* EPS excluding restructuring costs leap nearly 70 percent year-over- year to 22 cents * Quality Solutions divestiture nets gain of $52.4 million * Software license fees of $40.5 million exceed analyst expectations
DETROIT, July 23, 2009 (GLOBE NEWSWIRE) -- Compuware Corporation (Nasdaq:CPWR) today announced final financial results for its first quarter ended June 30, 2009.
Compuware reports first quarter revenues of $214.4 million, compared to $298.6 million in Q1 last year. First quarter earnings per share -- before restructuring charges -- were 22 cents, compared to 13 cents in Q1 last year, based upon 242.5 million and 261.1 million shares outstanding, respectively. On a GAAP basis, earnings per share were 21 cents compared to 13 cents last year.
First quarter net income -- before restructuring charges -- was $52.7 million compared to $35.2 million in the same period last year. On a GAAP basis, Compuware delivered net income of $51.1 million in Q1, compared to net income of $34.7 million in the same quarter last year.
During the company's first quarter, software license fees were $40.5 million compared to $61.4 million in Q1 last year. Maintenance fees were $111.1 million in Q1 compared to $126.5 million in the first quarter last year. Revenue from professional services in the quarter was $62.7 million, compared to $110.6 million in the same quarter last year.
"Compuware produced a solid start to the year in Q1," said Compuware President and Chief Operating Officer Bob Paul. "With improved year-over-year earnings, software license fees that exceeded expectations and a business model built to capitalize on our core solutions, Compuware is primed to meet its goals for increased profitability."
First Quarter Fiscal Year 2009 Highlights
During the first quarter, Compuware:
* achieved an important milestone in its Business Service Delivery strategy by completing an agreement for Micro Focus to acquire assets from Compuware's Quality Solutions product line. * continued to strengthen its position as the global leader in application performance through new services, solutions--including the company's flagship IT Service Management solution, Vantage 11-- and partner programs that overcome the end-to-end application performance challenge, reduce costs and improve customer satisfaction. * announced that Compuware Vantage has a dominant share of the growing End User Experience monitoring market. * announced that Compuware Vantage's End User Experience monitoring solution, received the Yphise Award for "Best End User Experience Monitoring". * received, for the second consecutive year, a "General Motors 2008 Supplier of the Year" award for its significant contributions to GM's global product and performance achievements. * unveiled a 12-month strategic roadmap for its IT Portfolio Management solution, Changepoint, focused on enhancing usability, easing implementation and ensuring user adoption. * announced that, based on completeness of vision and ability to execute, Gartner Inc. placed Compuware in the "leaders" quadrant of the "Magic Quadrant for IT Project and Portfolio Management" report. * announced that Changepoint, the company's market-leading IT Portfolio Management solution, received the Yphise Award for "Best Application and Service Portfolio Governance." * helped customers more effectively manage Agile development efforts by offering the Agile Accelerator, a pre-configured version of its market-leading IT portfolio management solution, Changepoint. * announced that its Covisint subsidiary signed a contract extension with Daimler AG to continue providing access to critical business information and applications for more than 50,000 of Daimler's supplier users globally. * announced that its Covisint subsidiary signed an agreement with the American Medical Association to deploy an innovative health information exchange solution for its 240,000 member physicians and the physician population at large. * announced that its Covisint subsidiary has partnered with Michigan Association of Health Plans to improve collaboration between physicians and healthcare plans. * announced that its Covisint subsidiary was named a hosted Identity and Access Management (IAM) market share leader by independent analyst firm, Forrester Research, Inc. * announced that the Association of Medical Directors of Information Systems have joined forces to launch www.meaningfuluse.org, a collaborative web site that gives the HIT community a single, central location to collaborate and influence the definition of "meaningful use." * achieved placement on IDG's Computerworld list of the top workplaces for information technology professionals.
Use of Non-GAAP Financial Information
In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the financial information included in and following this press release uses non-GAAP measures for EPS, net income and revenue. The non-GAAP revenue disclosure provides information on total products 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. A reconciliation of non-GAAP to GAAP information is contained in the financial statements following this press release.
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 800-230-1092. For international access, the conference call number is +1-612-288-0337. 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 104766. 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 JUNE 30,
-------------------------------
2009 2008
-------------- --------------
CURRENT ASSETS:
Cash and cash equivalents $ 390,680 $ 216,457
Investments 56,423
Accounts receivable, net 379,771 479,861
Deferred tax asset, net 41,231 45,806
Income taxes refundable 3,793 4,189
Prepaid expenses and other current
assets 27,203 37,162
-------------- --------------
Total current assets 842,678 839,898
-------------- --------------
PROPERTY AND EQUIPMENT, LESS
ACCUMULATED DEPRECIATION AND
AMORTIZATION 349,258 360,476
-------------- --------------
CAPITALIZED SOFTWARE, LESS
ACCUMULATED AMORTIZATION 36,114 58,769
-------------- --------------
OTHER:
Accounts receivable 217,207 266,509
Deferred tax asset, net 32,493 35,520
Goodwill 341,841 356,026
Other 32,960 33,808
-------------- --------------
Total other assets 624,501 691,863
-------------- --------------
TOTAL ASSETS $ 1,852,551 $ 1,951,006
============== ==============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 24,101 $ 17,551
Accrued expenses 74,193 108,428
Income taxes payable 39,927 15,262
Deferred revenue 398,624 444,705
-------------- --------------
Total current liabilities 536,845 585,946
DEFERRED REVENUE 351,006 406,528
ACCRUED EXPENSES 28,214 18,526
DEFERRED TAX LIABILITY, NET 28,361 30,090
-------------- --------------
Total liabilities 944,426 1,041,090
-------------- --------------
SHAREHOLDERS' EQUITY:
Common stock 2,378 2,560
Additional paid-in capital 626,421 634,885
Retained earnings 279,951 252,430
Accumulated other comprehensive
income (loss) (625) 20,041
-------------- --------------
Total shareholders' equity 908,125 909,916
-------------- --------------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $ 1,852,551 $ 1,951,006
============== ==============
COMPUWARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
THREE MONTHS ENDED
JUNE 30,
-------------------------------
2009 2008
-------------- --------------
REVENUES:
Software license fees $ 40,546 $ 61,442
Maintenance fees 111,127 126,527
Professional services fees 62,715 110,619
-------------- --------------
Total revenues 214,388 298,588
-------------- --------------
OPERATING EXPENSES:
Cost of software license fees 3,949 6,090
Cost of maintenance fees 8,956 11,994
Cost of professional services 58,901 103,822
Technology development and support 21,482 22,570
Sales and marketing 53,148 61,327
Administrative and general 40,130 41,144
Restructuring costs 2,490 682
Gain on divestiture of product lines (52,351)
-------------- --------------
Total operating expenses 136,705 247,629
-------------- --------------
INCOME FROM OPERATIONS 77,683 50,959
-------------- --------------
OTHER INCOME (EXPENSES)
Interest income 1,569 3,409
Other (149) (188)
-------------- --------------
OTHER INCOME, NET 1,420 3,221
-------------- --------------
INCOME BEFORE INCOME TAXES 79,103 54,180
INCOME TAX PROVISION 28,056 19,448
-------------- --------------
NET INCOME $ 51,047 $ 34,732
============== ==============
DILUTED EPS COMPUTATION
Numerator: Net income $ 51,047 $ 34,732
-------------- --------------
Denominator:
Weighted-average common shares
outstanding 240,784 259,694
Dilutive effect of stock options 1,764 1,399
-------------- --------------
Total shares 242,548 261,093
-------------- --------------
Diluted EPS $ 0.21 $ 0.13
============== ==============
COMPUWARE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
THREE MONTHS ENDED
JUNE 30,
-------------------------------
2009 2008
-------------- --------------
CASH FLOWS PROVIDED BY OPERATING
ACTIVITIES:
Net income $ 51,047 $ 34,732
Adjustments to reconcile net income
to cash provided by operations:
Gain on divestiture of product
lines (52,351)
Depreciation and amortization 10,378 13,463
Property and equipment impairment 662
Acquisition tax benefits 880 1,311
Stock award compensation 5,637 2,326
Deferred income taxes 1,017 1,751
Other (10) 295
Net change in assets and
liabilities, net of effects from
divestiture and currency
fluctuations:
Accounts receivable 119,957 34,044
Prepaid expenses and other
current assets 14,521 12,212
Other assets (2,339) 1,851
Accounts payable and accrued
expenses (23,061) (42,527)
Deferred revenue (64,745) (22,649)
Income taxes 13,972 10,365
-------------- --------------
Net cash provided by
operating activities 74,903 47,836
-------------- --------------
CASH FLOWS PROVIDED BY INVESTING
ACTIVITIES:
Purchase of:
Property and equipment (1,674) (2,384)
Capitalized software (4,034) (2,788)
Net proceeds from divestiture of
product lines 64,992
Investment proceeds 13,856
-------------- --------------
Net cash provided by
investing activities 59,284 8,684
-------------- --------------
CASH FLOWS USED IN FINANCING
ACTIVITIES:
Net proceeds from exercise of stock
options including excess tax
benefits 1,628 1,397
Contribution to stock purchase plans 579 934
Repurchase of common stock (32,305) (58,891)
-------------- --------------
Net cash used in financing
activities (30,098) (56,560)
-------------- --------------
EFFECT OF EXCHANGE RATE CHANGES ON
CASH 8,479 554
-------------- --------------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 112,568 514
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 278,112 215,943
-------------- --------------
CASH AND CASH EQUIVALENTS AT END OF
PERIOD $ 390,680 $ 216,457
============== ==============
COMPUWARE CORPORATION AND SUBSIDIARIES
OPERATIONAL HIGHLIGHTS
(dollar amounts in thousands)
QUARTER ENDED QUARTER
------------------ YR-YR ENDED QTR-QTR
JUNE 30, JUNE 30, % MARCH 31, %
2009 2008 Change 2009 Change
--------- --------- --------- --------- ---------
License Fees:
Distributed
Product License
Fees
Vantage $ 9,358 $ 13,724 (31.8%) $ 13,937 (32.9%)
Changepoint 1,316 3,104 (57.6%) 2,528 (47.9%)
Quality 8,154 6,177 32.0% 4,541 79.6%
Uniface 1,474 2,814 (47.6%) 3,287 (55.2%)
DevPartner 1,051 1,689 (37.8%) 1,069 (1.7%)
-------- -------- --------
Total Distributed
Product License
Fees 21,353 27,508 (22.4%) 25,362 (15.8%)
Mainframe Product
License Fees 19,193 33,934 (43.4%) 30,066 (36.2%)
-------- -------- --------
Total License
Fees 40,546 61,442 (34.0%) 55,428 (26.8%)
Maintenance Fees 111,127 126,527 (12.2%) 111,622 (0.4%)
-------- -------- --------
Total Products
Revenue $151,673 $187,969 (19.3%) $167,050 (9.2%)
======== ======== ========
Total Mainframe
Products Revenue $ 99,585 $122,458 (18.7%) $109,836 (9.3%)
Total Distributed
Products Revenue $ 52,088 $ 65,511 (20.5%) $ 57,214 (9.0%)
Total Products
Revenue by
Geography
North America $ 80,608 $ 99,328 (18.8%) $ 87,228 (7.6%)
International $ 71,065 $ 88,641 (19.8%) $ 79,822 (11.0%)
Product Releases
Mainframe 4 8 (50.0%) 5 (20.0%)
Distributed 7 4 75.0% 8 (12.5%)
Total Costs of
Software
Products $ 87,535 $101,981 (14.2%) $ 85,330 2.6%
Deferred license
fees
Current $ 55,961 $ 63,418 (11.8%) $ 59,592 (6.1%)
Long-term $ 47,323 $ 59,267 (20.2%) $ 52,513 (9.9%)
Deferred during
quarter $ 10,679 $ 16,727 (36.2%) $ 27,288 (60.9%)
Recognized
during quarter $ 24,385 $ 23,914 2.0% $ 20,351 19.8%
Professional
Services
Professional
Services
Revenue $ 62,715 $110,619 (43.3%) $ 86,305 (27.3%)
Contribution
Margin 6.1% 6.1% 9.2%
Billable
Headcount 1,650 2,980 (44.6%) 2,116 (22.0%)
Total Company
Headcount 4,275 6,099 (29.9%) 5,006 (14.6%)
Total DSO 159.4 144.6 167.7
Total DSO (Billed) 58.4 67.0 83.4
COMPUWARE CORPORATION AND SUBSIDIARIES
PRODUCTS COMMITMENTS
(In Thousands)
QUARTER ENDED
------------------------------
JUNE 30, JUNE 30,
2009 2008
-------------- --------------
License revenue $ 40,546 $ 61,442
Change in deferred license (13,697) (7,187)
-------------- --------------
License contracts entered into
during period 26,849 54,255
-------------- --------------
Maintenance revenue 111,127 126,527
Change in deferred maintenance (49,441) (13,337)
-------------- --------------
Maintenance contracts & renewals
entered into during period 61,686 113,190
-------------- --------------
Total products commitments during
period $ 88,535 $ 167,445
============== ==============
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.
COMPUWARE CORPORATION AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP INFORMATION
(In Thousands, Except Per Share Data)
QUARTER ENDED
JUNE 30,
-------------------------------
Net income reconciliation: 2009 2008
-------------- --------------
GAAP net income $ 51,047 $ 34,732
Restructuring costs, net of tax 1,607 437
-------------- --------------
Net income as adjusted $ 52,654 $ 35,169
============== ==============
EPS reconciliation:
GAAP diluted EPS $ 0.21 $ 0.13
Restructuring costs, net of tax 0.01
-------------- --------------
Diluted EPS as adjusted $ 0.22 $ 0.13
============== ==============
Compuware undertook restructuring actions in FY09 and FY10. Our
non-GAAP disclosures exclude these charges, primarily employee
termination benefits and facilities costs ( lease abandonments and
property and equipment impairment). We believe it is useful to
exclude these costs when evaluating overall performance.