* Income from operations increases 28 percent year-over-year to $185.1 Million * FY '09 cash flow from operations of $232.0 million exceeds guidance * Fiscal discipline reduces year-over-year operating expense by $179.4 million
DETROIT, May 14, 2009 (GLOBE NEWSWIRE) -- Compuware Corporation (Nasdaq:CPWR) today announced final financial results for its fourth quarter and fiscal year ended March 31, 2009.
"Our Compuware 2.0 initiative has made Compuware a healthier, more focused business and poised the company for long-term, meaningful growth in earnings," said Compuware President and Chief Operating Officer Bob Paul. "With a smaller and more profitable Professional Services business and a more focused and strategic product portfolio, our potential for success has never been greater. Through our Business Service Delivery approach, we will capitalize on our market leadership position in end-to-end application performance to meet the growing and ever-more critical demand that applications deliver value back to the business."
Fiscal Year 2009 Results
During the fiscal year ended March 31, 2009, revenues were $1.09 billion, compared to $1.23 billion in the previous fiscal year. Net income was $139.6 million, up from $134.4 million in fiscal 2008. Earnings per share were 55 cents, an increase of 17 percent from 47 cents in fiscal 2008, based upon 252.4 million and 287.6 million shares outstanding, respectively.
During fiscal 2009, software license fees were $219.6 million, and maintenance revenue was $479.5 million. Professional services fees for fiscal 2009 were $391.4 million.
Fourth Quarter Fiscal 2009 Results
During the fourth quarter, revenues were $253.4 million. Net income was $48.4 million, and earnings per share were 20 cents. During the company's fourth quarter, software license fees were $55.5 million, and maintenance fees were $111.6 million. Fourth quarter revenue from professional services was $86.3 million.
Fourth Quarter Fiscal Year 2009 Highlights
During the fourth quarter, Compuware:
* Announced that Partners HealthCare-one of the largest integrated healthcare systems in the U.S.-selected Compuware Vantage for end- to-end visibility into the clinician end-user experience with its electronic medical records (EMR) system. * Announced that Compuware Vantage and Strobe provide end-to-end visibility into the performance of applications that span both distributed and mainframe transaction systems. This integrated approach to Business Service Delivery enables IT operations and management to quickly predict, isolate and resolve performance challenges from the end-user perspective, increasing internal and external customer satisfaction. * Jump-started Application Portfolio Management initiatives by offering a pre-configured version of its market-leading IT portfolio management solution, Changepoint. * Announced that its Covisint subsidiary will provide the VIP Health Initiative with a collaborative network for the secure sharing of sensitive patient information and improved physician collaboration. The VIP Health Initiative was formed by Scripps Mercy Physician Partners, SMPP Services and Physician Partners Management Services to enhance the quality of care delivered while also providing key clinical, administrative and regulatory efficiencies. * Revealed the results of a study on application performance conducted by Forrester Consulting and commissioned by Compuware, which showed that 64 percent of the respondents believe that poor application performance causes significant financial losses. Despite these losses the study also showed IT takes a costly and reactive approach to Application Performance Management.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the financial information following this press release uses a non-GAAP measure for revenue. The non-GAAP revenue disclosures provide information on total product commitments. Compuware management believes the non-GAAP financial information provided in this release is useful to investors' understanding and assessment of Compuware's ongoing core operations and prospects for the future. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in operating and evaluating its business and as such has determined that it is important to provide this information to investors.
Compuware Corporation
Founded in 1973, Compuware provides software, experts and best practices to ensure applications work well and deliver business value. Our unique approach, Business Service Delivery, helps CIOs optimize end-to-end application performance for leading businesses around the world, including 46 of the top 50 Fortune 500 companies. Learn more at www.compuware.com.
The Compuware logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5950
Conference Call Information
Compuware will host a conference call to discuss these results at 5:00 p.m. Eastern time (21:00 GMT) today. To join the conference call, interested parties from the United States should call 800-230-1059. For international access, the conference call number is +1-612-234-9959. No password is required.
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 will be 992681. Additionally, investors can listen to the conference call via webcast by visiting the Compuware Corporation Investor Relations web site at http://www.compuware.com.
Certain statements in this release that are not historical facts, including those regarding the Company's future plans, objectives and expected performance, are "forward-looking statements" within the meaning of the federal securities laws. These forward-looking statements represent our outlook only as of the date of this release. While we believe any forward-looking statements we have made are reasonable, actual results could differ materially since the statements are based on our current expectations 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,
------------------------
ASSETS
2009 2008
----------- -----------
CURRENT ASSETS:
Cash and cash equivalents $ 278,112 $ 215,943
Investments 70,474
Accounts receivable, net 472,011 535,094
Deferred tax asset, net 37,359 44,374
Income taxes refundable 2,578 3,746
Prepaid expenses and other current assets 41,350 49,285
Assets held for sale 27,354
----------- -----------
Total current assets 858,764 918,916
----------- -----------
PROPERTY AND EQUIPMENT, LESS ACCUMULATED
DEPRECIATION AND AMORTIZATION 353,182 365,691
----------- -----------
CAPITALIZED SOFTWARE, LESS ACCUMULATED
AMORTIZATION 35,763 61,653
----------- -----------
OTHER:
Accounts receivable 224,681 244,388
Deferred tax asset, net 30,851 35,851
Goodwill 339,134 356,267
Other 32,475 35,791
----------- -----------
Total other assets 627,141 672,297
----------- -----------
TOTAL ASSETS $ 1,874,850 $ 2,018,557
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 13,796 $ 18,772
Accrued expenses 87,205 148,268
Income taxes payable 24,646 4,976
Deferred revenue 409,410 472,864
Liabilities held for sale 26,470
----------- -----------
Total current liabilities 561,527 644,880
DEFERRED REVENUE 378,094 399,548
ACCRUED EXPENSES 30,111 19,513
DEFERRED TAX LIABILITY, NET 24,470 27,585
----------- -----------
Total liabilities 994,202 1,091,526
----------- -----------
SHAREHOLDERS' EQUITY:
Common stock 2,418 2,616
Additional paid-in capital 628,955 643,544
Retained earnings 249,897 261,754
Accumulated other comprehensive
income (loss) (622) 19,117
----------- -----------
Total shareholders' equity 880,648 927,031
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 1,874,850 $ 2,018,557
=========== ===========
COMPUWARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
THREE MONTHS ENDED TWELVE MONTHS ENDED
MARCH 31, MARCH 31,
-------------------- ------------------------
2009 2008 2009 2008
--------- --------- ----------- -----------
REVENUES:
Software license
fees $ 55,428 $ 100,794 $ 219,634 $ 297,506
Maintenance fees 111,622 126,311 479,480 476,374
Professional
services fees 86,305 111,811 391,341 455,731
--------- --------- ----------- -----------
Total revenues 253,355 338,916 1,090,455 1,229,611
--------- --------- ----------- -----------
OPERATING EXPENSES:
Cost of software
license fees 6,031 6,815 24,491 30,475
Cost of maintenance
fees 9,063 13,190 41,877 46,300
Cost of professional
services 78,348 104,169 368,030 413,921
Technology
development and
support 18,550 23,998 86,453 101,132
Sales and marketing 51,686 71,220 226,408 267,800
Administrative and
general 28,881 48,076 148,019 182,488
Restructuring costs 3,115 3,000 10,037 42,645
--------- --------- ----------- -----------
Total operating
expenses 195,674 270,468 905,315 1,084,761
--------- --------- ----------- -----------
INCOME FROM OPERATIONS 57,681 68,448 185,140 144,850
--------- --------- ----------- -----------
OTHER INCOME (EXPENSES)
Interest income 1,765 3,906 10,776 19,910
Settlement 17,943 16,160 17,943 16,160
Other (685) (260) (1,138) (528)
--------- --------- ----------- -----------
OTHER INCOME, NET 19,023 19,806 27,581 35,542
--------- --------- ----------- -----------
INCOME BEFORE INCOME
TAXES 76,704 88,254 212,721 180,392
INCOME TAX PROVISION 28,323 27,079 73,074 45,998
--------- --------- ----------- -----------
NET INCOME $ 48,381 $ 61,175 $ 139,647 $ 134,394
========= ========= =========== ===========
DILUTED EPS COMPUTATION
Numerator: Net income $ 48,381 $ 61,175 $ 139,647 $ 134,394
--------- --------- ----------- -----------
Denominator:
Weighted-average
common shares
outstanding 245,006 267,932 250,916 286,402
Dilutive effect of
stock options 966 800 1,486 1,226
--------- --------- ----------- -----------
Total shares 245,972 268,732 252,402 287,628
--------- --------- ----------- -----------
Diluted EPS $ 0.20 $ 0.23 $ 0.55 $ 0.47
========= ========= =========== ===========
COMPUWARE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
TWELVE MONTHS ENDED
MARCH 31,
--------------------
2009 2008
--------- ---------
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income $ 139,647 $ 134,394
Adjustments to reconcile net income to
cash provided by operations:
Depreciation and amortization 53,129 55,167
Property and equipment impairment 662 2,981
Capitalized software impairment 3,873
Acquisition tax benefits 5,059 5,090
Stock award compensation 15,637 11,553
Deferred income taxes 4,986 (2,022)
Other 413 1,474
Net change in assets and liabilities,
net of effects from acquisitions
and currency fluctuations:
Accounts receivable 17,853 (64,019)
Prepaid expenses and other current
assets 3,555 (7,120)
Other assets (3,641) 640
Accounts payable and accrued expenses (29,623) (837)
Deferred revenue 4,015 64,875
Income taxes 20,316 28,641
--------- ---------
Net cash provided by operating
activities 232,008 234,690
--------- ---------
CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
Purchase of:
Businesses, net of cash acquired (4,649)
Property and equipment (17,943) (10,498)
Capitalized software (15,072) (14,359)
Investment proceeds 70,212 106,717
--------- ---------
Net cash provided by investing
activities 37,197 77,211
--------- ---------
CASH FLOWS USED IN FINANCING ACTIVITIES:
Net proceeds from exercise of stock
options including excess tax benefits 11,237 67,178
Contribution to stock purchase plans 2,986 4,066
Repurchase of common stock (206,042) (440,988)
--------- ---------
Net cash used in financing
activities (191,819) (369,744)
--------- ---------
EFFECT OF EXCHANGE RATE CHANGES ON CASH (15,217) 13,105
--------- ---------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 62,169 (44,738)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 215,943 260,681
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 278,112 $ 215,943
========= =========
COMPUWARE CORPORATION AND SUBSIDIARIES
OPERATIONAL HIGHLIGHTS
(dollar amounts in thousands)
QUARTER ENDED QUARTER
-------------------- ENDED
MARCH 31, MARCH 31, YR-YR DEC. 31, QTR-QTR
2009 2008 %Change 2008 %Change
--------- --------- ------- --------- -------
License Fees:
Distributed Product
License Fees
Vantage $ 13,937 $ 23,510 (40.7%) $ 18,606 (25.1%)
Changepoint 2,528 3,296 (23.3%) 2,967 (14.8%)
Quality 4,541 8,218 (44.7%) 6,567 (30.9%)
Uniface 3,287 4,464 (26.4%) 3,505 (6.2%)
DevPartner 1,069 2,385 (55.2%) 1,274 (16.1%)
--------- --------- ---------
Total Distributed
Product License Fees 25,362 41,873 (39.4%) 32,919 (23.0%)
Mainframe Product
License Fees 30,066 58,921 (49.0%) 27,594 9.0%
--------- --------- ---------
Total License Fees 55,428 100,794 (45.0%) 60,513 (8.4%)
Maintenance Fees 111,622 126,311 (11.6%) 116,614 (4.3%)
--------- --------- ---------
Total Products Revenue $ 167,050 $ 227,105 (26.4%) $ 177,127 (5.7%)
========= ========= =========
Total Mainframe
Products Revenue $ 109,836 $ 147,247 (25.4%) $ 109,296 0.5%
Total Distributed
Products Revenue $ 57,214 $ 79,858 (28.4%) $ 67,831 (15.7%)
Total Products
Revenue by Geography
North America $ 87,228 $ 113,485 (23.1%) $ 89,360 (2.4%)
International $ 79,822 $ 113,620 (29.7%) $ 87,767 (9.1%)
Product Releases
Mainframe 5 7 (28.6%) 1 400.0%
Distributed 8 2 300.0% 10 (20.0%)
Total Costs of
Software Products $ 85,330 $ 115,223 (25.9%) $ 93,042 (8.3%)
Deferred license fees
Current $ 59,592 $ 68,885 (13.5%) $ 59,880 (0.5%)
Long-term $ 52,513 $ 60,237 (12.8%) $ 47,172 11.3%
Deferred during
quarter $ 27,288 $ 38,545 (29.2%) $ 21,403 27.5%
Recognized during
quarter $ 20,351 $ 28,760 (29.2%) $ 20,406 (0.3%)
Professional Services
Professional
Services Revenue $ 86,305 $ 111,811 (22.8%) $ 91,540 (5.7%)
Contribution Margin 9.2% 6.8% 5.1%
Billable Headcount 2,116 3,171 (33.3%) 2,747 (23.0%)
Total Company Headcount 5,006 6,344 (21.1%) 5,648 (11.4%)
Total DSO 167.7 142.1 175.0
Total DSO (Billed) 83.4 76.9 96.1
COMPUWARE CORPORATION AND SUBSIDIARIES
PRODUCT COMMITMENTS
(In Thousands)
QUARTER ENDED TWELVE MONTHS ENDED
-------------------- --------------------
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2009 2008 2009 2008
--------- --------- --------- ---------
License revenue $ 55,428 $ 100,794 $ 219,634 $ 297,506
Change in deferred
license 6,937 9,786 (4,732) 5,033
--------- --------- --------- ---------
License contracts entered
into during period 62,365 110,580 214,902 302,539
--------- --------- --------- ---------
Maintenance revenue 111,622 126,311 479,480 476,374
Change in deferred
maintenance 30,614 77,259 780 49,671
--------- --------- --------- ---------
Maintenance contracts &
renewals entered into
during period 142,236 203,570 480,260 526,045
--------- --------- --------- ---------
Total products
commitments
during period $ 204,601 $ 314,150 $ 695,162 $ 828,584
========= ========= ========= =========
As Compuware continues to emphasize solution selling, deals are
becoming more complex, increasing the likelihood that software
transactions will be recognized ratably over the maintenance term.
Therefore to understand the health of Compuware's software business,
we believe it is important to also consider the amount of product
commitments during the reported periods.