 million and purchase $24.1 million in foreign currencies at March 31, 2014. |
Fair_Value_of_Assets_and_Liabi
Fair Value of Assets and Liabilities | 3 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Fair Value of Assets and Liabilities [Abstract] | ' | ||||||||||||||||
Fair Value of Assets and Liabilities | ' | ||||||||||||||||
Note 4 - Fair Value of Assets and Liabilities | |||||||||||||||||
The Company reports money market funds and foreign exchange derivatives at fair value on a recurring basis using the following fair value hierarchy: (1) Level 1 - quoted prices in active markets for identical assets or liabilities; (2) Level 2 – inputs other than level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and (3) Level 3 - unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. | |||||||||||||||||
The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis (in thousands): | |||||||||||||||||
As of June 30, 2014 | |||||||||||||||||
Quoted Prices in | Significant | Significant | |||||||||||||||
Active Markets for | Other Observable | Unobservable | |||||||||||||||
Estimated | Identical Assets | Inputs | Inputs | ||||||||||||||
Fair Value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Assets: | |||||||||||||||||
Cash equivalents - money market funds | $ | 191,419 | $ | 191,419 | - | - | |||||||||||
As of March 31, 2014 | |||||||||||||||||
Quoted Prices in | Significant | Significant | |||||||||||||||
Active Markets for | Other Observable | Unobservable | |||||||||||||||
Estimated | Identical Assets | Inputs | Inputs | ||||||||||||||
Fair Value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Assets: | |||||||||||||||||
Cash equivalents - money market funds | $ | 232,252 | $ | 232,252 | - | - | |||||||||||
Liabilities: | |||||||||||||||||
Foreign exchange derivatives | $ | 39 | - | $ | 39 | - | |||||||||||
Non-financial assets such as goodwill and intangible assets are also subject to nonrecurring fair value measurements if they are deemed to be impaired. See note 7 of the condensed consolidated financial statements for further information. |
Computation_of_Earnings_per_Co
Computation of Earnings per Common Share | 3 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Computation of Earnings per Common Share [Abstract] | ' | ||||||||
Computation of Earnings per Common Share | ' | ||||||||
Note 5 - Computation of Earnings per Common Share | |||||||||
Earnings per common share data were computed as follows (in thousands, except per share amounts): | |||||||||
Three Months Ended June 30, | |||||||||
2014 | 2013 | ||||||||
Amounts attributable to Compuware common shareholders | |||||||||
Income (loss) from continuing operations | $ | (1,356 | ) | $ | 4,262 | ||||
Loss attributable to non-controlling interests | (1,408 | ) | - | ||||||
Income from continuing operations, net of tax | 52 | 4,262 | |||||||
Income from discontinued operations, net of tax | - | 5,705 | |||||||
Net income attributable to Compuware Corporation common shareholders | $ | 52 | $ | 9,967 | |||||
Basic earnings per share: | |||||||||
Continuing operations | 0 | 0.02 | |||||||
Discontinued operations | 0 | 0.03 | |||||||
Basic earnings per share | $ | 0 | $ | 0.05 | |||||
Weighted-average common shares outstanding | 219,667 | 213,640 | |||||||
Diluted earnings per share: | |||||||||
Continuing operations | 0 | 0.02 | |||||||
Discontinued operations | 0 | 0.03 | |||||||
Diluted earnings per share | $ | 0 | $ | 0.05 | |||||
Weighted-average common shares outstanding | 219,667 | 213,640 | |||||||
Dilutive effect of stock awards | 3,680 | 6,054 | |||||||
Total shares | 223,347 | 219,694 | |||||||
During the three months ended June 30, 2014 and 2013, stock awards to purchase 3.9 million and 2.2 million shares, respectively, were excluded from the diluted earnings per share calculation because they were anti-dilutive and stock awards to purchase 2.6 million and 5.4 million shares, respectively, were excluded from the calculation because the performance conditions for vesting had not yet been met. See note 6 for a discussion of options with performance conditions and performance based stock awards. |
Stock_Benefit_Plans_and_StockB
Stock Benefit Plans and Stock-Based Compensation | 3 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Stock Benefit Plans and Stock-Based Compensation [Abstract] | ' | ||||||||||||||||
Stock Benefit Plans and Stock-Based Compensation | ' | ||||||||||||||||
Note 6 – Stock Benefit Plans and Stock-Based Compensation | |||||||||||||||||
Stock Benefit Plans | |||||||||||||||||
The Company has the following stock benefit plans: (1) the Amended and Restated 2007 Long Term Incentive Plan (“2007 LTIP”) allows the Company’s Compensation Committee to grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based cash or restricted stock unit awards and cash incentive awards to employees and directors of the Company; (2) the Employee Stock Purchase Plan allows participating U.S. and Canadian employees the right to have up to 10% of their compensation withheld to purchase Company common stock at a 5% discount; and (3) the Employee Stock Ownership Plan and Trust/401(k) Plan (“ESOP/401(k)”), which includes a qualified cash or deferred arrangement as described under Section 401(k) of the Internal Revenue Code, allows the Company to make contributions to the ESOP/401(k) for the benefit of substantially all U.S. employees. | |||||||||||||||||
Covisint Corporation (“Covisint”), a subsidiary of the Company, maintains a stock benefit plan referred to as the 2009 Long-Term Incentive Plan (“2009 Covisint LTIP”) allowing the board of directors of Covisint to grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance-based cash or restricted stock unit awards and cash incentive awards to employees and directors of Covisint and the Company. | |||||||||||||||||
ESOP/401(k) | |||||||||||||||||
The Company provides a matching program for the 401(k) component of the ESOP/401(k). The Company matches 33% of employees’ 401(k) contributions up to 2% of eligible earnings. Matching contributions by the Company vest 100% when an employee attains three years of service with the Company. During the three months ended June 30, 2014 and 2013, the Company expensed $877,000 and $884,000, respectively, related to this plan. | |||||||||||||||||
Stock Option Activity | |||||||||||||||||
Options that Vest Based on Service Conditions Only | |||||||||||||||||
A summary of activity for options that vest based on service conditions only under the Company’s stock-based compensation plans as of June 30, 2014, and changes during the three months then ended is presented below (shares and intrinsic value in thousands): | |||||||||||||||||
Three Months Ended | |||||||||||||||||
30-Jun-14 | |||||||||||||||||
Weighted | |||||||||||||||||
Weighted | Average | ||||||||||||||||
Average | Remaining | Aggregate | |||||||||||||||
Number of | Exercise | Contractual | Intrinsic | ||||||||||||||
Options | Price | Term in Years | Value | ||||||||||||||
Options outstanding as of March 31, 2014 | 14,236 | $ | 8.8 | ||||||||||||||
Granted | 2,269 | 9.98 | |||||||||||||||
Exercised | (308 | ) | 7.85 | $ | 673 | ||||||||||||
Forfeited | (25 | ) | 10.19 | ||||||||||||||
Cancelled/expired | (25 | ) | 9.35 | ||||||||||||||
Options outstanding as of June 30, 2014 | 16,147 | $ | 8.98 | 6.76 | $ | 18,756 | |||||||||||
Options vested and expected to vest, net of estimated forfeitures, as of June 30, 2014 | 15,444 | $ | 8.93 | 6.65 | $ | 18,655 | |||||||||||
Options exercisable as of June 30, 2014 | 10,107 | $ | 8.56 | 5.65 | $ | 15,550 | |||||||||||
The average fair value of stock options vested during the three months ending June 30, 2014 and 2013 was $3.91 and $4.19 per share, respectively. | |||||||||||||||||
Options that Vest Based on both Performance and Service Conditions (“Performance Options”) | |||||||||||||||||
As of June 30, 2014, 2.4 million stock options that vest based on both service and performance conditions were outstanding. The performance vesting conditions for these options are based on company-wide revenue and earnings targets. As of June 30, 2014, it is deemed probable that the performance targets for approximately 887,000 of these options will be achieved. Expense totaling $119,000 was recorded in the condensed consolidated statement of operations related to these stock options during the first quarter of 2015. | |||||||||||||||||
A summary of activity for options that vest based on the achievement of both service and performance conditions under the Company’s stock-based compensation plans as of June 30, 2014, and changes during the three months then ended is presented below (shares and intrinsic value in thousands): | |||||||||||||||||
Three Months Ended | |||||||||||||||||
30-Jun-14 | |||||||||||||||||
Weighted | |||||||||||||||||
Weighted | Average | ||||||||||||||||
Average | Remaining | Aggregate | |||||||||||||||
Number of | Exercise | Contractual | Intrinsic | ||||||||||||||
Options | Price | Term in Years | Value | ||||||||||||||
Options outstanding as of March 31, 2014 | 2,150 | $ | 10.07 | ||||||||||||||
Granted | 887 | 10.36 | |||||||||||||||
Forfeited/Cancelled | (668 | ) | 9.83 | ||||||||||||||
Options outstanding as of June 30, 2014 | 2,369 | $ | 10.25 | 8.85 | $ | 225 | |||||||||||
Options vested and expected to vest, net of estimated forfeitures, as of June 30, 2014 | 887 | $ | 10.36 | 9.84 | $ | - | |||||||||||
Options exercisable as of June 30, 2014 | - | $ | - | - | $ | - | |||||||||||
The weighted average fair value of stock options granted during the periods and the assumptions used to estimate those values using the Black-Scholes option pricing model were as follows: | |||||||||||||||||
Three Months Ended | |||||||||||||||||
June 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Expected volatility | 33.61 | % | 39.24 | % | |||||||||||||
Risk-free interest rate | 1.84 | % | 1.54 | % | |||||||||||||
Expected lives at date of grant (in years) | 5.6 | 7.5 | |||||||||||||||
Weighted-average fair value of the options granted | $ | 1.97 | $ | 2.82 | |||||||||||||
Dividend yield assumption | 4.91 | % | 4.41 | % | |||||||||||||
Restricted Stock Units and Performance-Based Stock Awards Activity | |||||||||||||||||
A summary of non-vested restricted stock units (“RSUs”) and performance-based stock awards (“PSAs” and collectively “Non-vested RSU”) activity under the Company’s LTIP as of June 30, 2014, and changes during the three months then ended is presented below (shares and intrinsic value in thousands): | |||||||||||||||||
Three Months Ended | |||||||||||||||||
30-Jun-14 | |||||||||||||||||
Weighted | |||||||||||||||||
Average | Aggregate | ||||||||||||||||
Grant-Date | Intrinsic | ||||||||||||||||
Shares | Fair Value | Value | |||||||||||||||
Non-vested RSU outstanding as of March 31, 2014 | 2,124 | ||||||||||||||||
Granted | 1,317 | $ | 10.16 | ||||||||||||||
Dividend Equivalents Issued | 32 | 9.98 | |||||||||||||||
Released | (343 | ) | $ | 3,270 | |||||||||||||
Forfeited | (13 | ) | |||||||||||||||
Non-vested RSU outstanding as of June 30, 2014 | 3,117 | ||||||||||||||||
Approximately 268,532 PSAs with performance conditions based on company-wide revenue and earnings targets were outstanding as of June 30, 2014. It is deemed probable that the targets will be achieved for 252,700 PSAs as of June 30, 2014. | |||||||||||||||||
During the three months ended June 30, 2014 and 2013 approximately 32,000 and 45,000 dividend equivalent shares were issued to participants holding non-vested RSUs as of each quarter’s respective dividend record date. | |||||||||||||||||
Covisint Corporation 2009 Long-Term Incentive Plan | |||||||||||||||||
As of June 30, 2014, there were 4.4 million stock options outstanding from the 2009 Covisint LTIP. The majority of these options vested upon the October 1, 2013 closing of Covisint’s IPO. | |||||||||||||||||
Stock Awards Compensation | |||||||||||||||||
Stock award compensation expense was allocated as follows (in thousands): | |||||||||||||||||
Three Months Ended | |||||||||||||||||
June 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Stock-based compensation classified as: | |||||||||||||||||
Cost of maintenance fees | $ | 93 | $ | 178 | |||||||||||||
Cost of subscription fees | 28 | 29 | |||||||||||||||
Cost of services | 9 | 20 | |||||||||||||||
Cost of application services | 2,619 | 486 | |||||||||||||||
Technology development and support | 267 | 574 | |||||||||||||||
Sales and marketing | 1,894 | 2,770 | |||||||||||||||
Administrative and general | 3,890 | 4,517 | |||||||||||||||
Restructuring costs | - | 1,791 | |||||||||||||||
Discontinued operations | - | 72 | |||||||||||||||
Total stock-based compensation expense before income tax provision | $ | 8,800 | $ | 10,437 | |||||||||||||
As of June 30, 2014, total unrecognized compensation cost of $36.8 million, net of estimated forfeitures is expected to be recognized over a weighted-average period of approximately 1.95 years. Unrecognized compensation cost includes $5.2 million, net of estimated forfeitures, related to nonvested Covisint stock options which is expected to be recognized over a weighted-average period of approximately 1.44 years. |
Goodwill_Capitalized_Software_
Goodwill, Capitalized Software and Other Intangible Assets | 3 Months Ended | ||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||
Goodwill, Capitalized Software and Other Intangible Assets [Abstract] | ' | ||||||||||||||||||||||||
Goodwill, Capitalized Software and Other Intangible Assets | ' | ||||||||||||||||||||||||
Note 7 – Goodwill, Capitalized Software and Other Intangible Assets | |||||||||||||||||||||||||
Goodwill | |||||||||||||||||||||||||
The Company has the following reporting units: Application Performance Management (“APM”), Mainframe (“MF”), and Covisint Application Services (“AS” or “Covisint”). The changes in the carrying amount of goodwill by reporting unit during the three months ended June 30, 2014 are summarized as follows (in thousands): | |||||||||||||||||||||||||
APM | MF | AS | Total | ||||||||||||||||||||||
Goodwill as of March 31, 2014 | $ | 482,857 | $ | 140,304 | $ | 25,385 | $ | 648,546 | |||||||||||||||||
Effect of foreign currency translation | (1,101 | ) | - | - | (1,101 | ) | |||||||||||||||||||
Goodwill as of June 30, 2014 | $ | 481,756 | $ | 140,304 | $ | 25,385 | $ | 647,445 | |||||||||||||||||
Capitalized software and other intangible assets | |||||||||||||||||||||||||
The components of the Company’s capitalized software and other intangible assets are as follows (in thousands): | |||||||||||||||||||||||||
As of June 30, 2014 | |||||||||||||||||||||||||
Gross Carrying | Accumulated | Net Carrying | |||||||||||||||||||||||
Amount | Amortization | Amount | |||||||||||||||||||||||
Unamortized intangible assets: | |||||||||||||||||||||||||
Trademarks | $ | 358 | $ | 358 | |||||||||||||||||||||
Amortized intangible assets: | |||||||||||||||||||||||||
Capitalized software | |||||||||||||||||||||||||
Internally developed | 232,237 | $ | (170,993 | ) | 61,244 | ||||||||||||||||||||
Purchased | 122,243 | (108,742 | ) | 13,501 | |||||||||||||||||||||
Customer relationship | 46,980 | (25,215 | ) | 21,765 | |||||||||||||||||||||
Other | 20,479 | (20,479 | ) | - | |||||||||||||||||||||
Total amortized intangible assets | $ | 421,939 | $ | (325,429 | ) | $ | 96,510 | ||||||||||||||||||
As of March 31, 2014 | |||||||||||||||||||||||||
Gross Carrying | Accumulated | Net Carrying | |||||||||||||||||||||||
Amount | Amortization | Amount | |||||||||||||||||||||||
Unamortized intangible assets: | |||||||||||||||||||||||||
Trademarks | $ | 358 | $ | 358 | |||||||||||||||||||||
Amortized intangible assets: | |||||||||||||||||||||||||
Capitalized software | |||||||||||||||||||||||||
Internally developed | 225,249 | $ | (165,720 | ) | 59,529 | ||||||||||||||||||||
Purchased | 122,396 | (107,116 | ) | 15,280 | |||||||||||||||||||||
Customer relationship | 47,000 | (24,185 | ) | 22,815 | |||||||||||||||||||||
Other | 20,530 | (19,750 | ) | 780 | |||||||||||||||||||||
Total amortized intangible assets | $ | 415,175 | $ | (316,771 | ) | $ | 98,404 | ||||||||||||||||||
Capitalized software includes the costs of internally developed software technology and software technology purchased through acquisitions. Internally developed capitalized software costs and capitalized purchased software technology are being amortized over periods up to five years. | |||||||||||||||||||||||||
Customer relationship agreements are related to acquisition activity and are being amortized over periods up to ten years. | |||||||||||||||||||||||||
Other amortized intangible assets include amortizable trademarks and patents relating to acquisition activity and are being amortized over periods up to three years. | |||||||||||||||||||||||||
Unamortized trademark was acquired as part of the Covisint acquisition. This trademark is deemed to have an indefinite life. | |||||||||||||||||||||||||
Amortization of intangible assets | |||||||||||||||||||||||||
Amortization expense of capitalized software, customer relationship and other intangible assets was as follows (in thousands): | |||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||
June 30, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Amortized intangible assets: | |||||||||||||||||||||||||
Capitalized software | |||||||||||||||||||||||||
Internally developed | $ | 5,274 | $ | 4,536 | |||||||||||||||||||||
Purchased | 1,714 | 2,370 | |||||||||||||||||||||||
Customer relationship | 1,035 | 1,031 | |||||||||||||||||||||||
Other | 780 | 762 | |||||||||||||||||||||||
Total amortization expense | $ | 8,803 | $ | 8,699 | |||||||||||||||||||||
Capitalized software amortization related to our on-premises software is reported as “cost of software license fees”, amortization related to our hosted software is reported as “cost of subscription fees” and amortization related to our application services is reported as “cost of application services” in the condensed consolidated statements of operations. | |||||||||||||||||||||||||
Customer relationship amortization related to our APM segment is reported as “sales and marketing” and amortization related to our application services segment is reported as “cost of application services” in the condensed consolidated statements of operations. | |||||||||||||||||||||||||
Amortization expense associated with trademarks and trade names related to our APM segment is reported as “cost of software license fees” and amortization related to our application services segment is reported as “cost of application services” in the condensed consolidated statements of operations. | |||||||||||||||||||||||||
Based on the capitalized software, customer relationship and other intangible assets recorded through June 30, 2014, the annual amortization expense over the next five fiscal years and thereafter is expected to be as follows (in thousands): | |||||||||||||||||||||||||
Fiscal Year Ended March 31, | |||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | ||||||||||||||||||||
Amortized intangible assets: | |||||||||||||||||||||||||
Capitalized software | $ | 28,157 | $ | 25,481 | $ | 15,908 | $ | 8,165 | $ | 3,561 | $ | 461 | |||||||||||||
Customer relationship | 4,141 | 4,140 | 3,976 | 3,832 | 3,832 | 2,879 | |||||||||||||||||||
Other | 780 | ||||||||||||||||||||||||
Total amortization expense | $ | 33,078 | $ | 29,621 | $ | 19,884 | $ | 11,997 | $ | 7,393 | $ | 3,340 |
Segment_Information
Segment Information | 3 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Segment Information [Abstract] | ' | ||||||||||||||||||||
Segment Information | ' | ||||||||||||||||||||
Note 8 – Segment Information | |||||||||||||||||||||
The Company evaluates the performance of its segments based primarily on revenue growth and contribution margin which is operating profit before certain charges such as restructuring, internal information system support, finance, human resources, legal, administration and other corporate charges (“unallocated expenses”). The allocation of income taxes is not evaluated at the segment level. Financial information for the Company’s business segments was as follows (in thousands): | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
30-Jun-14 | |||||||||||||||||||||
Unallocated | |||||||||||||||||||||
Expenses & | |||||||||||||||||||||
APM | MF | AS | Eliminations (1) | Total | |||||||||||||||||
Software license fees | $ | 21,387 | $ | 5,300 | $ | 26,687 | |||||||||||||||
Maintenance fees | 28,295 | 60,165 | 88,460 | ||||||||||||||||||
Subscription fees | 19,362 | 19,362 | |||||||||||||||||||
Services fees | 8,332 | 82 | 8,414 | ||||||||||||||||||
Application service fees | 21,587 | 21,587 | |||||||||||||||||||
Total revenues | 77,376 | 65,547 | 21,587 | 164,510 | |||||||||||||||||
Operating expenses | 75,633 | 17,116 | 33,392 | 41,655 | 167,796 | ||||||||||||||||
Contribution / operating | $ | 1,743 | $ | 48,431 | $ | (11,805 | ) | $ | (41,655 | ) | $ | (3,286 | ) | ||||||||
-1 | Unallocated operating expenses include $3.0 million in restructuring expenses. See note 9 for additional information. | ||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
30-Jun-13 | |||||||||||||||||||||
Unallocated | |||||||||||||||||||||
Expenses | |||||||||||||||||||||
APM | MF | AS | & Eliminations (1) | Total | |||||||||||||||||
Software license fees | $ | 23,530 | (2) | $ | 8,213 | (2) | $ | $ | $ | 31,743 | |||||||||||
Maintenance fees | 23,801 | (2) | 63,361 | (2) | 87,162 | ||||||||||||||||
Subscription fees | 20,132 | 20,132 | |||||||||||||||||||
Services fees | 7,602 | 69 | 7,671 | ||||||||||||||||||
Application service fees | 24,101 | 24,101 | |||||||||||||||||||
Total revenues | 75,065 | 71,643 | 24,101 | 170,809 | |||||||||||||||||
Operating expenses | 74,411 | (2) | 18,811 | (2) | 25,423 | 49,175 | 167,820 | ||||||||||||||
Contribution / operating | $ | 654 | $ | 52,832 | $ | (1,322 | ) | $ | (49,175 | ) | $ | 2,989 | |||||||||
-1 | Unallocated operating expenses include $4.8 million in restructuring expenses. See note 9 for additional information. | ||||||||||||||||||||
-2 | Prior year amounts have been reclassified to reflect the transition of APM for Mainframe from the Mainframe segment to the APM segment. | ||||||||||||||||||||
The Company does not evaluate assets and capital expenditures on a segment basis, and accordingly such information is not provided. | |||||||||||||||||||||
Financial information regarding geographic operations is presented in the table below (in thousands): | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
June 30, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||
United States | $ | 96,121 | $ | 99,303 | |||||||||||||||||
Europe and Africa | 41,247 | 42,111 | |||||||||||||||||||
Other international operations | 27,142 | 29,395 | |||||||||||||||||||
Total revenues | $ | 164,510 | $ | 170,809 | |||||||||||||||||
As of | As of | ||||||||||||||||||||
June 30, | March 31, | ||||||||||||||||||||
2014 | 2014 | ||||||||||||||||||||
Long-lived assets | |||||||||||||||||||||
United States | $ | 784,040 | $ | 785,403 | |||||||||||||||||
Austria | 208,157 | 210,755 | |||||||||||||||||||
Other | 13,100 | 14,210 | |||||||||||||||||||
Total long-lived assets | $ | 1,005,297 | $ | 1,010,368 | |||||||||||||||||
Long-lived assets are comprised of property and equipment, goodwill and capitalized software. |
Restructuring_Charges
Restructuring Charges | 3 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Restructuring Charges [Abstract] | ' | ||||||||||||||||||||
Restructuring Charges | ' | ||||||||||||||||||||
Note 9 – Restructuring Charges | |||||||||||||||||||||
In February 2013, the Company approved the initial phase of a restructuring plan designed to achieve cost savings. In January 2014, the Company announced the final phase of its restructuring plan designed to reduce the Company’s annual cost base and substantially improve the Company’s operating margins, increasing the aggregate targeted annualized cost savings to a total of $110 million to $120 million. This final phase includes additional reductions in the global workforce primarily across all general, administrative and shared services divisions of the Company, along with the early termination of certain operating leases and the closing or reduction in size of office facilities worldwide. | |||||||||||||||||||||
These cost reduction efforts, which are expected to be substantially completed by the end of fiscal 2015, are expected to result in cumulative charges of $50 million to $60 million. Substantially all of the estimated charges will result in future cash expenditures. | |||||||||||||||||||||
During the first quarter of 2015, the Company recorded a charge of approximately $3.0 million for costs associated with these reductions, primarily related to severance costs for 19 terminated employees. The timing of additional charges is dependent upon certain actions to be taken in the future. During the first quarter of 2014, the Company recorded a charge of approximately $4.8 million for costs associated with these reductions, primarily related to severance costs for 67 terminated employees. | |||||||||||||||||||||
The following table summarizes the restructuring accrual as of March 31, 2014 and changes to the accrual during the three months ended June 30, 2014 (in thousands): | |||||||||||||||||||||
Employee | Lease | Total | |||||||||||||||||||
Termination | Abandonment | Restructuring | |||||||||||||||||||
Benefits | Costs | Other | Activity | ||||||||||||||||||
Accrual at March 31, 2014 | $ | 3,031 | $ | 1,544 | $ | 17 | $ | 4,592 | |||||||||||||
Restructuring charge | 2,350 | 557 | 68 | 2,975 | |||||||||||||||||
Payments | (2,487 | ) | (884 | ) | (17 | ) | (3,388 | ) | |||||||||||||
Accrual at June 30, 2014 | $ | 2,894 | $ | 1,217 | $ | 68 | $ | 4,179 | |||||||||||||
The Company evaluates its business segments prior to restructuring charges. Lease abandonment and other restructuring charges were not related to any specific segment. Restructuring charges across the business segments were as follows (in thousands): | |||||||||||||||||||||
Quarter Ended | |||||||||||||||||||||
30-Jun-14 | |||||||||||||||||||||
Unallocated | |||||||||||||||||||||
APM | MF | AS | Expenses | Total | |||||||||||||||||
Employee termination benefits | $ | 759 | $ | 230 | $ | - | $ | 1,361 | $ | 2,350 | |||||||||||
Lease abandonment costs | - | - | - | 557 | 557 | ||||||||||||||||
Other | - | - | - | 68 | 68 | ||||||||||||||||
Total restructuring charges | $ | 759 | $ | 230 | $ | - | $ | 1,986 | $ | 2,975 | |||||||||||
As of June 30, 2014, substantially all of the restructuring accrual was recorded in current “accrued expenses” in the condensed consolidated balance sheets. | |||||||||||||||||||||
The accruals for employee termination benefits at June 30, 2014 primarily represent the amounts to be paid to employees that have been terminated as a result of initiatives described above. | |||||||||||||||||||||
The accruals for lease abandonment costs at June 30, 2014 represent the expected payments related to leases that have been terminated before the end of the contractual term. For terminated operating leases, the accrual includes the remaining fair value of lease obligations for exited and demised locations, as determined at the cease-use dates of those facilities, net of estimated sublease income that could be reasonably obtained in the future, and will be paid out over the remaining lease terms, the last of which ends in fiscal 2017. Projected sublease income is based on management’s estimates, which are subject to change. |
Contingencies
Contingencies | 3 Months Ended |
Jun. 30, 2014 | |
Contingencies [Abstract] | ' |
Contingencies | ' |
Note 10 – Contingencies | |
Effective October 1, 2013, the Company terminated a post-retirement consulting agreement with its former Chairman for “Cause”, and all outstanding equity awards he held terminated pursuant to the applicable agreements. On November 13, 2013, the former Chairman filed a lawsuit against the Company regarding his termination. The Company and the former Chairman have agreed to binding arbitration of this dispute. The accounting impact of the termination of the vested and unvested stock options and unvested RSUs was recognized in other income net of a portion of the estimated liability related to the pending lawsuit. The Company believes its accruals as of June 30, 2014, related to this dispute are reasonably estimated. | |
The Company is subject to various legal actions and claims incidental to its business. Litigation is subject to many uncertainties and the outcome of individual litigated matters is not predictable with assurance. Based on information currently known, the Company does not believe these will have a material impact on the Company’s financial position, results of operations or cash flows. |
Basis_of_Presentation_Policies
Basis of Presentation (Policies) | 3 Months Ended | ||||
Jun. 30, 2014 | |||||
Basis of Presentation [Abstract] | ' | ||||
Discontinued Operations | ' | ||||
Discontinued Operations | |||||
On January 31, 2014, the Company sold substantially all of the assets and transferred certain liabilities associated with its Changepoint, Professional Services and Uniface business segments to Marlin Equity Partners (“Marlin”). | |||||
At the initial closing on January 31, 2014, Marlin paid a cash payment of $112 million. During the first quarter of fiscal 2015, the Company paid approximately $8.0 million to Marlin as a purchase price adjustment pursuant to the purchase agreement related to customer accounts receivable which were retained by the Company in excess of the initially estimated amount. | |||||
The Changepoint, Professional Services and Uniface segment results have been presented as discontinued operations herein for the three months ended June 30, 2013. The following table provides the financial results included in income from discontinued operations, net of tax during the periods presented (in thousands): | |||||
Three Months Ended | |||||
June 30, | |||||
2013 | |||||
Revenues | $ | 56,707 | |||
Operating expenses | 47,932 | ||||
Income from operations | 8,775 | ||||
Income tax provision | 3,070 | ||||
Income from discontinued operations, net of tax | $ | 5,705 | |||
Non-controlling Interest | ' | ||||
Non-Controlling Interest | |||||
As of June 30, 2014, Compuware owned 83.47 percent of the economic and voting interest in Covisint. The Company has announced its intention to effect a tax-free spin-off of its Covisint shares. The Company has received a private letter ruling from the Internal Revenue Service (“IRS”) providing that, subject to certain conditions, the anticipated spin-off will be tax-free to Compuware and its stockholders for U.S. federal income tax purposes. The spin-off or other disposition is subject to various conditions, including the approval of Compuware’s Board of Directors (“Board”), the receipt of any necessary regulatory or other approvals, the receipt of an opinion of counsel and the existence of satisfactory market conditions. The non-controlling equity interest in Covisint is reflected as non-controlling interest in the accompanying consolidated balance sheets and was $15.9 million as of June 30, 2014. | |||||
During the three months ended June 30, 2014 the Company purchased approximately 1.4 million Covisint shares in the market and in private transactions. These purchases were made in order for the Company to maintain its 80% or greater ownership of Covisint common stock, a condition to the tax-free status of the anticipated spin-off, in anticipation of the expiration of lock-up agreements applicable to holders of non-qualified stock options to acquire Covisint common stock and the subsequent exercise of those options. | |||||
There can be no assurance as to when the proposed spin-off or any other disposition will be completed, if at all. Unless and until Compuware ceases to own a controlling financial interest in Covisint, the Company will consolidate Covisint for financial reporting purposes, with a non-controlling interest adjustment for the economic interest in Covisint that Compuware does not own. | |||||
In connection with the Covisint IPO, the Company entered into various agreements relating to the separation of the Covisint business from the rest of Compuware’s businesses, including a master separation agreement, an intellectual property agreement, a registration rights agreement, a shared services agreement and a tax sharing agreement. | |||||
Basis for Revenue Recognition | ' | ||||
Basis for Revenue Recognition | |||||
The Company derives its revenue from licensing software products; providing maintenance and support services for those products; providing hosted software; and rendering software related and application services. Our software solutions are comprised of license fees, maintenance fees, subscription fees for hosted software and software related services fees. | |||||
The Company sometimes enters into arrangements that include both software related deliverables (licensed software products, maintenance services or software related services) and non-software deliverables (hosted software or application services). Our hosted software and application services do not qualify as software deliverables because our license grant does not allow the customer the right or capability to take possession of the software. For arrangements that contain both software and non-software deliverables, in accordance with ASC 605 “Revenue Recognition,” the Company allocates the arrangement consideration to the non-software deliverables as a group, and to the software deliverables as a group (the “Deliverable Groups”). The Company determines the selling price to allocate the arrangement consideration to the Deliverable Groups based on the following hierarchy of evidence: vendor specific objective evidence of selling price (“VSOE,” meaning price when sold separately) if available; third-party evidence of selling price if VSOE is not available; or best estimated selling price if neither VSOE nor third-party evidence is available. The Company currently is unable to establish VSOE or third-party evidence of selling price for either our software related deliverables or our non-software deliverables as a group. Therefore, the best estimate of selling price for each Deliverable Group is determined primarily by considering various factors, including, but not limited to stated renewal rates in a contract, if any, the historical selling price of these deliverables in similar stand-alone transactions and pricing practices. Total arrangement consideration is then allocated on the basis of the Deliverable Group’s relative selling price. | |||||
Once the Company has allocated the arrangement consideration between the Deliverable Groups, the Company recognizes revenue as described in the respective software license fees, maintenance fees, subscription fees, services fees and application services fees sections below. | |||||
In order for a transaction to be eligible for revenue recognition, the following revenue criteria must be met: persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable and collectability is reasonably assured. The Company evaluates collectability based on past customer history, external credit ratings and payment terms within customer agreements. | |||||
Software license fees | ' | ||||
Software license fees | |||||
The Company's software license agreements provide our customers with a right to use our software perpetually (perpetual licenses) or during a defined term (time-based licenses). | |||||
Assuming all revenue recognition criteria are met, perpetual license fee revenue is recognized using the residual method, under which the fair value, based on VSOE, of all undelivered elements of the agreement (i.e., maintenance and software related services) is deferred. VSOE is based on rates charged for maintenance and software related services when sold separately. The remaining portion of the fee is recognized as license fee revenue upon delivery of the products. | |||||
For revenue arrangements where there is a lack of VSOE for any undelivered elements, license fee revenue is deferred and recognized upon delivery of those elements or when VSOE can be established. However, when maintenance or software related services are the only undelivered elements, the license fee revenue is recognized on a ratable basis over the longer of the maintenance term or the period the software related services are expected to be performed. Such transactions include time-based licenses and certain unlimited capacity licenses, as the Company has not established VSOE for the undelivered elements in these arrangements. In order to comply with Regulation S-X, Rule 5-03(b), which requires product, services and other categories of revenue to be displayed separately on the income statement, the Company separates the license fee, maintenance fee and software related services fee associated with these types of arrangements based on its determination of fair value. The Company applies VSOE for maintenance related to perpetual license transactions and stand-alone software related services arrangements as a reasonable and consistent approximation of fair value to separate license fee, maintenance fee and software related services fee revenue for income statement classification purposes. | |||||
The Company offers flexibility to customers purchasing licenses for its products and related maintenance. Terms of these transactions range from standard perpetual license sales that include one year of maintenance to multi-year (generally two to five years), multi-product contracts. The Company allows deferred payment terms with installments collectable over the term of the contract. Based on the Company’s successful collection history for deferred payments, license fees (net of any financing fees) are generally recognized as revenue as discussed above. In certain transactions where it cannot be concluded that the fee is fixed or determinable due to the nature of the deferred payment terms, the Company recognizes revenue as payments become due. Financing fees are recognized as interest income over the term of the related receivable. | |||||
Maintenance Fees | ' | ||||
Maintenance fees | |||||
The Company’s maintenance arrangements allow customers to receive technical support and advice, including problem resolution services and assistance in product installation, error corrections and any product enhancements released during the maintenance period. The first year of maintenance is generally included with all license agreements. Maintenance fees are recognized ratably over the term of the maintenance arrangements, which generally range from one to five years. | |||||
Subscription fees | ' | ||||
Subscription fees | |||||
Subscription fees relate to arrangements that permit our customers to access and utilize our hosted software delivered on a software-as-a-service (“SaaS”) basis. Subscription fees are deferred upon contract execution and are recognized ratably over the term of the subscription. | |||||
Services fees | ' | ||||
Services fees | |||||
The Company offers implementation, consulting and training services in tandem with the Company’s software solutions. | |||||
Services fees are generally based on hourly or daily rates. Revenues from services are recognized in the period the services are performed provided that collection of the related receivable is reasonably assured. | |||||
Application services fees | ' | ||||
Application services fees | |||||
Our application services fees consist of fees related to our Covisint on-demand software including associated services. The arrangements do not provide customers the right to take possession of the software at any time, nor do the arrangements contain rights of return. Many of our application services contracts include a services project fee and a recurring fee for ongoing platform-as-a-service (“PaaS”) operations. Certain services related to these projects have stand-alone value (e.g., other vendors provide similar services) and qualify as a separate unit of accounting. Services that have stand-alone value are recognized as delivered. For those services that do not have stand-alone value, the revenue is deferred and recognized over the longer of the committed term of the subscription agreement (generally one to five years) or the expected period over which the customer will receive benefit (generally five years). For services rendered under fixed-price contracts, revenues are recognized using the proportional performance method and if it is determined that costs will exceed revenue, the expected loss is recorded at the time the loss becomes apparent. The recurring fees are recognized ratably over the applicable service period. | |||||
Deferred Revenue | ' | ||||
Deferred Revenue | |||||
Deferred revenue consists primarily of billed and unbilled maintenance and subscription fees related to the future service period of maintenance and subscription agreements in effect at the reporting date. Deferred license, software related services and application services fees are also included in deferred revenue for those arrangements that are being recognized over time. Sales commission costs that directly relate to revenue transactions that are deferred are recorded as “prepaid expenses and other current assets” or non-current “other assets”, as applicable, in the condensed consolidated balance sheets and recognized as "cost of application services" or “sales and marketing” expenses, as applicable, in the condensed consolidated statements of operations over the revenue recognition period of the related customer contracts. | |||||
Research and Development | ' | ||||
Research and Development | |||||
Research and development (“R&D”) costs from continuing operations, that include primarily the cost of programming personnel, amounted to $20.0 million and $21.7 million for the three months ended June 30, 2014 and 2013, respectively. R&D costs related to our software solutions are reported as “technology development and support” and for our application services network, the costs are reported as “cost of application services” in the condensed consolidated statements of operations. | |||||
Income Taxes | ' | ||||
Income Taxes | |||||
The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax bases of assets and liabilities and net operating loss and credit carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date. The Company does not permanently reinvest any earnings in its foreign subsidiaries and recognizes all deferred tax liabilities that arise from outside basis differences in its investment in subsidiaries. | |||||
The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. These deferred tax assets are subject to periodic assessments as to recoverability and if it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recorded which would increase the provision for income taxes. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. | |||||
Interest and penalties related to uncertain tax positions are included in the income tax provision. | |||||
The Company’s effective tax rate for the first quarter of fiscal year 2015 was 55.7% compared to (33.6%) for the first quarter of fiscal year 2014. The effective rate for the three months ended June 30, 2014, reflects a benefit due to the loss incurred and the recording of interest income resulting from a refund claim approved by the IRS during the quarter. The effective rate for the three months ended June 30, 2013, reflects the recording of a benefit related to stock compensation that was previously expected to not result in a tax deduction. This benefit resulted due to a change in the Company’s expectation regarding the tax deductibility of compensation for certain officers during the first quarter of fiscal year 2014. | |||||
Cash paid for income taxes was $18.7 million and $3.7 million for the first quarter of fiscal 2015 and 2014, respectively. | |||||
Recently Issued Accounting Pronouncements | ' | ||||
Recently Issued Accounting Pronouncements | |||||
In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-9, “Revenue from Contracts with Customers (Topic 606)”. This ASU supersedes the revenue recognition requirements in Accounting Standards Codification (“ASC”) 605, Revenue Recognition. ASU No. 2014-09 will require an entity to recognize revenue when it transfers promised goods or services to customers using a five-step model that requires entities to exercise judgment when considering the terms of the contracts. This ASU is effective for us beginning after April 1, 2017 and can be adopted either retrospectively to each prior reporting period presented or as a cumulative-effect adjustment as of the date of adoption. The Company has not yet evaluated the impact of the update on its financial statements. | |||||
In April 2014, the FASB issued ASU No. 2014-8, “Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360) — Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity.” ASU No. 2014-8 changes the requirements for reporting discontinued operations to only allow presentation of a disposal of an entity or component of an entity as a discontinued operation if it represents a strategic shift that has (or will have) a major effect on an entities operations or financial results. This ASU is effective for the first annual period beginning after December 15, 2014. The Company has not yet evaluated the impact of the update on its financial statements. | |||||
In March 2013, the FASB issued ASU No. 2013-05, “Foreign Currency Matters (Topic 830) — Parent’s Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity.” ASU No. 2013-05 resolves the diversity in practice about whether Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a business within a foreign entity. This ASU was effective prospectively for the first annual period beginning after December 15, 2013. The adoption of ASU No. 2013-05 did not have a significant impact on the Company’s consolidated balance sheet, statement of operations or cash flows. | |||||
In February 2013, the FASB issued ASU No. 2013-02, “Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income”. This ASU requires an entity to provide information about the amounts reclassified out of accumulated other comprehensive income by component. In addition, an entity is required to present, either on the face of the statement where net income is presented or in the notes, significant amounts reclassified out of accumulated other comprehensive income by the respective line items of net income but only if the amount reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures required under U.S. GAAP that provide additional detail about those amounts. The amendments in this Update supersede and replace the presentation requirements for reclassifications out of accumulated other comprehensive income in ASUs 2011-05 (issued in June 2011) and 2011-12 (issued in December 2011) for all public and private organizations. For public entities, the amendments of this ASU are effective prospectively for reporting periods beginning after December 15, 2012. The requirements of this ASU were adopted during the Company’s quarter ended March 31, 2013 and did not have a significant impact on its disclosures. |
Basis_of_Presentation_Tables
Basis of Presentation (Tables) | 3 Months Ended | ||||
Jun. 30, 2014 | |||||
Basis of Presentation [Abstract] | ' | ||||
Schedule of financial results included in income (loss) from discontinued operations | ' | ||||
The following table provides the financial results included in income from discontinued operations, net of tax during the periods presented (in thousands): | |||||
Three Months Ended | |||||
June 30, | |||||
2013 | |||||
Revenues | $ | 56,707 | |||
Operating expenses | 47,932 | ||||
Income from operations | 8,775 | ||||
Income tax provision | 3,070 | ||||
Income from discontinued operations, net of tax | $ | 5,705 | |||
Financing_Receivables_Tables
Financing Receivables (Tables) | 3 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Financing Receivables [Abstract] | ' | ||||||||||||||||||||
Aged analysis of products and loans financing receivables | ' | ||||||||||||||||||||
The following is an aged analysis of our products and loans financing receivables based on invoice dates as of June 30, 2014 and March 31, 2014 (in thousands): | |||||||||||||||||||||
As of June 30, 2014 | |||||||||||||||||||||
Greater than | |||||||||||||||||||||
0-29 days | 30-90 days | 90 days | Total | ||||||||||||||||||
past | past | past | financing | ||||||||||||||||||
invoice date | invoice date | invoice date | Unbilled | receivables | |||||||||||||||||
Pass rating | |||||||||||||||||||||
Software products | $ | 1,674 | $ | 670 | $ | 90 | $ | 38,277 | $ | 40,711 | |||||||||||
As of March 31, 2014 | |||||||||||||||||||||
Greater than | |||||||||||||||||||||
0-29 days | 30-90 days | 90 days | Total | ||||||||||||||||||
past | past | past | financing | ||||||||||||||||||
invoice date | invoice date | invoice date | Unbilled | receivables | |||||||||||||||||
Pass rating | |||||||||||||||||||||
Software products | $ | 2,684 | $ | 628 | $ | 26 | $ | 33,807 | $ | 37,145 |
Fair_Value_of_Assets_and_Liabi1
Fair Value of Assets and Liabilities (Tables) | 3 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Fair Value of Assets and Liabilities [Abstract] | ' | ||||||||||||||||
Fair Value of Assets and Liabilities | ' | ||||||||||||||||
The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis (in thousands): | |||||||||||||||||
As of June 30, 2014 | |||||||||||||||||
Quoted Prices in | Significant | Significant | |||||||||||||||
Active Markets for | Other Observable | Unobservable | |||||||||||||||
Estimated | Identical Assets | Inputs | Inputs | ||||||||||||||
Fair Value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Assets: | |||||||||||||||||
Cash equivalents - money market funds | $ | 191,419 | $ | 191,419 | - | - | |||||||||||
As of March 31, 2014 | |||||||||||||||||
Quoted Prices in | Significant | Significant | |||||||||||||||
Active Markets for | Other Observable | Unobservable | |||||||||||||||
Estimated | Identical Assets | Inputs | Inputs | ||||||||||||||
Fair Value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||
Assets: | |||||||||||||||||
Cash equivalents - money market funds | $ | 232,252 | $ | 232,252 | - | - | |||||||||||
Liabilities: | |||||||||||||||||
Foreign exchange derivatives | $ | 39 | - | $ | 39 | - |
Computation_of_Earnings_per_Co1
Computation of Earnings per Common Share (Tables) | 3 Months Ended | ||||||||
Jun. 30, 2014 | |||||||||
Computation of Earnings per Common Share [Abstract] | ' | ||||||||
Computation of Earnings per Common Share | ' | ||||||||
Earnings per common share data were computed as follows (in thousands, except per share amounts): | |||||||||
Three Months Ended June 30, | |||||||||
2014 | 2013 | ||||||||
Amounts attributable to Compuware common shareholders | |||||||||
Income (loss) from continuing operations | $ | (1,356 | ) | $ | 4,262 | ||||
Loss attributable to non-controlling interests | (1,408 | ) | - | ||||||
Income from continuing operations, net of tax | 52 | 4,262 | |||||||
Income from discontinued operations, net of tax | - | 5,705 | |||||||
Net income attributable to Compuware Corporation common shareholders | $ | 52 | $ | 9,967 | |||||
Basic earnings per share: | |||||||||
Continuing operations | 0 | 0.02 | |||||||
Discontinued operations | 0 | 0.03 | |||||||
Basic earnings per share | $ | 0 | $ | 0.05 | |||||
Weighted-average common shares outstanding | 219,667 | 213,640 | |||||||
Diluted earnings per share: | |||||||||
Continuing operations | 0 | 0.02 | |||||||
Discontinued operations | 0 | 0.03 | |||||||
Diluted earnings per share | $ | 0 | $ | 0.05 | |||||
Weighted-average common shares outstanding | 219,667 | 213,640 | |||||||
Dilutive effect of stock awards | 3,680 | 6,054 | |||||||
Total shares | 223,347 | 219,694 |
Stock_Benefit_Plans_and_StockB1
Stock Benefit Plans and Stock-Based Compensation (Tables) | 3 Months Ended | ||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||||||||
Weighted average fair value of stock options granted and assumptions used to estimate fair value | ' | ||||||||||||||||
The weighted average fair value of stock options granted during the periods and the assumptions used to estimate those values using the Black-Scholes option pricing model were as follows: | |||||||||||||||||
Three Months Ended | |||||||||||||||||
June 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Expected volatility | 33.61 | % | 39.24 | % | |||||||||||||
Risk-free interest rate | 1.84 | % | 1.54 | % | |||||||||||||
Expected lives at date of grant (in years) | 5.6 | 7.5 | |||||||||||||||
Weighted-average fair value of the options granted | $ | 1.97 | $ | 2.82 | |||||||||||||
Dividend yield assumption | 4.91 | % | 4.41 | % | |||||||||||||
Stock award compensation expense | ' | ||||||||||||||||
Stock award compensation expense was allocated as follows (in thousands): | |||||||||||||||||
Three Months Ended | |||||||||||||||||
June 30, | |||||||||||||||||
2014 | 2013 | ||||||||||||||||
Stock-based compensation classified as: | |||||||||||||||||
Cost of maintenance fees | $ | 93 | $ | 178 | |||||||||||||
Cost of subscription fees | 28 | 29 | |||||||||||||||
Cost of services | 9 | 20 | |||||||||||||||
Cost of application services | 2,619 | 486 | |||||||||||||||
Technology development and support | 267 | 574 | |||||||||||||||
Sales and marketing | 1,894 | 2,770 | |||||||||||||||
Administrative and general | 3,890 | 4,517 | |||||||||||||||
Restructuring costs | - | 1,791 | |||||||||||||||
Discontinued operations | - | 72 | |||||||||||||||
Total stock-based compensation expense before income tax provision | $ | 8,800 | $ | 10,437 | |||||||||||||
Stock Options - Service-Based Vesting [Member] | ' | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||||||||
Summary of stock option activity | ' | ||||||||||||||||
A summary of activity for options that vest based on service conditions only under the Company’s stock-based compensation plans as of June 30, 2014, and changes during the three months then ended is presented below (shares and intrinsic value in thousands): | |||||||||||||||||
Three Months Ended | |||||||||||||||||
30-Jun-14 | |||||||||||||||||
Weighted | |||||||||||||||||
Weighted | Average | ||||||||||||||||
Average | Remaining | Aggregate | |||||||||||||||
Number of | Exercise | Contractual | Intrinsic | ||||||||||||||
Options | Price | Term in Years | Value | ||||||||||||||
Options outstanding as of March 31, 2014 | 14,236 | $ | 8.8 | ||||||||||||||
Granted | 2,269 | 9.98 | |||||||||||||||
Exercised | (308 | ) | 7.85 | $ | 673 | ||||||||||||
Forfeited | (25 | ) | 10.19 | ||||||||||||||
Cancelled/expired | (25 | ) | 9.35 | ||||||||||||||
Options outstanding as of June 30, 2014 | 16,147 | $ | 8.98 | 6.76 | $ | 18,756 | |||||||||||
Options vested and expected to vest, net of estimated forfeitures, as of June 30, 2014 | 15,444 | $ | 8.93 | 6.65 | $ | 18,655 | |||||||||||
Options exercisable as of June 30, 2014 | 10,107 | $ | 8.56 | 5.65 | $ | 15,550 | |||||||||||
Stock Options - Performance and Service-Based Vesting [Member] | ' | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||||||||
Summary of stock option activity | ' | ||||||||||||||||
A summary of activity for options that vest based on the achievement of both service and performance conditions under the Company’s stock-based compensation plans as of June 30, 2014, and changes during the three months then ended is presented below (shares and intrinsic value in thousands): | |||||||||||||||||
Three Months Ended | |||||||||||||||||
30-Jun-14 | |||||||||||||||||
Weighted | |||||||||||||||||
Weighted | Average | ||||||||||||||||
Average | Remaining | Aggregate | |||||||||||||||
Number of | Exercise | Contractual | Intrinsic | ||||||||||||||
Options | Price | Term in Years | Value | ||||||||||||||
Options outstanding as of March 31, 2014 | 2,150 | $ | 10.07 | ||||||||||||||
Granted | 887 | 10.36 | |||||||||||||||
Forfeited/Cancelled | (668 | ) | 9.83 | ||||||||||||||
Options outstanding as of June 30, 2014 | 2,369 | $ | 10.25 | 8.85 | $ | 225 | |||||||||||
Options vested and expected to vest, net of estimated forfeitures, as of June 30, 2014 | 887 | $ | 10.36 | 9.84 | $ | - | |||||||||||
Options exercisable as of June 30, 2014 | - | $ | - | - | $ | - | |||||||||||
Non-vested RSU [Member] | ' | ||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ||||||||||||||||
Summary of non-vested restricted stock units and performance-based restricted stock unit awards activity | ' | ||||||||||||||||
A summary of non-vested restricted stock units (“RSUs”) and performance-based stock awards (“PSAs” and collectively “Non-vested RSU”) activity under the Company’s LTIP as of June 30, 2014, and changes during the three months then ended is presented below (shares and intrinsic value in thousands): | |||||||||||||||||
Three Months Ended | |||||||||||||||||
30-Jun-14 | |||||||||||||||||
Weighted | |||||||||||||||||
Average | Aggregate | ||||||||||||||||
Grant-Date | Intrinsic | ||||||||||||||||
Shares | Fair Value | Value | |||||||||||||||
Non-vested RSU outstanding as of March 31, 2014 | 2,124 | ||||||||||||||||
Granted | 1,317 | $ | 10.16 | ||||||||||||||
Dividend Equivalents Issued | 32 | 9.98 | |||||||||||||||
Released | (343 | ) | $ | 3,270 | |||||||||||||
Forfeited | (13 | ) | |||||||||||||||
Non-vested RSU outstanding as of June 30, 2014 | 3,117 |
Goodwill_Capitalized_Software_1
Goodwill, Capitalized Software and Other Intangible Assets (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||||||
Goodwill, Capitalized Software and Other Intangible Assets [Abstract] | ' | ||||||||||||||||||||||||
Change in carrying amount of goodwill by reportable unit | ' | ||||||||||||||||||||||||
The changes in the carrying amount of goodwill by reporting unit during the three months ended June 30, 2014 are summarized as follows (in thousands): | |||||||||||||||||||||||||
APM | MF | AS | Total | ||||||||||||||||||||||
Goodwill as of March 31, 2014 | $ | 482,857 | $ | 140,304 | $ | 25,385 | $ | 648,546 | |||||||||||||||||
Effect of foreign currency translation | (1,101 | ) | - | - | (1,101 | ) | |||||||||||||||||||
Goodwill as of June 30, 2014 | $ | 481,756 | $ | 140,304 | $ | 25,385 | $ | 647,445 | |||||||||||||||||
Components of capitalized software and other intangible assets | ' | ||||||||||||||||||||||||
The components of the Company’s capitalized software and other intangible assets are as follows (in thousands): | |||||||||||||||||||||||||
As of June 30, 2014 | |||||||||||||||||||||||||
Gross Carrying | Accumulated | Net Carrying | |||||||||||||||||||||||
Amount | Amortization | Amount | |||||||||||||||||||||||
Unamortized intangible assets: | |||||||||||||||||||||||||
Trademarks | $ | 358 | $ | 358 | |||||||||||||||||||||
Amortized intangible assets: | |||||||||||||||||||||||||
Capitalized software | |||||||||||||||||||||||||
Internally developed | 232,237 | $ | (170,993 | ) | 61,244 | ||||||||||||||||||||
Purchased | 122,243 | (108,742 | ) | 13,501 | |||||||||||||||||||||
Customer relationship | 46,980 | (25,215 | ) | 21,765 | |||||||||||||||||||||
Other | 20,479 | (20,479 | ) | - | |||||||||||||||||||||
Total amortized intangible assets | $ | 421,939 | $ | (325,429 | ) | $ | 96,510 | ||||||||||||||||||
As of March 31, 2014 | |||||||||||||||||||||||||
Gross Carrying | Accumulated | Net Carrying | |||||||||||||||||||||||
Amount | Amortization | Amount | |||||||||||||||||||||||
Unamortized intangible assets: | |||||||||||||||||||||||||
Trademarks | $ | 358 | $ | 358 | |||||||||||||||||||||
Amortized intangible assets: | |||||||||||||||||||||||||
Capitalized software | |||||||||||||||||||||||||
Internally developed | 225,249 | $ | (165,720 | ) | 59,529 | ||||||||||||||||||||
Purchased | 122,396 | (107,116 | ) | 15,280 | |||||||||||||||||||||
Customer relationship | 47,000 | (24,185 | ) | 22,815 | |||||||||||||||||||||
Other | 20,530 | (19,750 | ) | 780 | |||||||||||||||||||||
Total amortized intangible assets | $ | 415,175 | $ | (316,771 | ) | $ | 98,404 | ||||||||||||||||||
Amortization expense of capitalized software, customer relationship and other intangible assets | ' | ||||||||||||||||||||||||
Amortization expense of capitalized software, customer relationship and other intangible assets was as follows (in thousands): | |||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||
June 30, | |||||||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||||||
Amortized intangible assets: | |||||||||||||||||||||||||
Capitalized software | |||||||||||||||||||||||||
Internally developed | $ | 5,274 | $ | 4,536 | |||||||||||||||||||||
Purchased | 1,714 | 2,370 | |||||||||||||||||||||||
Customer relationship | 1,035 | 1,031 | |||||||||||||||||||||||
Other | 780 | 762 | |||||||||||||||||||||||
Total amortization expense | $ | 8,803 | $ | 8,699 | |||||||||||||||||||||
Expected future annual amortization expense | ' | ||||||||||||||||||||||||
Based on the capitalized software, customer relationship and other intangible assets recorded through June 30, 2014, the annual amortization expense over the next five fiscal years and thereafter is expected to be as follows (in thousands): | |||||||||||||||||||||||||
Fiscal Year Ended March 31, | |||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | ||||||||||||||||||||
Amortized intangible assets: | |||||||||||||||||||||||||
Capitalized software | $ | 28,157 | $ | 25,481 | $ | 15,908 | $ | 8,165 | $ | 3,561 | $ | 461 | |||||||||||||
Customer relationship | 4,141 | 4,140 | 3,976 | 3,832 | 3,832 | 2,879 | |||||||||||||||||||
Other | 780 | ||||||||||||||||||||||||
Total amortization expense | $ | 33,078 | $ | 29,621 | $ | 19,884 | $ | 11,997 | $ | 7,393 | $ | 3,340 |
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Segment Information [Abstract] | ' | ||||||||||||||||||||
Financial information for business segments | ' | ||||||||||||||||||||
Financial information for the Company’s business segments was as follows (in thousands): | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
30-Jun-14 | |||||||||||||||||||||
Unallocated | |||||||||||||||||||||
Expenses & | |||||||||||||||||||||
APM | MF | AS | Eliminations (1) | Total | |||||||||||||||||
Software license fees | $ | 21,387 | $ | 5,300 | $ | 26,687 | |||||||||||||||
Maintenance fees | 28,295 | 60,165 | 88,460 | ||||||||||||||||||
Subscription fees | 19,362 | 19,362 | |||||||||||||||||||
Services fees | 8,332 | 82 | 8,414 | ||||||||||||||||||
Application service fees | 21,587 | 21,587 | |||||||||||||||||||
Total revenues | 77,376 | 65,547 | 21,587 | 164,510 | |||||||||||||||||
Operating expenses | 75,633 | 17,116 | 33,392 | 41,655 | 167,796 | ||||||||||||||||
Contribution / operating | $ | 1,743 | $ | 48,431 | $ | (11,805 | ) | $ | (41,655 | ) | $ | (3,286 | ) | ||||||||
-1 | Unallocated operating expenses include $3.0 million in restructuring expenses. See note 9 for additional information. | ||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
30-Jun-13 | |||||||||||||||||||||
Unallocated | |||||||||||||||||||||
Expenses | |||||||||||||||||||||
APM | MF | AS | & Eliminations (1) | Total | |||||||||||||||||
Software license fees | $ | 23,530 | (2) | $ | 8,213 | (2) | $ | $ | $ | 31,743 | |||||||||||
Maintenance fees | 23,801 | (2) | 63,361 | (2) | 87,162 | ||||||||||||||||
Subscription fees | 20,132 | 20,132 | |||||||||||||||||||
Services fees | 7,602 | 69 | 7,671 | ||||||||||||||||||
Application service fees | 24,101 | 24,101 | |||||||||||||||||||
Total revenues | 75,065 | 71,643 | 24,101 | 170,809 | |||||||||||||||||
Operating expenses | 74,411 | (2) | 18,811 | (2) | 25,423 | 49,175 | 167,820 | ||||||||||||||
Contribution / operating | $ | 654 | $ | 52,832 | $ | (1,322 | ) | $ | (49,175 | ) | $ | 2,989 | |||||||||
-1 | Unallocated operating expenses include $4.8 million in restructuring expenses. See note 9 for additional information. | ||||||||||||||||||||
-2 | Prior year amounts have been reclassified to reflect the transition of APM for Mainframe from the Mainframe segment to the APM segment. | ||||||||||||||||||||
Financial information regarding geographic operations | ' | ||||||||||||||||||||
Financial information regarding geographic operations is presented in the table below (in thousands): | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
June 30, | |||||||||||||||||||||
2014 | 2013 | ||||||||||||||||||||
Revenues: | |||||||||||||||||||||
United States | $ | 96,121 | $ | 99,303 | |||||||||||||||||
Europe and Africa | 41,247 | 42,111 | |||||||||||||||||||
Other international operations | 27,142 | 29,395 | |||||||||||||||||||
Total revenues | $ | 164,510 | $ | 170,809 | |||||||||||||||||
As of | As of | ||||||||||||||||||||
June 30, | March 31, | ||||||||||||||||||||
2014 | 2014 | ||||||||||||||||||||
Long-lived assets | |||||||||||||||||||||
United States | $ | 784,040 | $ | 785,403 | |||||||||||||||||
Austria | 208,157 | 210,755 | |||||||||||||||||||
Other | 13,100 | 14,210 | |||||||||||||||||||
Total long-lived assets | $ | 1,005,297 | $ | 1,010,368 |
Restructuring_charges_Tables
Restructuring charges (Tables) | 3 Months Ended | ||||||||||||||||||||
Jun. 30, 2014 | |||||||||||||||||||||
Restructuring Charges [Abstract] | ' | ||||||||||||||||||||
Restructuring activity | ' | ||||||||||||||||||||
The following table summarizes the restructuring accrual as of March 31, 2014 and changes to the accrual during the three months ended June 30, 2014 (in thousands): | |||||||||||||||||||||
Employee | Lease | Total | |||||||||||||||||||
Termination | Abandonment | Restructuring | |||||||||||||||||||
Benefits | Costs | Other | Activity | ||||||||||||||||||
Accrual at March 31, 2014 | $ | 3,031 | $ | 1,544 | $ | 17 | $ | 4,592 | |||||||||||||
Restructuring charge | 2,350 | 557 | 68 | 2,975 | |||||||||||||||||
Payments | (2,487 | ) | (884 | ) | (17 | ) | (3,388 | ) | |||||||||||||
Accrual at June 30, 2014 | $ | 2,894 | $ | 1,217 | $ | 68 | $ | 4,179 | |||||||||||||
Employee termination benefits | ' | ||||||||||||||||||||
Restructuring charges across the business segments were as follows (in thousands): | |||||||||||||||||||||
Quarter Ended | |||||||||||||||||||||
30-Jun-14 | |||||||||||||||||||||
Unallocated | |||||||||||||||||||||
APM | MF | AS | Expenses | Total | |||||||||||||||||
Employee termination benefits | $ | 759 | $ | 230 | $ | - | $ | 1,361 | $ | 2,350 | |||||||||||
Lease abandonment costs | - | - | - | 557 | 557 | ||||||||||||||||
Other | - | - | - | 68 | 68 | ||||||||||||||||
Total restructuring charges | $ | 759 | $ | 230 | $ | - | $ | 1,986 | $ | 2,975 |
Basis_of_Presentation_Details
Basis of Presentation (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Share data in Millions, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Dec. 31, 2013 | Mar. 31, 2014 |
Discontinued Operation [Abstract] | ' | ' | ' | ' |
Proceeds (Payment) from sale of business in cash | ($8,046,000) | $0 | $112,000,000 | ' |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ' | ' | ' | ' |
Revenues | ' | 56,707,000 | ' | ' |
Operating expenses | ' | 47,932,000 | ' | ' |
Income from operations | ' | 8,775,000 | ' | ' |
Income tax provision | ' | 3,070,000 | ' | ' |
Income from discontinued operations, net of tax | 0 | 5,705,000 | ' | ' |
Noncontrolling Interest [Abstract] | ' | ' | ' | ' |
Increase of non-controlling interest | 23,000,000 | ' | ' | ' |
Increase in additional paid in capital | 43,300 | ' | ' | ' |
Non-controlling interest | 15,947,000 | ' | ' | 20,256,000 |
Economic interest (in hundredths) | 83.47% | ' | ' | ' |
Convisint shares purchased (in shares) | 1.4 | ' | ' | ' |
Ownership percentage of Covisint Corporatio (in hundredths) | 80.00% | ' | ' | ' |
Basis for Revenue Recognition [Abstract] | ' | ' | ' | ' |
Standard perpetual license sales, minimum term of maintenance agreement | '1 year | ' | ' | ' |
Multi-product contracts, minimum term of maintenance agreement | '2 years | ' | ' | ' |
Multi-product contracts, maximum term of maintenance agreement | '5 years | ' | ' | ' |
Maintenance fees [Abstract] | ' | ' | ' | ' |
Minimum term over which maintenance fees ratably recognized | '1 year | ' | ' | ' |
Maximum term over which maintenance fees ratably recognized | '5 years | ' | ' | ' |
Application services fees [Abstract] | ' | ' | ' | ' |
Minimum term of customer arrangement for professional services without stand-alone value | '1 year | ' | ' | ' |
Maximum term of customer arrangement for professional services without stand-alone value | '5 years | ' | ' | ' |
Expected period over which customer will receive benefit | '5 years | ' | ' | ' |
Research and development [Abstract] | ' | ' | ' | ' |
Research and development costs | 20,000,000 | 21,700,000 | ' | ' |
Income Taxes [Abstract] | ' | ' | ' | ' |
Effective tax rate (in hundredths) | 55.70% | -33.60% | ' | ' |
Cash paid for income taxes | $18,700,000 | $3,700,000 | ' | ' |
Financing_Receivables_Details
Financing Receivables (Details) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Mar. 31, 2014 | |
Financing Receivables [Abstract] | ' | ' |
Minimum finance receivable deferred payment term | '1 year | ' |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ' | ' |
Allowance for credit losses on financing receivables | $0 | $0 |
Pass Rating [Member] | Software products [Member] | ' | ' |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ' | ' |
0-29 days past invoice date | 1,674,000 | 2,684,000 |
30-90 days past invoice date | 670,000 | 628,000 |
Greater than 90 days past invoice date | 90,000 | 26,000 |
Unbilled | 38,277,000 | 33,807,000 |
Total financing receivables | $40,711,000 | $37,145,000 |
Foreign_Currency_Transactions_1
Foreign Currency Transactions and Derivatives (Details) (USD $) | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 | |
Derivative [Line Items] | ' | ' | ' |
Foreign currency net gains or (losses) resulting from assets and liabilities denominated in non-local currency and current inter-company balances | $205,000 | $544,000 | ' |
Hedging transaction net (loss) from foreign exchange derivative contracts | -218,000 | 10,000 | ' |
Derivative, maturity date | 31-Jul-14 | ' | 30-Apr-13 |
Purchase [Member] | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' |
Amount of derivative contracts | 17,400,000 | ' | 24,100,000 |
Sale [Member] | ' | ' | ' |
Derivative [Line Items] | ' | ' | ' |
Amount of derivative contracts | $4,800,000 | ' | 3,100,000 |
Fair_Value_of_Assets_and_Liabi2
Fair Value of Assets and Liabilities (Details) (Recurring Basis [Member], USD $) | Jun. 30, 2014 | Mar. 31, 2014 |
In Thousands, unless otherwise specified | ||
Estimated Fair Value [Member] | ' | ' |
Assets: | ' | ' |
Cash equivalents - money market funds | $191,419 | $232,252 |
Liabilities: | ' | ' |
Foreign exchange derivatives | ' | 39 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ' | ' |
Assets: | ' | ' |
Cash equivalents - money market funds | 191,419 | 232,252 |
Liabilities: | ' | ' |
Foreign exchange derivatives | ' | 0 |
Significant Other Observable Inputs (Level 2) [Member] | ' | ' |
Assets: | ' | ' |
Cash equivalents - money market funds | 0 | 0 |
Liabilities: | ' | ' |
Foreign exchange derivatives | ' | 39 |
Significant Unobservable Inputs (Level 3) [Member] | ' | ' |
Assets: | ' | ' |
Cash equivalents - money market funds | 0 | 0 |
Liabilities: | ' | ' |
Foreign exchange derivatives | ' | $0 |
Computation_of_Earnings_per_Co2
Computation of Earnings per Common Share (Details) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 |
Computation of Earnings per Common Share [Abstract] | ' | ' |
Income (loss) from continuing operations | ($1,356) | $4,262 |
Loss attributable to non-controlling interests | -1,408 | 0 |
Income from continuing operations, net of tax | 52 | 4,262 |
Income from discontinued operations net of tax | 0 | 5,705 |
NET INCOME ATTRIBUTABLE TO COMPUWARE CORPORATION | $52 | $9,967 |
Basic earnings per share [Abstract] | ' | ' |
Continuing operations (in dollars per share) | $0 | $0.02 |
Discontinued operations (in dollars per share) | $0 | ($0.03) |
Basic earnings per share (in dollars per share) | $0 | $0.05 |
Weighted-average common shares outstanding (in shares) | 219,667,000 | 213,640,000 |
Diluted earnings per share | ' | ' |
Continuing operations (in dollars per share) | $0 | $0.02 |
Discontinued operations (in dollars per share) | $0 | $0.03 |
Diluted earnings per share (in dollars per share) | $0 | $0.05 |
Weighted-average common shares outstanding (in shares) | 219,667,000 | 213,640,000 |
Dilutive effect of stock awards (in shares) | 3,680,000 | 6,054,000 |
Total shares (in shares) | 223,347,000 | 219,694,000 |
Anti-dilutive shares related to stock awards excluded from EPS calculation (in shares) | 3,900,000 | 2,200,000 |
Performance shares not included in EPS (in shares) | 2,600,000 | 5,400,000 |
Stock_Benefit_Plans_and_StockB2
Stock Benefit Plans and Stock-Based Compensation (Details) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Percent company match for employee 401(k) contributions (in hundredths) | 33.00% | ' |
Limit on percent company match for employee 401(k) contributions (in hundredths) | 2.00% | ' |
Maximum vesting percentage 401(k) (in hundredths) | 100.00% | ' |
Years of service to be fully vested in 401(k) matching contributions | '3 years | ' |
Aggregate Intrinsic Value [Abstract] | ' | ' |
Total stock-based compensation expense before income taxes | $8,800,000 | $10,437,000 |
Unrecognized compensation cost, net of estimated forfeitures | 36,800,000 | ' |
Unrecognized compensation cost, weighted-average period of recognition | '1 year 11 months 12 days | ' |
Cost of maintenance fees [Member] | ' | ' |
Aggregate Intrinsic Value [Abstract] | ' | ' |
Total stock-based compensation expense before income taxes | 93,000 | 178,000 |
Cost of subscription fees [Member] | ' | ' |
Aggregate Intrinsic Value [Abstract] | ' | ' |
Total stock-based compensation expense before income taxes | 28,000 | 29,000 |
Cost of services [Member] | ' | ' |
Aggregate Intrinsic Value [Abstract] | ' | ' |
Total stock-based compensation expense before income taxes | 9,000 | 20,000 |
Cost of application services [Member] | ' | ' |
Aggregate Intrinsic Value [Abstract] | ' | ' |
Total stock-based compensation expense before income taxes | 2,619,000 | 486,000 |
Technology development and support [Member] | ' | ' |
Aggregate Intrinsic Value [Abstract] | ' | ' |
Total stock-based compensation expense before income taxes | 267,000 | 574,000 |
Sales and marketing [Member] | ' | ' |
Aggregate Intrinsic Value [Abstract] | ' | ' |
Total stock-based compensation expense before income taxes | 1,894,000 | 2,770,000 |
Administrative and general [Member] | ' | ' |
Aggregate Intrinsic Value [Abstract] | ' | ' |
Total stock-based compensation expense before income taxes | 3,890,000 | 4,517,000 |
Restructuring costs [Member] | ' | ' |
Aggregate Intrinsic Value [Abstract] | ' | ' |
Total stock-based compensation expense before income taxes | 0 | 1,791,000 |
Discontinued Operation [Member] | ' | ' |
Aggregate Intrinsic Value [Abstract] | ' | ' |
Total stock-based compensation expense before income taxes | 0 | 72,000 |
Stock Options [Member] | ' | ' |
Stock options, weighted average fair value assumptions [Abstract] | ' | ' |
Expected volatility (in hundredths) | 33.61% | 39.24% |
Risk-free interest rate (in hundredths) | 1.84% | 1.54% |
Expected lives at date of grant (in years) | '5 years 7 months 6 days | '7 years 6 months |
Weighted-average fair value of the options granted | $1.97 | $2.82 |
Dividend yield assumption | 4.91% | 4.41% |
Fair value of stock options vested (in dollars per share) | $3.91 | $4.19 |
Stock Options - Service-Based Vesting [Member] | ' | ' |
Stock option activity [Roll Forward] | ' | ' |
Options outstanding, beginning of period (in shares) | 14,236,000 | ' |
Granted (in shares) | 2,269,000 | ' |
Exercised (in shares) | -308,000 | ' |
Forfeited (in shares) | -25,000 | ' |
Cancelled/expired (in shares) | -25,000 | ' |
Options outstanding, end of period (in shares) | 16,147,000 | ' |
Options vested and expected to vest, net of estimated forfeitures, as of end of period (in shares) | 15,444,000 | ' |
Options exercisable as of end of period (in shares) | 10,107,000 | ' |
Weighted average exercise price [Abstract] | ' | ' |
Options outstanding (in dollars per share) | $8.80 | ' |
Granted (in dollars per share) | $9.98 | ' |
Exercised (in dollars per share) | $7.85 | ' |
Forfeited/cancelled (in dollars per share) | $10.19 | ' |
Cancelled/expired (in dollars per share) | $9.35 | ' |
Options outstanding as of end of period (in dollars per share) | $8.98 | ' |
Options vested and expected to vest, net of estimated forfeitures, as of end of period (in dollars per share) | $8.93 | ' |
Options exercisable as of end of period (in dollars per share) | $8.56 | ' |
Weighted average remaining contractual term [Abstract] | ' | ' |
Options outstanding as of end of period | '6 years 9 months 4 days | ' |
Options vested and expected to vest, net of estimated forfeitures, as of end of period | '6 years 7 months 24 days | ' |
Options exercisable as of end of period | '5 years 7 months 24 days | ' |
Aggregate intrinsic value [Abstract] | ' | ' |
Exercised | 673,000 | ' |
Options outstanding as of end of period | 18,756,000 | ' |
Options vested and expected to vest, net of estimated forfeitures, as of end of period | 18,655,000 | ' |
Options exercisable as of end of period | 15,550,000 | ' |
Stock Options - Performance and Service-Based Vesting [Member] | ' | ' |
Stock option activity [Roll Forward] | ' | ' |
Options outstanding, beginning of period (in shares) | 2,150,000 | ' |
Granted (in shares) | 887,000 | ' |
Forfeitures/cancelled (in shares) | -668,000 | ' |
Options outstanding, end of period (in shares) | 2,369,000 | ' |
Options vested and expected to vest, net of estimated forfeitures, as of end of period (in shares) | 887,000 | ' |
Options exercisable as of end of period (in shares) | 0 | ' |
Weighted average exercise price [Abstract] | ' | ' |
Options outstanding (in dollars per share) | $10.07 | ' |
Granted (in dollars per share) | $10.36 | ' |
Forfeited/cancelled (in dollars per share) | $9.83 | ' |
Options outstanding as of end of period (in dollars per share) | $10.25 | ' |
Options vested and expected to vest, net of estimated forfeitures, as of end of period (in dollars per share) | $10.36 | ' |
Options exercisable as of end of period (in dollars per share) | $0 | ' |
Weighted average remaining contractual term [Abstract] | ' | ' |
Options outstanding as of end of period | '8 years 10 months 6 days | ' |
Options vested and expected to vest, net of estimated forfeitures, as of end of period | '9 years 10 months 2 days | ' |
Options exercisable as of end of period | '0 days | ' |
Aggregate intrinsic value [Abstract] | ' | ' |
Options outstanding as of end of period | 225,000 | ' |
Options vested and expected to vest, net of estimated forfeitures, as of end of period | 0 | ' |
Options exercisable as of end of period | 0 | ' |
Non-vested restricted stock units and performance-based restricted stock unit awards [Roll Forward] | ' | ' |
Non-vested awards outstanding as of end of period (in shares) | 2,400,000 | ' |
Aggregate Intrinsic Value [Abstract] | ' | ' |
Total stock-based compensation expense before income taxes | 119,000 | ' |
Unrecognized compensation cost, net of estimated forfeitures | ' | 5,200,000 |
Unrecognized compensation cost, weighted-average period of recognition | ' | '1 year 5 months 8 days |
Performance-based Restricted Stock Unit Awards [Member] | ' | ' |
Non-vested restricted stock units and performance-based restricted stock unit awards [Roll Forward] | ' | ' |
Granted (in shares) | 252,700 | ' |
Dividend Equivalents Issued (in shares) | 32,000 | 45,000 |
Non-vested awards outstanding as of end of period (in shares) | 268,532 | ' |
Covisint LTIP (2009) [Member] | Stock Options [Member] | ' | ' |
Stock option activity [Roll Forward] | ' | ' |
Options outstanding, end of period (in shares) | 4,400,000 | ' |
LTIP (2007) [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Maximum percentage of employee compensation allowed to be withheld (in hundredths) | 10.00% | ' |
Discount rate for purchase of common stock (in hundredths) | 5.00% | ' |
LTIP (2007) [Member] | Non-vested RSU [Member] | ' | ' |
Non-vested restricted stock units and performance-based restricted stock unit awards [Roll Forward] | ' | ' |
Non-vested awards outstanding as of beginning of period (in shares) | 2,124,000 | ' |
Granted (in shares) | 1,317,000 | ' |
Dividend Equivalents Issued (in shares) | 32,000 | ' |
Released (in shares) | -343,000 | ' |
Forfeited (in shares) | -13,000 | ' |
Non-vested awards outstanding as of end of period (in shares) | 3,117,000 | ' |
Weighted Average Grant-Date Fair Value [Abstract] | ' | ' |
Granted (in dollars per share) | $10.16 | ' |
Dividend Equivalents Issue (in dollars per share) | $9.98 | ' |
Aggregate Intrinsic Value [Abstract] | ' | ' |
Released | 3,270,000 | ' |
Employee Stock Purchase Plan [Member] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' |
Expense recognized related to 401(k) program | $877,000 | $884,000 |
Goodwill_Capitalized_Software_2
Goodwill, Capitalized Software and Other Intangible Assets (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 |
Goodwill [Line Items] | ' | ' | ' |
Goodwill as of beginning of period | $648,546 | ' | ' |
Effect of foreign currency translation | -1,101 | ' | ' |
Goodwill as of end of period | 647,445 | ' | ' |
Capitalized software and other intangible assets [Abstract] | ' | ' | ' |
Gross Carrying Amount, amortized intangible assets | 421,939 | ' | 415,175 |
Accumulated Amortization | -325,429 | ' | -316,771 |
Net Carrying Amount, amortized intangible assets | 96,510 | ' | 98,404 |
Amortization expense of finite-lived intangible assets [Abstract] | ' | ' | ' |
Amortization Expense | 8,803 | 8,699 | ' |
Future amortization expense of finite-lived intangible assets [Abstract] | ' | ' | ' |
2015 | 33,078 | ' | ' |
2016 | 29,621 | ' | ' |
2017 | 19,884 | ' | ' |
2018 | 11,997 | ' | ' |
2019 | 7,393 | ' | ' |
Thereafter | 3,340 | ' | ' |
Capitalized Software [Member] | ' | ' | ' |
Capitalized software and other intangible assets [Abstract] | ' | ' | ' |
Amortization period | '5 years | ' | ' |
Future amortization expense of finite-lived intangible assets [Abstract] | ' | ' | ' |
2015 | 28,157 | ' | ' |
2016 | 25,481 | ' | ' |
2017 | 15,908 | ' | ' |
2018 | 8,165 | ' | ' |
2019 | 3,561 | ' | ' |
Thereafter | 461 | ' | ' |
Capitalized Software [Member] | Internally Developed [Member] | ' | ' | ' |
Capitalized software and other intangible assets [Abstract] | ' | ' | ' |
Gross Carrying Amount, amortized intangible assets | 232,237 | ' | 225,249 |
Accumulated Amortization | -170,993 | ' | -165,720 |
Net Carrying Amount, amortized intangible assets | 61,244 | ' | 59,529 |
Amortization expense of finite-lived intangible assets [Abstract] | ' | ' | ' |
Amortization Expense | 5,274 | 4,536 | ' |
Capitalized Software [Member] | Purchased [Member] | ' | ' | ' |
Capitalized software and other intangible assets [Abstract] | ' | ' | ' |
Gross Carrying Amount, amortized intangible assets | 122,243 | ' | 122,396 |
Accumulated Amortization | -108,742 | ' | -107,116 |
Net Carrying Amount, amortized intangible assets | 13,501 | ' | 15,280 |
Amortization expense of finite-lived intangible assets [Abstract] | ' | ' | ' |
Amortization Expense | 1,714 | 2,370 | ' |
Customer Relationship [Member] | ' | ' | ' |
Capitalized software and other intangible assets [Abstract] | ' | ' | ' |
Gross Carrying Amount, amortized intangible assets | 46,980 | ' | 47,000 |
Accumulated Amortization | -25,215 | ' | -24,185 |
Net Carrying Amount, amortized intangible assets | 21,765 | ' | 22,815 |
Amortization expense of finite-lived intangible assets [Abstract] | ' | ' | ' |
Amortization Expense | 1,035 | 1,031 | ' |
Future amortization expense of finite-lived intangible assets [Abstract] | ' | ' | ' |
2015 | 4,141 | ' | ' |
2016 | 4,140 | ' | ' |
2017 | 3,976 | ' | ' |
2018 | 3,832 | ' | ' |
2019 | 3,832 | ' | ' |
Thereafter | 2,879 | ' | ' |
Customer Relationship [Member] | Internally Developed [Member] | ' | ' | ' |
Capitalized software and other intangible assets [Abstract] | ' | ' | ' |
Amortization period | '10 years | ' | ' |
Other Amortizable Intangible Assets [Member] | ' | ' | ' |
Capitalized software and other intangible assets [Abstract] | ' | ' | ' |
Gross Carrying Amount, amortized intangible assets | 20,479 | ' | 20,530 |
Accumulated Amortization | -20,479 | ' | -19,750 |
Net Carrying Amount, amortized intangible assets | 0 | ' | 780 |
Amortization period | '3 years | ' | ' |
Amortization expense of finite-lived intangible assets [Abstract] | ' | ' | ' |
Amortization Expense | 780 | 762 | ' |
Future amortization expense of finite-lived intangible assets [Abstract] | ' | ' | ' |
2015 | 780 | ' | ' |
2016 | 0 | ' | ' |
2017 | 0 | ' | ' |
2018 | 0 | ' | ' |
2019 | 0 | ' | ' |
Thereafter | 0 | ' | ' |
Trademarks [Member] | ' | ' | ' |
Capitalized software and other intangible assets [Abstract] | ' | ' | ' |
Gross Carrying Amount, unamortized intangible assets | 358 | ' | 358 |
Net Carrying Amount, unamortized intangible assets | 358 | ' | 358 |
Application Performance Management [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Goodwill as of beginning of period | 482,857 | ' | ' |
Effect of foreign currency translation | -1,101 | ' | ' |
Goodwill as of end of period | 481,756 | ' | ' |
Mainframe [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Goodwill as of beginning of period | 140,304 | ' | ' |
Effect of foreign currency translation | 0 | ' | ' |
Goodwill as of end of period | 140,304 | ' | ' |
Application Services [Member] | ' | ' | ' |
Goodwill [Line Items] | ' | ' | ' |
Goodwill as of beginning of period | 25,385 | ' | ' |
Effect of foreign currency translation | 0 | ' | ' |
Goodwill as of end of period | $25,385 | ' | ' |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | |||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | ||
Segment Reporting Information [Line Items] | ' | ' | ||
Software license fees | $26,687 | $31,743 | ||
Maintenance fees | 88,460 | 87,162 | ||
Subscription fees | 19,362 | 20,132 | ||
Services fees | 8,414 | 7,671 | ||
Application services fees | 21,587 | 24,101 | ||
Total revenues | 164,510 | 170,809 | ||
Operating expenses | 167,796 | 167,820 | ||
Contribution /operating | -3,286 | 2,989 | ||
Restructuring expenses | 2,975 | 4,803 | ||
Application Performance Management [Member] | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ||
Restructuring expenses | 759 | ' | ||
Mainframe [Member] | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ||
Restructuring expenses | 230 | ' | ||
Application Services [Member] | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ||
Restructuring expenses | 0 | ' | ||
Operating Segments [Member] | Application Performance Management [Member] | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ||
Software license fees | 21,387 | 23,530 | [1] | |
Maintenance fees | 28,295 | 23,801 | [1] | |
Subscription fees | 19,362 | 20,132 | ||
Services fees | 8,332 | 7,602 | ||
Total revenues | 77,376 | 75,065 | ||
Operating expenses | 75,633 | 74,411 | [1] | |
Contribution /operating | 1,743 | 654 | ||
Operating Segments [Member] | Mainframe [Member] | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ||
Software license fees | 5,300 | 8,213 | [1] | |
Maintenance fees | 60,165 | 63,361 | [1] | |
Services fees | 82 | 69 | ||
Total revenues | 65,547 | 71,643 | ||
Operating expenses | 17,116 | 18,811 | [1] | |
Contribution /operating | 48,431 | 52,832 | ||
Operating Segments [Member] | Application Services [Member] | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ||
Application services fees | 21,587 | 24,101 | ||
Total revenues | 21,587 | 24,101 | ||
Operating expenses | 33,392 | 25,423 | ||
Contribution /operating | -11,805 | -1,322 | ||
Unallocated Expenses & Eliminations [Member] | ' | ' | ||
Segment Reporting Information [Line Items] | ' | ' | ||
Operating expenses | 41,655 | [2] | 49,175 | [3] |
Contribution /operating | -41,655 | [2] | -49,175 | [3] |
Restructuring expenses | $3,000 | $4,800 | ||
[1] | Prior year amounts have been reclassified to reflect the transition of APM for Mainframe from the Mainframe segment to the APM segment. | |||
[2] | Unallocated operating expenses include $3.0 million in restructuring expenses. See note 9 for additional information. | |||
[3] | Unallocated operating expenses include $4.8 million in restructuring expenses. See note 9 for additional information. |
Segment_Information_Geographic
Segment Information, Geographic operations (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Jun. 30, 2014 | Jun. 30, 2013 | Mar. 31, 2014 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Revenues | $164,510 | $170,809 | ' |
Long-lived assets | 1,005,297 | ' | 1,010,368 |
United States [Member] | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Revenues | 96,121 | 99,303 | ' |
Long-lived assets | 784,040 | ' | 785,403 |
Austria [Member] | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Long-lived assets | 208,157 | ' | 210,755 |
Europe and Africa [Member] | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Revenues | 41,247 | 42,111 | ' |
Other international operations [Member] | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Revenues | 27,142 | 29,395 | ' |
Long-lived assets | $13,100 | ' | $14,210 |
Restructuring_Charges_Details
Restructuring Charges (Details) (USD $) | 3 Months Ended | |
Jun. 30, 2014 | Jun. 30, 2013 | |
Employee | Employee | |
Restructuring reserve [Roll forward] | ' | ' |
Accrual, beginning of period | $4,592,000 | ' |
Restructuring charge | 2,975,000 | 4,803,000 |
Payments | -3,388,000 | ' |
Accrual, end of period | 4,179,000 | ' |
Reductions in global workforce | 19 | 67 |
Application Performance Management [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Restructuring charge | 759,000 | ' |
Mainframe [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Restructuring charge | 230,000 | ' |
Application Services [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Restructuring charge | 0 | ' |
Unallocated Expenses & Eliminations [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Restructuring charge | 1,986,000 | ' |
Facility Closing [Member] | Minimum [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Estimated costs for restructuring | 50,000,000 | ' |
Estimated increase in operating margins | 110,000,000 | ' |
Facility Closing [Member] | Maximum [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Estimated costs for restructuring | 60,000,000 | ' |
Estimated increase in operating margins | 120,000,000 | ' |
Employee Termination Benefits [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Accrual, beginning of period | 3,031,000 | ' |
Restructuring charge | 2,350,000 | ' |
Payments | -2,487,000 | ' |
Accrual, end of period | 2,894,000 | ' |
Employee Termination Benefits [Member] | Application Performance Management [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Restructuring charge | 759,000 | ' |
Employee Termination Benefits [Member] | Mainframe [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Restructuring charge | 230,000 | ' |
Employee Termination Benefits [Member] | Application Services [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Restructuring charge | 0 | ' |
Employee Termination Benefits [Member] | Unallocated Expenses & Eliminations [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Restructuring charge | 1,361,000 | ' |
Lease Abandonment Costs [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Accrual, beginning of period | 1,544,000 | ' |
Restructuring charge | 557,000 | ' |
Payments | -884,000 | ' |
Accrual, end of period | 1,217,000 | ' |
Lease Abandonment Costs [Member] | Application Performance Management [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Restructuring charge | 0 | ' |
Lease Abandonment Costs [Member] | Mainframe [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Restructuring charge | 0 | ' |
Lease Abandonment Costs [Member] | Application Services [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Restructuring charge | 0 | ' |
Lease Abandonment Costs [Member] | Unallocated Expenses & Eliminations [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Restructuring charge | 557,000 | ' |
Other Restructuring Charges [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Accrual, beginning of period | 17,000 | ' |
Restructuring charge | 68,000 | ' |
Payments | -17,000 | ' |
Accrual, end of period | 68,000 | ' |
Other Restructuring Charges [Member] | Application Performance Management [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Restructuring charge | 0 | ' |
Other Restructuring Charges [Member] | Mainframe [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Restructuring charge | 0 | ' |
Other Restructuring Charges [Member] | Application Services [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Restructuring charge | 0 | ' |
Other Restructuring Charges [Member] | Unallocated Expenses & Eliminations [Member] | ' | ' |
Restructuring reserve [Roll forward] | ' | ' |
Restructuring charge | $68,000 | ' |