DETROIT, May 24, 2011 (GLOBE NEWSWIRE) -- Compuware Corporation (Nasdaq:CPWR), the technology performance company, today announced financial results for its fourth quarter and fiscal year ended March 31, 2011.
"Compuware and its growth drivers produced a strong fiscal year 2011," said Compuware President and COO Bob Paul. "Our unique abilities to solve key business problems in the application performance management and secure collaboration markets in particular have driven phenomenal growth, which we expect to continue. Combined with our laser focus on profitability in Mainframe Solutions, Professional Services and Uniface, we have positioned Compuware to deliver increases in revenues, earnings per share and operating cash flow for fiscal 2012." Fiscal Year 2011 Results
During the fiscal year ended March 31, 2011, Compuware increased its total revenues, software license fees, maintenance and subscription fees, and professional services fees year-over-year. Maintenance and subscription fees were $487.0 million, up from $456.3 million in the previous year. Software license fees were $194.7 million compared to $194.5 million in the previous year. Professional services fees were $247.2 million, up from $241.3 million in the previous year.
Fiscal year 2011 revenues were $928.9 million, up from $892.2 million in the previous fiscal year. GAAP net income was $107.4 million in fiscal year 2011, compared to $140.8 million (GAAP) and $93.7 million (pro forma) in fiscal year 2010. GAAP earnings per share were 48 cents in FY '11 compared to 60 cents (GAAP) and 40 cents (pro forma) in FY '10, based upon 226.1 million and 234.6 million shares outstanding, respectively.
Fiscal year 2010 net income and earnings per share benefited from a non-recurring $52.4 million gain from the divestiture of certain product lines and $20.7 million in other income related to a legal settlement. Fourth Quarter Fiscal Year 2011 Results
During the company's fourth quarter, software license fees were $55.7 million, up from $51.8 million in the fourth quarter last year. Maintenance and subscription fees were $124.0 million in the fourth quarter, up from $117.9 million in the fourth quarter last year. Revenue from professional services in the fourth quarter was $69.9 million, up from $60.3 million in the same quarter last year.
During the fourth quarter, total revenues were $249.6 million, up from $230.0 million in the fourth quarter last year. Net income was $34.8 million, compared to $37.4 million in the fourth quarter last year. Earnings per share were 16 cents compared to 16 cents last year, based upon 224.4 million and 228.7 million shares outstanding, respectively. Fourth Quarter Fiscal Year 2011 Highlights
During the fourth quarter, Compuware: Use of Non-GAAP Financial Information
*Compuware acquired Gomez on November 9, 2009; only revenue following the acquisition date is included in the FY '11 GAAP comparisons of total APM license and subscription fees. The pro forma FY '11 comparison is presented as if the acquisition occurred as of the beginning of FY '10.
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 a non-GAAP measure for net income and earnings per share. 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
Compuware Corporation, the technology performance company, provides software, experts and best practices to ensure technology works well and delivers value. Compuware solutions make the world's most important technologies perform at their best for leading organizations worldwide, including 46 of the top 50 Fortune 500 companies and 12 of the top 20 most visited U.S. web sites. Learn more at: http://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 in the United States should call 800-230-1766. For international access, the conference call number is +1-612-332-0819. 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 195564. 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
2011
2010
CURRENT ASSETS:
Cash and cash equivalents
$ 180,244
$ 149,897
Accounts receivable, net
474,479
456,504
Deferred tax asset, net
40,756
46,286
Income taxes refundable
6,815
6,160
Prepaid expenses and other current assets
40,446
46,434
Total current assets
742,740
705,281
PROPERTY AND EQUIPMENT, LESS ACCUMULATED
DEPRECIATION AND AMORTIZATION
333,166
341,696
CAPITALIZED SOFTWARE AND OTHER
INTANGIBLE ASSETS, NET
83,001
84,755
ACCOUNTS RECEIVABLE
206,887
222,344
DEFERRED TAX ASSET, NET
35,754
38,969
GOODWILL
607,765
591,870
OTHER ASSETS
29,064
28,410
TOTAL ASSETS
$ 2,038,377
$ 2,013,325
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable
$ 18,931
$ 15,713
Accrued expenses
105,242
110,732
Income taxes payable
12,286
16,314
Deferred revenue
462,376
469,834
Total current liabilities
598,835
612,593
DEFERRED REVENUE
393,780
398,515
ACCRUED EXPENSES
28,016
33,193
DEFERRED TAX LIABILITY, NET
65,134
55,211
Total liabilities
1,085,765
1,099,512
SHAREHOLDERS' EQUITY:
Common stock
2,177
2,250
Additional paid-in capital
654,109
606,484
Retained earnings
297,067
305,441
Accumulated other comprehensive loss
(741)
(362)
Total shareholders' equity
952,612
913,813
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$ 2,038,377
$ 2,013,325
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,
2011
2010
2011
2010
REVENUES:
Software license fees
$ 55,650
$ 51,825
$ 194,745
$ 194,504
Maintenance and subscription fees
124,030
117,899
486,958
456,343
Professional services fees
69,871
60,274
247,227
241,332
Total revenues
249,551
229,998
928,930
892,179
OPERATING EXPENSES:
Cost of software license fees
3,788
3,535
14,216
15,430
Cost of maintenance and subscription fees
16,123
14,263
57,949
42,555
Cost of professional services
61,130
52,812
216,950
216,861
Technology development and support
24,379
25,568
90,330
91,245
Sales and marketing
67,123
59,574
243,771
222,447
Administrative and general
39,423
42,975
155,400
164,633
Restructuring costs
3,118
7,960
Gain on divestiture of product lines
(52,351)
Total operating expenses
211,966
201,845
778,616
708,780
INCOME FROM OPERATIONS
37,585
28,153
150,314
183,399
OTHER INCOME
Interest income
1,289
1,093
4,456
4,970
Settlement
20,734
20,734
Other
70
65
6
17
OTHER INCOME, NET
1,359
21,892
4,462
25,721
INCOME BEFORE INCOME TAXES
38,944
50,045
154,776
209,120
INCOME TAX PROVISION
4,139
12,684
47,335
68,314
NET INCOME
$ 34,805
$ 37,361
$ 107,441
$ 140,806
DILUTED EPS COMPUTATION
Numerator: Net income
$ 34,805
$ 37,361
$ 107,441
$ 140,806
Denominator:
Weighted-average common shares outstanding
217,949
226,306
220,616
232,634
Dilutive effect of stock options
6,476
2,428
5,479
1,931
Total shares
224,425
228,734
226,095
234,565
Diluted EPS
$ 0.16
$ 0.16
$ 0.48
$ 0.60
COMPUWARE CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands)
TWELVE MONTHS ENDED
MARCH 31,
2011
2010
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Net income
$ 107,441
$ 140,806
Adjustments to reconcile net income to cash provided
by operations:
Gain on divestiture of product lines
(52,351)
Depreciation and amortization
50,332
44,997
Asset impairment
1,567
Stock award compensation
18,768
17,444
Deferred income taxes
22,874
12,141
Other
610
1,242
Net change in assets and liabilities, net of effects from acquisitions,
the divestiture and currency fluctuations:
Accounts receivable
16,119
64,487
Prepaid expenses and other current assets
5,280
(4,470)
Other assets
2,656
(2,666)
Accounts payable and accrued expenses
(16,409)
(1,040)
Deferred revenue
(36,569)
17,455
Income taxes
(11,066)
(13,300)
Net cash provided by operating activities
160,036
226,312
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of:
Business, net of cash acquired
(18,165)
(284,393)
Property and equipment
(19,073)
(9,576)
Capitalized software
(15,531)
(9,778)
Net proceeds from divestiture of product lines
64,992
Net cash used in investing activities
(52,769)
(238,755)
CASH FLOWS USED IN FINANCING ACTIVITIES:
Proceeds from borrowings on credit facility
51,000
Payments on credit facility
(51,000)
Net proceeds from exercise of stock options including excess tax benefits
80,366
5,475
Employee contribution to common stock purchase plans
2,504
2,215
Repurchase of common stock
(164,515)
(132,941)
Net cash used in financing activities
(81,645)
(125,251)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
4,725
9,479
NET DECREASE IN CASH AND CASH EQUIVALENTS
30,347
(128,215)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
149,897
278,112
CASH AND CASH EQUIVALENTS AT END OF PERIOD
$ 180,244
$ 149,897
COMPUWARE CORPORATION AND SUBSIDIARIES OPERATIONAL HIGHLIGHTS (Dollar Amounts In Thousands)
QUARTER
QUARTER
ENDED
ENDED
MAR 31, YR - YR DEC 30, QTR - QTR 2011 2010 % Chg 2010 % Chg Products:
Software License Fees:
Distributed License Fees:
Vantage
$ 24,301
$ 16,988
43.0%
$ 21,059
15.4%
Changepoint
3,081
2,695
14.3%
1,545
99.4%
Uniface
4,793
2,713
76.7%
2,671
79.4%
Other
37
590
(93.7%)
155
(76.1%)
Distributed License Fees
32,212
22,986
40.1%
25,430
26.7%
Mainframe License Fees
23,438
28,839
(18.7%)
34,722
(32.5%)
Total Software License Fees
55,650
51,825
7.4%
60,152
(7.5%)
Maintenance and Subscription Fees:
Distributed Products
27,850
26,819
3.8%
28,879
(3.6%)
Mainframe Products
77,231
79,993
(3.5%)
77,442
(0.3%)
Subscription (Gomez)
18,949
11,087
70.9%
17,841
6.2%
Total Maintenance and Subscription Fees
124,030
117,899
5.2%
124,162
(0.1%)
Total Product Software Revenue:
Distributed Products
60,062
49,805
20.6%
54,309
10.6%
Mainframe Products
100,669
108,832
(7.5%)
112,164
(10.2%)
Subscription (Gomez)
18,949
11,087
70.9%
17,841
6.2%
Total Product Software Revenue
$ 179,680
$ 169,724
5.9%
$ 184,314
(2.5%)
Total Product Software Revenue by Geography
North America
$ 95,541
$ 91,417
4.5%
$ 96,171
(0.7%)
International
$ 84,139
$ 78,307
7.4%
$ 88,143
(4.5%)
Total Cost of Product Software Revenue
$ 111,413
$ 102,940
8.2%
$ 103,973
7.2%
Deferred License Fees
Current
$ 41,725
$ 50,514
(17.4%)
$ 42,813
(2.5%)
Long-term
$ 24,345
$ 43,350
(43.8%)
$ 28,650
(15.0%)
Deferred During Quarter
$ 8,103
$ 7,729
4.8%
$ 9,188
(11.8%)
Recognized During Quarter
$ 14,704
$ 18,342
(19.8%)
$ 15,620
(5.9%)
Professional Services:
Professional Services Segment Fees
$ 52,626
$ 49,858
5.6%
$ 48,332
8.9%
Application Services Segment Fees
17,245
10,416
65.6%
14,379
19.9%
Total Professional Services Fees
$ 69,871
$ 60,274
15.9%
$ 62,711
11.4%
Professional Services Segment Contribution Margin
15.9%
14.7%
15.0%
Application Services Segment Contribution Margin
2.3%
1.2%
11.5%
Total Professional Services Fees Contribution Margin
12.5%
12.4%
14.2%
Billable Professional Services Segment Headcount
1,312
1,218
7.7%
1,265
3.7%
Application Services Segment Headcount
300
305
(1.6%)
277
8.3%
Other:
Total Company Headcount
4,396
4,336
1.4%
4,329
1.5%
Total DSO (Billed)
79.8
75.4
95.4
Total DSO
171.1
178.6
188.6
COMPUWARE CORPORATION AND SUBSIDIARIES RECONCILIATION OF NON-GAAP INFORMATION (In Thousands, Except Per Share Data)
TWELVE MONTHS ENDED
MARCH 31,
Net income reconciliation: 2011 2010
GAAP net income
$ 107,441
$ 140,806
Gain on divestiture of product lines (a)
--
(33,850)
Settlement (b)
--
(13,270)
Net income as adjusted
$ 107,441
$ 93,686
EPS reconciliation:
GAAP diluted EPS
$ 0.48
$ 0.60
Gain on divestiture of product lines (a)
--
(0.14)
Settlement (b)
--
(0.06)
Diluted EPS as adjusted
$ 0.48
$ 0.40
(a) Compuware divested its Quality and DevPartner product lines during the first quarter of fiscal 2010. For comparison purposes, the gain recorded as a result of this divestiture is being excluded from the twelve months ended March 31, 2010 period.
(b) Settlement relates to our settlement with IBM in March 2005 whereby IBM was committed to purchase software licenses and maintenance from the Company totaling $140 million over five years ending in fiscal 2010. The amount of the annual commitment not used to purchase software licenses and maintenance was recorded to other income. For comparison purposes, the portion of the settlement recorded to other income is being excluded from the twelve months ended March 31, 2010 period.
COMPUWARE CORPORATION AND SUBSIDIARIES PRODUCT COMMITMENTS (In Thousands)
QUARTER ENDED TWELVE MONTHS ENDED
MARCH 31, MARCH 31, MARCH 31, MARCH 31,
2011 2010 2011 2010
License fees
$ 55,650
$ 51,825
$ 194,745
$ 194,504
License fees - divested products (a)
--
--
--
(8,724)
License fees excluding divested products
55,650
51,825
194,745
185,780
Change in deferred license fees excluding divested products (a)
(6,601)
(10,613)
(31,269)
(17,929)
License contracts entered into during period excluding divested products 49,049 41,212 163,476 167,851
Maintenance and subscription fees
124,030
117,899
486,958
456,343
Maintenance fees - divested products (a)
--
--
--
(4,839)
Maintenance and subscription fees excluding divested products
124,030
117,899
486,958
451,504
Change in deferred maintenance and subscription fees excluding divested products (a)
45,778
28,324
(18,325)
19,351
Maintenance and subscription contracts & renewals entered into during period excluding
divested products 169,808 146,223 468,633 470,855
Total products commitments during period excluding divested products $ 218,857 $ 187,435 $ 632,109 $ 638,706
(a) Compuware divested its Quality and DevPartner product lines during the first quarter of fiscal 2010. For comparison purposes, the Products Commitments schedule excludes Quality and DevPartner license revenue, maintenance revenue and product commitments from the twelve months ended March 31, 2010 period.
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. CONTACT: Press Contact
Lisa Elkin
Vice President, Communications and Investor Relations
+1-313-227-7345
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