Compuware Reports First Quarter Earnings

FARMINGTON HILLS, Mich. -- July 18, 2000 -- Compuware Corporation (NASDAQ:CPWR) today announced financial results for its first quarter ended June 30, 2000.

Compuware reports first quarter revenue of $513.9 million, an increase of 16.0 percent from $443.1 million during the same quarter last year. Income from operations decreased 69.9 percent to $40.9 million from $135.9 million in the first quarter of the previous fiscal year.

Software license fees decreased 18.8 percent to $130.7 million from $161.0 million in the first quarter of the previous fiscal year. Maintenance fees increased 18.8 percent to $116.1 million from $97.7 million during the same period last year. Professional services fees increased 44.9 percent to $267.1 million from $184.4 million during the first quarter of the previous fiscal year.

Net income before amortization expense (diluted computation) decreased 62.8 percent to $34.3 million from $92.3 million. Before amortization expense, earnings per share (diluted computation) decreased 62.5 percent to 9 cents from 24 cents in the same quarter last year based upon 373.6 million and 385.4 million shares outstanding, respectively.

"We continued to see reduced demand for S390 upgrades and Enterprise License Agreements," said Beth Chappell, Executive Vice President of Corporate Communications and Investor Relations, Compuware Corporation. "We believe the market will be soft for the remainder of fiscal year 2001 as customers grow into purchased Y2K capacity and deploy enterprise e-commerce applications. Over the longer term, we expect demand in the S390 market to pick up, as customers require additional capacity and incorporate data elements from their mainframe systems to support web-based applications.

"We have made nice progress in the sales of our distributed products. Our sales team is beginning to focus and work closely with our customers on their e-commerce applications. As these applications become more complex, or 'industrial strength,' we expect to see increasing demand for our distributed products and services.

"Our professional services business is on a positive trajectory. Margins improved significantly in the quarter. While we are pleased with this progress and are on track with our plans for modest margin improvements quarter-over-quarter, we will not rest until the services margins return to historical levels," Chappell concluded.

Compuware Corporation

With fiscal 2000 revenues of more than $2.2 billion, Compuware is a world leader in the practical implementation of enterprise and e-commerce solutions. Compuware software products and professional services help 14,000 of the world's largest corporations more efficiently maintain and enhance their most critical business applications. Compuware products and services improve quality, lower costs and increase the speed at which systems can be developed, implemented and supported, providing an immediate and measurable return on information technology investments. Compuware employs more than 15,000 information technology professionals worldwide. For more information about Compuware, please contact the corporate offices at 800-521-9353. You may also visit Compuware on the World Wide Web at http://www.compuware.com.