Compuware Reports Fiscal Year 2005 Second Quarter Results

DETROIT--October 21, 2004--Compuware Corporation (NASDAQ: CPWR) today announced financial results for its second quarter, which ended September 30, 2004.

"I’m pleased that Compuware met Wall Street expectations for our second quarter," said Compuware Chairman and CEO Peter Karmanos, Jr. "Net income was up over the same quarter last year, driven by increases in distributed and mainframe products sales. Over the remainder of the fiscal year, we will continue to make sales execution our top priority."

Second Quarter Fiscal 2005 Results

Compuware reports second quarter revenues of $295.5 million, compared to $302.8 million in the second quarter of the previous fiscal year. Net income was $7.4 million compared to a loss of $8.5 million in the same quarter of fiscal 2004. Earnings per share (diluted computation) were two cents compared to a loss of two cents, based upon 387.5 million and 382.6 million shares outstanding, respectively.

During the company’s second quarter, software license fees were $65.7 million, compared to $59.4 million in the same quarter of the previous year. Maintenance fees were $104.8 million, compared to $99.4 million in the second quarter of fiscal 2004. Revenue from professional services was $125.0 million, compared to $144.0 million in the same quarter last year.

Second Quarter Fiscal Year 2005 Highlights

During the second quarter, Compuware:

Hosted the inaugural OJX--a next-generation, interactive Java development extravaganza--at the company’s Detroit world headquarters. Java visionaries from Compuware, Sun and BEA presented at the event, which attracted more than 1,000 developers and C-level attendees.
Announced that the newest version of Compuware Vantage, the company’s comprehensive solution for application service management, extended its support for Citrix access infrastructure software.
Introduced new versions of its enterprise application performance management products, Compuware STROBE 3.1 and Compuware iSTROBE 2.0.
Announced that Compuware subsidiary Covisint made available two new services to enable companies to securely share information and business processes with their customers and suppliers--Covisint Identity Management and a lower-cost version of Covisint Communicate.
Filed an emergency motion in its software piracy case against IBM. In the motion, Compuware asked the court to levy severe sanctions and provide other relief against IBM for introducing critical evidence after the close of discovery. Specifically, the filing asked the U.S. District Court for the Eastern District of Michigan to order judgment in favor of Compuware on its claim that IBM stole Compuware’s software source code. In September, the court sanctioned IBM for "gross negligence" in the software piracy portion of Compuware’s case.
Announced that it would demonstrate its Compuware IT Governance by Changepoint solution at the Gartner Project and Portfolio Management Conference in San Diego. Compuware IT Governance by Changepoint was awarded "Best Solution" at the conference, as voted on by the senior IT executives attending the July event.
Announced a partnership with Sogeti, a premier provider of IT consulting services, based on the quality management solution comprised of TMap® (Test Management Approach) and the Compuware Application Reliability Solution (CARS). The combined solution is called "CARS for TMap®." Compuware also introduced an additional strategic partnership with the Professional Services Group of Spherion Corporation to offer and deliver the Compuware Application Reliability Solution (CARS) to its customers.
Announced it attained Certified Partner status in the Oracle PartnerNetwork and that the functional testing portion of Compuware QACenter Enterprise Edition, QARun, was tested and validated with Oracle E-Business Suite applications.
Outlined the strategic roadmap for its Microsoft development solutions over the next 12 months at the Gartner Application Development Summit.
Announced it would host a risk-based testing seminar series in 11 U.S. cities, beginning in October. The seminar, entitled "Safeguard Your Applications: A Unique Approach to Testing" is a half-day, management-level briefing designed to help IT organizations make the most of their current testing assets.
Began hosting free IT executive briefings on effective IT service management strategies in 11 cities featuring executives from Compuware and analysts from Gartner, Inc.
Hosted a free, 16-city DB2 seminar series featuring Susan Lawson, an IBM GOLD Consultant and internationally recognized DB2 author and lecturer. The seminar series, titled "DB2 for z/OS Version 8: Are You Ready?" highlighted the new features of DB2 for z/OS Version 8 and its impact on DB2 subsystem and applications, as well as Compuware’s solutions for DB2.

Compuware Corporation Compuware

Corporation (NASDAQ: CPWR) maximizes the value IT brings to the business by helping CIOs more effectively manage the business of IT. Compuware solutions accelerate the development, improve the quality and enhance the performance of critical business systems while enabling CIOs to align and govern the entire IT portfolio, increasing efficiency, cost control and employee productivity throughout the IT organization. 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 .

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.