Compuware Reports Fiscal Year ‘04 First Quarter Results

DETROIT--July 22, 2003--Compuware Corporation (NASDAQ: CPWR) today announced financial results for its first quarter ended June 30, 2003.

Compuware reports first quarter revenues of $306.0 million, compared to $346.6 million in the first quarter of the previous fiscal year. Net income was $2.6 million compared to $22.5 million in the same quarter of fiscal 2003. Earnings per share (diluted computation) were 1 cent compared to 6 cents, based upon 384.0 million and 378.5 million shares outstanding, respectively.

During the company’s first quarter, software license fees were $55.3 million, maintenance fees were $101.6 million and revenue from professional services was $149.1 million.

"This was a tough quarter for Compuware, and I am terribly disappointed with our results," said Chairman and CEO Peter Karmanos, Jr. "While we were profitable and maintained a solid balance sheet with $614 million in cash and investments, we fell short of our revenue goals. We think that a turnaround in IT spending is at least a quarter away."

Karmanos added: "While we were not happy with our numbers this quarter, we are still very optimistic about the future of our company. We have the best products in our industry, our sales staff is repositioned to sell them, our professional services are competitively priced, and we have exciting new initiatives that are ‘one-of-a-kinds’ in our market. Our success depends upon our ability to execute."

First Quarter Fiscal Year 2004 Highlights

During the first quarter, Compuware:

Announced that it is launching four key initiatives designed to help customers put applications into action. These four initiatives are:

- Compuware Application Reliability Solution (CARS)--a solution designed to improve organizational effectiveness by linking development, quality assurance and operations. CARS gives organizations the confidence that applications will meet business and operational requirements. Formally launched during Q1, CARS provides greater control over application delivery by uniting proven processes, a rich portfolio of technology and quality assurance expertise.

- Compuware OptimalJ--an enterprise application development environment designed for organizations that are seeking to accelerate the development, integration and maintenance of J2EE applications.

- Compuware Vantage--a comprehensive performance management solution for monitoring the entire application from the end-user, through the network, to the server and the database tiers.

- The Compuware NearShore Development Center (NSDC)--conveniently located in Montreal, Canada, the NSDC enables IT organizations to reduce development costs and risk, and enables them to deliver quality applications through the use of highly skilled people, processes and products.

Released the findings of two studies supporting its strategic initiatives. The first study reported that slow development cycles are the No. 1 application challenge; nearly half of the respondents in the study agreed that adopting model- and pattern-driven development provides companies with definite development advantages. The second study linked application failure to material revenue loss. This study found that 52 percent of the IT and business executives questioned directly experienced material revenue loss due to application failure.
Made STROBE 3.0 and iSTROBE 1.1 generally available. By implementing an Application Performance Management program that includes STROBE and iSTROBE, IT organizations can meet the challenge of controlling costs, satisfying customers and supporting corporate growth, while reducing the demand their applications make for system resources.
Introduced Compuware DevPartner Java Edition 3.0.1, the latest version of its software development productivity suite. This version enables a broader base of enterprise customers to accelerate the delivery of reliable, high-performance Java applications. DevPartner Java Edition also integrates with Compuware OptimalJ in order to help accelerate and improve Java application development, debugging, testing and deployment while ensuring software reliability, scalability and performance.
Announced that its DevPartner development products will be integrated with Visual Studio .NET 2003. The DevPartner family of products accelerates software development and improves the quality of code.
Announced a partnership between Compuware and BEA Systems, INC. to deliver a comprehensive application life cycle solution. Compuware will extend its existing support for BEA Systems WebLogic Server across its application development, testing and management product lines. This partnership will involve many Compuware products including OptimalJ, DevPartner, QACenter and Vantage.
Introduced XPEDITER/DevEnterprise 4.0. XPEDITER/DevEnterprise analyzes and understands critical components in applications to fulfill new business requirements. It can also provide insight into how an application change could impact multiple applications, minimizing the risk involved in putting new applications into production.
Won Outsourcing Center’s 2003 Editor’s Choice Award as the industry’s "Most Improved Process" outsourcing relationship for its partnership with Detroit Public Schools (DPS). Compuware provides IT services for DPS in areas such as human resources, finance and budget operations, student information services as well as special education and others. This partnership has allowed DPS to save more than $3 million.
Announced its support for IBM’s eServer zSeries 990. In an effort to recognize the business needs of its customers, Compuware’s early support program for z990 includes planned delivery and support of specific Compuware products for validation in z990 customer environments.
Introduced UNIFACE 8.3. UNIFACE is an enterprise development environment for building, renewing and integrating the largest and most complex business applications. With the release of version 8.3, UNIFACE can now be made available as a Web Service, which enables integration between UNIFACE, J2EE, .NET and legacy applications.
Topped the SD Times 100 list as the software development industry leader and innovator of test and debug solutions. In addition, Compuware Vantage was the recipient of the prestigious Yphise award for the Best Application Performance Management Software.

Conference Call Information

Compuware will host a conference call today to discuss these results at 5:00 p.m. Eastern time (21:00 GMT). Interested parties calling from the United States should call 877-459-8388. For international access, the conference call number is +1-484-630-8751. The password for the conference call is Compuware. A conference call replay will also be available. For more information, visit the Compuware Corporation Investor Relations web site at http://www.compuware.com.

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.