Compuware First Quarter Earnings Increase More Than 30 Percent

Compuware Reports 12 Cents Per Share Earnings

FARMINGTON HILLS, Mich. -- July 19, 2001 -- Compuware Corporation (Nasdaq: CPWR) today announced financial results for its first quarter ended June 30, 2001.

Compuware reports first quarter revenues of $446.7 million, compared to $513.9 million in the first quarter of the previous fiscal year. Net income before amortization expense increased 31.6 percent to $45.2 million from $34.3 million in the same quarter of fiscal 2001. Net income including amortization expense increased 45.4 percent to $34.4 million from $23.6 million in the same period of the previous fiscal year. Earnings per share before amortization expense (diluted computation) increased 33.3 percent to 12 cents from 9 cents, based upon 382.2 million and 373.6 million shares outstanding, respectively. Including amortization expense, earnings per share (diluted computation) increased 50 percent to 9 cents per share, from 6 cents per share in the first quarter of fiscal 2001.

During the company's first quarter, software license fees were $95.6 million, compared to $130.7 million in the same period of the previous fiscal year. Maintenance fees were $110.8 million versus $116.1 million during the same period last year. Revenue from professional services was $240.3 million, compared with $267.1 million in the first quarter of fiscal 2001.

"We are pleased to have increased earnings and beaten consensus EPS estimates for the quarter and to have used our strong cash flow to reduce debt by $88 million," said Joseph A. Nathan, Compuware President and Chief Operating Officer. "Growth in earnings indicates that we continue to have exceptional leverage to increase future profitability as market conditions improve," Nathan said.

First Quarter Fiscal Year 2002 Highlights

During the first quarter, Compuware:

Announced that it would offer development suites, performance management tools, automated software quality testing support and wireless solutions support for Microsoft .NET applications.
Formed a strategic relationship with Sun Microsystems to further the adoption of Java™ technology in the enterprise as the vehicle for creating, assembling and deploying web services within Sun's Open Net Environment. The strategic relationship includes joint product development, marketing and professional services initiatives.
Released QAHiperstation 7.0. The new release provides support for the IBM WebSphere software platform for e-business, enabling organizations to leverage their mainframe investments for e-business deployments.
Launched OptimalJ, a new class of advanced development environment. OptimalJ enables the rapid design, development and deployment of reliable, high-performance Java 2 Platform, Enterprise Edition business applications.
Introduced OptimalView, an out-of-the-box enterprise portal with powerful integration, component-based development and workflow options. OptimalView integrates static and dynamic information from different sources, from applications running on different platforms and written in different languages and from business processes running within and between organizations into a unified portal interface.
Introduced its new value-based licensing model for eligible enterprise software products to be deployed on the recently introduced IBM z/900 series hardware platform. This new licensing model permits customers to define their capacity needs for Compuware product deployment independently of the IBM z/900 "footprint" capacity.
Announced that Application Expert was named "Product of the Year" in the category of Application Management by CMP Media Inc. for the Network Computing 2001 Well-Connected Award. EcoPREDICTOR was also recognized by Network Computing and nominated as a finalist leading up to the 2001 Well-Connected Award.

Compuware Corporation

With fiscal 2001 revenues of more than $2 billion, Compuware Corporation provides business value through software and professional services that optimize productivity and reduce costs across the application life cycle. Meeting the rapidly changing needs of businesses of all sizes, Compuware's market-leading solutions improve the quality, ease the integration and enhance the performance of distributed, e-business and enterprise software. Compuware employs approximately 13,000 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.