Compuware Reports Fiscal Year 2005 First Quarter Results

DETROIT--July 22, 2004--Compuware Corporation (NASDAQ: CPWR) today announced financial results for its first quarter ended June 30, 2004. "Compuware’s first quarter miss was almost entirely based on a shortfall in new license deals in the final month of the quarter," said Compuware Chairman and CEO Peter Karmanos, Jr. "I am absolutely committed to doing everything necessary to meet Compuware targets for this fiscal year."

First Quarter Fiscal 2005 Results

Compuware reports first quarter revenues of $287.1 million, compared to $306.0 million in the first quarter of the previous fiscal year. Net income was $644,000 compared to $2.6 million in the same quarter of fiscal 2004. Earnings per share (diluted computation) were break-even compared to one cent, based upon 388.4 million and 384.0 million shares outstanding, respectively. During the company’s first quarter, software license fees were $54.1 million, compared to $55.3 million in the same quarter of the previous year. Maintenance fees were $103.5 million, compared to $101.6 million in the first quarter of fiscal 2004. Revenue from professional services was $129.5 million, compared to $149.1 million in the same quarter last year. First Quarter

Fiscal Year 2005 Highlights

During the first quarter, Compuware:

Announced it acquired privately held Changepoint Corporation. The acquisition augments Compuware’s ability to help CIOs effectively manage scarce resources to maximize the value IT brings to their business.
Announced that Changepoint Version 8.01, now rebranded as Compuware IT Governance by Changepoint, won the 2004 Well-Connected Award in the category of IT Portfolio Management Solutions by CMP Media LLC’s Network Computing. Changepoint Version 8.01 was chosen for its unique collaboration features, approach and consideration of intangible benefits in evaluating the value of IT investments, high level of automation around portfolio management and method for encouraging process compliance and software adoption.
Announced an agreement with General Motors to use Covisint Connect data messaging service. This strategic move for GM will support traditional EDI as well as future ebXML-based communications through an advanced technology platform. More than 6,000 GM supplier manufacturing locations will migrate to Covisint Connect.
Announced it had signed an agreement with the Automotive Group of Johnson Controls, Inc. to make Covisint Connect its data messaging service.
Announced the general availability of Compuware Vantage 9.1, the first comprehensive solution to tie infrastructure management to service management, which helps to better align the use of IT resources with the requirements of the business.
Announced the release of version 4.1 of the Compuware Application and Reliability Solution (CARS), its comprehensive quality management solution. CARS 4.1 extends management-level visibility into quality assurance processes and enables greater optimization when managing risk during application development and deployment.
Unveiled Compuware OptimalJ, 3.2, the company’s advanced, model-driven pattern-based development environment. New features in Compuware OptimalJ 3.2 further expand the product’s coverage across all phases of the development life cycle and enhance OptimalJ’s value and usability for all members of the development team.
Announced a new services partnership with SAP America, Inc. The partnership will deliver a go-to-market strategy designed to help customers reduce the total cost of ownership of SAP deployments by improving application reliability and performance. The combination of Compuware services with SAP® solutions will enable customers to ensure the reliability and maximize the value of their SAP solutions environment, reducing their total cost of ownership.
Announced that its NearShore Development Center in Montreal was expanding to meet the growing customer demand for enterprise application development.
Announced the results of a study commissioned by Compuware and conducted by IDC that revealed that respondents were more likely to use nearshore rather than offshore when the cost benefit is 65 percent or lower than the cost of a U.S. provider. The same survey showed that more than 46 percent of the respondents said the availability of experienced professionals was the most important factor in selecting a service provider.
Announced that the web-based case management system it built for Montgomery County Children Services in Dayton, Ohio, won Application Development Trends’ (ADT) 2004 Innovator Award in the "Application Management and Deployment" category. Winners were selected from a field of more than 65 IT organizations that have undertaken challenging development projects in an effort to improve business results.
Announced its intention to provide Compuware STROBE support for IBM’s zSeries Application Assist Processor (zAAP), planned to be available on the IBM eServer z990 and zSeries 890 servers. Compuware STROBE will provide application performance analysis for Java applications utilizing the new IBM zAAP execution environment on the zSeries platform.
Announced that Compuware DevPartner Studio 7.1 Professional Edition won Visual Studio Magazine’s Readers Choice Award in the "Performance, Profiling and Debugging Tool" category, marking the second consecutive year this product won this award.
Announced it was named to SD Times Magazine’s annual SD Times 100 list for the second consecutive year. Compuware DevPartner Studio was recognized in the "Test and Performance" category, and Compuware OptimalJ was recognized in the "Modeling & Design" category.
Highlighted its strategy to help organizations make IT more efficient and responsive to business needs through the adoption of Service Oriented Architectures by showcasing its portfolio of solutions for the entire application life cycle at the BEA eWorld conference.
Showcased the Microsoft .NET Framework-based automated life cycle solutions of its DevPartner, QACenter and Vantage products at Microsoft Tech•Ed 2004.
Announced the latest version of its functional testing suite of products, Compuware QACenter Enterprise Edition. The new version includes a release of TestPartner, version 5.2, which introduces features that accelerate the functional testing of complex Web, ERP and CRM applications. Also included is new support for testing Microsoft .NET, Java and SAP 6.20 GUI for Windows applications.
Announced the release of version 5.0 of Compuware QACenter Enterprise Edition, which includes significant new functionality that breaks down the barriers between the development and testing phases of the application life cycle by enabling QA teams to understand and manage their testing efforts within the context of the business requirements of an application.
Announced the availability of Compuware Uniface 8.4, the latest version of its proven, unified development environment for designing, building and deploying enterprise business applications.

Compuware Corporation

Compuware Corporation (NASDAQ: CPWR) is a world leader in delivering software and services that enable businesses to manage their enterprises and maximize the value of their IT assets. Compuware solutions accelerate the development, improve the quality and enhance the performance of business-driving applications. Founded in 1973, Compuware serves the world's leading IT organizations, including more than 90 percent of the Fortune 100 companies. Learn more about Compuware at http://www.compuware.com.

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.

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.