EXHIBIT 99.1
NEWS RELEASE
COMPUWARE CORPORATION COMPUWARE [LOGO]
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Corporate Headquarters
One Campus Martius o Detroit, MICHIGAN 48226
(313) 227-7300
For Immediate Release
May 15, 2007
Compuware Earns 21 Cents Per Share in Q4, 45 Cents Per Share in FY `07
Compuware Increases EPS More Than 20 Percent Year-over-year; Fiscal Year Total
Revenues Grow for First Time in Seven Years
DETROIT--May 15, 2007--Compuware Corporation (NASDAQ: CPWR) today announced
final financial results for its fourth quarter and fiscal year ended March 31,
2007. The company also announced that the Compuware Board of Directors has
authorized management to extend the company's 10b5-1 share repurchase plan for
three months to purchase up to 16 million additional shares of common stock.
"Compuware posted some noteworthy accomplishments in FY '07, including increases
in total revenue and in earnings per share," said Compuware Chairman and CEO
Peter Karmanos, Jr. "In terms of the company's key growth-drivers, Compuware
improved its total distributed products revenue by nearly 13 percent, and
Compuware Covisint produced a 65 percent increase in revenue. In the fiscal year
ahead, I will continue to lead the company in implementing its plans for
aligning costs with the business, for improving operational results and for
buying back stock."
Fiscal Year 2007 Results
During the fiscal year ended March 31, 2007, revenues were $1.21 billion. Net
income was $158.1 million for fiscal 2007, up more than 10 percent from $143.0
million in fiscal 2006. Earnings per share (diluted computation) were 45 cents,
an increase of more than 21 percent from 37 cents in fiscal 2006, based upon
351.0 million and 387.6 million shares outstanding, respectively.
During fiscal 2007, software license fees were $283.4 million. Maintenance
revenue was $457.6 million in fiscal 2007, up from $433.6 million in fiscal
2006. Professional services fees for fiscal year 2007 were $472.0 million.
Fourth Quarter Fiscal 2007 Results
Compuware reports fourth quarter net income of $67.5 million on revenues of
$313.0 million. Earnings per share (diluted computation) were 21 cents, based
upon 319.3 million shares outstanding.
-MORE-
Page 2
Compuware Earns 21 Cents Per Share in Q4, 45 Cents Per Share in FY `07
May 15, 2007
During the company's fourth quarter, software license fees were $73.2 million.
Maintenance fees were $117.7 million during the quarter, and fourth quarter
revenue from professional services was $122.1 million.
Fourth Quarter Fiscal Year 2007 Highlights
During the fourth quarter, Compuware:
o Acquired privately held Proxima Technology. Proxima's Centauri
product enables IT organizations to overcome one of their most
prevalent challenges: the inability to offer a clear business view
of service delivery.
o Showcased Compuware Vantage and its Application Service Management
capabilities at the LegalTech Conference. Compuware also announced
that Reed Smith, one of the world's largest law firms, implemented
Compuware Vantage to proactively identify, resolve and prevent
application performance problems.
o Launched Compuware Test Factory, a comprehensive quality assurance
solution designed specifically to create a more efficient approach
for delivering software testing services. Compuware Test Factory
provides outsourced testing service providers with a comprehensive
and industrialized solution to help resolve a range of complex
business challenges, including those driven by rapid growth and
increased competitive pressures.
o Announced with international IT services company Atos Origin the
worldwide implementation of the Compuware Test Factory solution. The
solution will roll out over the next three years to standardize
testing tools, processes and procedures used by more than 20,000
Atos Origin employees worldwide. By using the Compuware Test Factory
solution, Atos Origin will improve service quality, deliver cost
reductions and enable faster and seamless transfer of activities to
off-shore locations.
o Completed an agreement with CIGNA HealthCare to use Compuware
Covisint's hosted IT infrastructure for standardizing and automating
the exchange of clinical information between the carrier and its
contracted health care providers.
o Introduced Compuware Quality Management, which enables QA
organizations to deliver higher-quality applications by arming those
organizations with the tools they need to effectively implement and
monitor their quality process. This solution helps organizations
progressively mature and manage quality across the life cycle,
accelerating the path to Quality Governance.
o Introduced the company's Application Auditing solution, which uses
Compuware Hiperstation to address mainframe data and application
security issues with internal, authorized users.
o Announced the general availability of Compuware Uniface 9.1, which
includes multiple enhancements that enable organizations to better
and more effectively develop and deploy enterprise applications in
virtually any environment, including Web, Windows, Unix or the
Mainframe.
o Announced that two of its application delivery solutions--Compuware
DevPartner Studio and Compuware DevPartner SecurityChecker--were
honored as top products of 2006 by CRN Magazine and by Tech Target's
SearchVB.com.
Page 3
Compuware Earns 21 Cents Per Share in Q4, 45 Cents Per Share in FY `07
May 15, 2007
o Announced that it earned placement on Black MBA Magazine's "Top 50
Companies for Black MBAs to Work" list for the second consecutive
year. Compuware placed 33rd on the list, the second-highest
placement for a high-tech firm.
Compuware Corporation
Compuware Corporation (NASDAQ: CPWR) maximizes the value IT brings to the
business by helping CIOs more effectively manage the business of IT. Compuware
solutions accelerate the development, improve the quality and enhance the
performance of critical business systems while enabling CIOs to align and govern
the entire IT portfolio, increasing efficiency, cost control and employee
productivity throughout the IT organization. Founded in 1973, Compuware serves
the world's leading IT organizations, including more than 90 percent of the
Fortune 100 companies. Learn more about Compuware at http://www.compuware.com.
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Conference Call Information
Compuware will host a conference call today to discuss these results at 5:00
p.m. Eastern time (21:00 GMT). Interested parties from the United States should
call 800-230-1093. For international access, the conference call number is
+1-612-288-0337.
A conference call replay will also be available. The United States replay number
will be 800-475-6701, and the international replay number will be
+1-320-365-3844. The replay passcode is 865451. For more information, visit the
Compuware Corporation Investor Relations web site at http://www.compuware.com.
Press Contact
Lisa Elkin, Vice President, Communications and Investor Relations,
+1-313-227-7345
Certain statements in this release that are not historical facts, including
those regarding the Company's future plans, objectives and expected performance,
are "forward-looking statements" within the meaning of the federal securities
laws. These forward-looking statements represent our outlook only as of the date
of this release. While we believe any forward-looking statements we have made
are reasonable, actual results could differ materially since the statements are
based on our current expectations and are subject to risks and uncertainties.
These risks and uncertainties are discussed in the Company's reports filed with
the Securities and Exchange Commission. Readers are cautioned to consider these
factors when relying on such forward-looking information. The Company does not
undertake, and expressly disclaims any obligation, to update or alter its
forward-looking statements whether as a result of new information, future events
or otherwise, except as required by applicable law.
COMPUWARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
AS OF MARCH 31,
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ASSETS
2007 2006
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CURRENT ASSETS:
Cash and cash equivalents $ 260,681 $ 612,062
Investments 107,062 265,131
Accounts receivable, net 420,774 418,745
Deferred tax asset, net 33,392 32,015
Income taxes refundable, net 58,266 77,956
Prepaid expenses and other current assets 41,019 24,455
Buildings - held for sale 14,816
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Total current assets 921,194 1,445,180
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INVESTMENTS 71,391 32,149
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PROPERTY AND EQUIPMENT, LESS ACCUMULATED
DEPRECIATION AND AMORTIZATION 385,227 395,653
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CAPITALIZED SOFTWARE, LESS ACCUMULATED
AMORTIZATION 72,276 61,918
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OTHER:
Accounts receivable 172,255 206,964
Deferred tax asset, net 15,987 13,983
Goodwill 353,682 320,082
Other 37,400 35,039
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Total other assets 579,324 576,068
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TOTAL ASSETS $2,029,412 $2,510,968
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 27,713 $ 24,468
Accrued expenses 141,970 170,590
Deferred revenue 359,688 350,349
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Total current liabilities 529,371 545,407
DEFERRED REVENUE 321,881 343,246
ACCRUED EXPENSES 11,346 17,244
DEFERRED TAX LIABILITY, NET 34,666 25,572
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Total liabilities 897,264 931,469
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SHAREHOLDERS' EQUITY:
Common stock 3,030 3,779
Additional paid-in capital 673,660 763,420
Retained earnings 444,159 805,781
Accumulated other comprehensive income 11,299 6,519
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Total shareholders' equity 1,132,148 1,579,499
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,029,412 $2,510,968
========== ==========
COMPUWARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
QUARTER ENDED TWELVE MONTHS ENDED
MARCH 31, MARCH 31,
-------------------------- --------------------------
2007 2006 2007 2006
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REVENUES:
Software license fees $ 73,225 $ 81,786 $ 283,412 $ 296,650
Maintenance fees 117,713 107,674 457,594 433,596
Professional services fees 122,091 120,022 471,996 475,115
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Total revenues 313,029 309,482 1,213,002 1,205,361
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OPERATING EXPENSES:
Cost of software license fees 7,457 6,232 28,581 23,262
Cost of maintenance fees 11,454 10,984 41,533 41,687
Cost of professional services 107,280 104,402 420,729 417,485
Technology development and support 30,167 22,898 114,071 96,858
Sales and marketing 74,905 74,380 281,730 288,162
Administrative and general 50,055 47,981 193,578 190,538
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Total operating expenses 281,318 266,877 1,080,222 1,057,992
----------- ----------- ----------- -----------
INCOME FROM OPERATIONS 31,711 42,605 132,780 147,369
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OTHER INCOME (EXPENSES)
Interest income 8,014 10,282 39,427 35,705
Settlement 10,598 10,603 10,598 10,603
Gain on sale of investment in partially owned company 11,250 11,250
Other (91) (613) (998) (2,217)
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OTHER INCOME, NET 29,771 20,272 60,277 44,091
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INCOME BEFORE INCOME TAXES 61,482 62,877 193,057 191,460
INCOME TAX PROVISION (BENEFIT) (5,994) 6,430 34,965 48,500
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NET INCOME $ 67,476 $ 56,447 $ 158,092 $ 142,960
=========== =========== =========== ===========
DILUTED EPS COMPUTATION
Numerator: Net income $ 67,476 $ 56,447 $ 158,092 $ 142,960
----------- ----------- ----------- -----------
Denominator:
Weighted-average common shares outstanding 317,764 379,872 350,213 385,147
Dilutive effect of stock options 1,512 2,425 754 2,422
----------- ----------- ----------- -----------
Total shares 319,276 382,297 350,967 387,569
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Diluted EPS $ 0.21 $ 0.15 $ 0.45 $ 0.37
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COMPUWARE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
TWELVE MONTHS ENDED
MARCH 31,
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2007 2006
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CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income $ 158,092 $ 142,960
Adjustments to reconcile net income to cash provided
by operations:
Depreciation and amortization 55,026 50,193
Gain on sale of investment in partially owned company (11,250)
Building impairment 6,702
Acquisition tax benefits 5,257 20,783
Stock option compensation 9,432
Deferred income taxes 6,953 23,057
Other (8) 6,274
Net change in assets and liabilities, net of effects from acquisitions
and currency fluctuations:
Accounts receivable 61,202 58,972
Prepaid expenses and other current assets (13,857) 187
Other assets (1,211) (1,767)
Accounts payable and accrued expenses (46,483) (6,722)
Deferred revenue (38,448) (30,366)
Income taxes 20,027 (40,548)
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Net cash provided by operating activities 204,732 229,725
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CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchase of:
Businesses, net of cash acquired (51,818) (42,896)
Property and equipment (18,590) (14,480)
Capitalized software (21,457) (20,894)
Proceeds from sale of property 15,466
Proceeds from sale of investment in partially owned company 11,250
Investments:
Proceeds 495,371 450,865
Purchases (376,387) (380,922)
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Net cash provided by (used in) investing activities 53,835 (8,327)
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CASH FLOWS USED IN FINANCING ACTIVITIES:
Net proceeds from exercise of stock options 54,364 13,590
Contribution to stock purchase plans 4,635 8,902
Repurchase of common stock (676,757) (124,004)
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Net cash used in financing activities (617,758) (101,512)
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EFFECT OF EXCHANGE RATE CHANGES ON CASH 7,810 (5,511)
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (351,381) 114,375
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 612,062 497,687
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 260,681 $ 612,062
========== ==========
COMPUWARE CORPORATION AND SUBSIDIARIES
OPERATIONAL HIGHLIGHTS
(dollar amounts in thousands)
QUARTER ENDED
-------------------- QUARTER ENDED
MARCH 31 MARCH 31 YR - YR DECEMBER 31, QTR - QTR
2007 2006 % Change 2006 % Change
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License Fees:
Distributed Product License Fees
DevPartner $ 3,305 $ 3,119 6.0% $ 2,586 27.8%
QACenter and File-AID Client/Server 7,237 7,566 (4.3%) 6,930 4.4%
UNIFACE and Optimal 6,742 5,364 25.7% 6,091 10.7%
Vantage 19,407 16,697 16.2% 18,905 2.7%
Changepoint 3,628 2,201 64.8% 3,618 0.3%
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Total Distributed Product License Fees 40,319 34,947 15.4% 38,130 5.7%
Mainframe Product License Fees 32,906 46,839 (29.7%) 47,883 (31.3%)
-------- -------- --------
Total License Fees 73,225 81,786 (10.5%) 86,013 (14.9%)
Maintenance Fees 117,713 107,674 9.3% 114,432 2.9%
-------- -------- --------
Total Products Revenue $190,938 $189,460 0.8% $200,445 (4.7%)
======== ======== ========
Total Mainframe Products Revenue $118,926 $127,554 (6.8%) $132,194 (10.0%)
Total Distributed Products Revenue $ 72,012 $ 61,906 16.3% $ 68,251 5.5%
Total Products Revenue by Geography
North America $100,971 $ 95,977 5.2% $108,103 (6.6%)
International $ 89,967 $ 93,483 (3.8%) $ 92,342 (2.6%)
Product Releases
Mainframe 5 5 0.0% 9 (44.4%)
Distributed 12 7 71.4% 6 100.0%
Total Costs of Software Products $123,983 $114,494 8.3% $118,079 5.0%
Deferred license fees
Current $ 71,550 $ 71,886 (0.5%) $ 72,218 (0.9%)
Long-term $ 44,304 $ 56,983 (22.3%) $ 39,686 11.6%
Deferred during quarter $ 27,967 $ 29,541 (5.3%) $ 26,308 6.3%
Recognized during quarter $ 24,736 $ 23,311 6.1% $ 25,571 (3.3%)
Professional Services
Professional Services Revenue $122,091 $120,022 1.7% $114,703 6.4%
Contribution Margin 12.1% 13.0% 10.9%
Billable Headcount 3,465 3,666 (5.5%) 3,488 (0.7%)
Total Company Headcount 7,539 7,510 0.4% 7,578 (0.5%)
Total DSO 121.0 121.8 120.5
Total DSO (Billed) 56.3 56.3 54.1