Compuware Corporation Announces Fourth Quarter and Fiscal Year 2002 Financial Results

FARMINGTON HILLS, Mich. -- May 7, 2002 -- Compuware Corporation (Nasdaq: CPWR) today announced financial results for its fourth quarter and fiscal year ended March 31, 2002.

Fourth Quarter Fiscal 2002 Results

Compuware reports fourth quarter revenues of $407.2 million, compared to $514.5 million in the fourth quarter of the previous fiscal year. Net income before restructuring and impairment and amortization of intangible assets acquired as a result of acquisitions (special charges and amortization expense) in the quarter was $30.1 million, compared to $59.1 million in the same quarter of the previous year. Earnings per share before special charges and amortization expense (diluted computation) were 8 cents, compared to 16 cents in the same period of the previous fiscal year, based upon 389.0 million and 376.3 million shares outstanding, respectively. Net income including special charges and amortization expense incurred in the quarter decreased to a loss of $335.9 million from $46.6 million of net income in the same quarter of the previous fiscal year. Including special charges and amortization expense, earnings per share (diluted computation) were a loss of 90 cents, versus 12 cents of net income for the same period a year ago.

During the company’s fourth quarter, software license fees were $109.5 million, compared to $138.2 million in the same period of the previous fiscal year. Maintenance fees were $106.4 million versus $110.9 million during the same period last year. Revenue from professional services was $191.3 million, compared with $265.4 million in the fourth quarter of fiscal year 2001.

Fiscal Year 2002 Results

During the fiscal year ended March 31, 2002, revenues were $1.729 billion compared with $2.010 billion in fiscal 2001. Before special charges and amortization expense incurred in fiscal year 2002, net income was $161.9 million compared with $163.8 million in the previous fiscal year. Earnings per share before special charges and amortization expense (diluted computation) were 42 cents compared with 44 cents in the prior fiscal year, based upon 385.3 and 372.8 million shares outstanding, respectively. Including special charges and amortization expense incurred in fiscal year 2002, net income was a loss of $245.3 million versus $119.1 million of net income in the previous fiscal year. Earnings per share including special charges and amortization expense (diluted computation) were a loss of 66 cents versus 32 cents of net income in the previous fiscal year.

During the year, software license fees were $417.6 million, compared with $495.6 million in fiscal year 2001. Maintenance revenue was $433.8 million versus $456.5 million in the previous fiscal year. Professional services fees for fiscal year 2002 were $877.2 million compared to $1.058 billion in fiscal year 2001.

Special Charges

Compuware took a special charge in the fourth quarter to cover the cost of its restructuring activities and the company’s goodwill and acquired technology impairment expense.

Special Charges (In Thousands)

Quarter Ended

Year Ended

March 31, 2002

March 31, 2002

Pre-tax

After-tax

Pre-tax

After-tax

Goodwill Impairment

$378,120

$324,034

$387,418

$332,898

Purchased Software Impairment

4,328

2,813

4,328

2,813

Restructuring Charge

46,930

29,096

46,930

29,096

Total Special Charges

$429,378

$355,943

$438,676

$364,807

"While Compuware’s fundamental financial position remains outstanding and we continue to be profitable, our fourth quarter results concluded what has been a less than satisfactory fiscal year for our company," said Peter Karmanos, Jr., Compuware Chairman and CEO. "An economic hangover continues to affect our industry causing reluctance by customers to make significant new investments in technology. The changes we have made to step-up our efforts to deliver customer value are improving Compuware’s profitability going forward and better positioning the company for long-term growth-benefiting our employees and shareholders."

Compuware Corporation

Compuware Corporation, a multi-billion dollar company, 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. 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/.

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.