Launches 3-Year Cost-Reduction Program of At Least
$60 Million, with Minimum of $20 Millionin FY 2014 Savings
Announces Intent to Spin-Off Remaining Covisint Shares to
CompuwareShareholders Following IPO
Board Approves Plan to
Return Capitalto Shareholders through Annual Dividend of $.50Per Share Beginning in Q1 FY 2014
"We are committed to creating value for shareholders and the actions
announced today are focused on increasing profitability, building on the
momentum of our transition to higher-growth businesses, and returning
capital directly to shareholders," said
Launching a 3-year cost reduction plan that will
eliminate at least
$60 millionin G&A and non-core operational expenses from the company, with a minimum of $20 millionrealized in FY 2014. The company expects that additional opportunities to rationalize and reduce costs and focus its business will be available as it continues to execute the plan.
Executing a spin-off of
Covisintto Compuwareshareholders following the initial public offering, to fully unlock the value of this business. In December, Compuwaresubmitted a registration statement for Covisint Corporationto the U.S. Securities and Exchange Commissionfor a possible initial public offering of approximately 20% of its Class A common stock. The company expects that within 12 months of completing the IPO it will be distributing the remaining Covisintshares directly to Compuwareshareholders, enabling shareholders to participate fully and directly in Covisint's future and favorable prospects.
Implementing a plan to return capital to shareholders through an
annual dividend of
$.50per share, at a yield greater than 4.5% based on Compuware's current stock price, payable quarterly starting next quarter. The dividend is a strong indication of the momentum of the company's strategy, the strength of its balance sheet, and the Board's ongoing commitment to disciplined capital allocation as an important means of delivering value to shareholders.
"We believe the execution of this plan will drive the growth of
our key businesses, improve our margins and unlock the substantial value
inherent in our company," concluded
Goldman, Sachs & Co. and
Conference Call Information
A conference call replay will also be available.
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
Senior Vice President, Investor Relations,
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