Compuware Corporation Announces Preliminary Financial Results

DETROIT--January 11, 2008--Compuware Corporation (NASDAQ: CPWR) today announced preliminary financial results for its quarter ended December 31, 2007.

“Compuware’s products division had a good Q3, demonstrated by the $35 million year-over-year increase in total product commitments,” said Compuware Chairman and CEO Peter Karmanos, Jr. “There was a high ratio of ratable versus up-front recognition for new software licenses in the quarter, and this resulted in lower than expected revenue and EPS for Q3. However, we all know that this is great for the long-term health of the business.

“Q3 also featured great cash flow from operations and an approximate $14 million year-over-year reduction in total operating expenses, before restructuring costs,” continued Karmanos. “We will continue our efforts to systematically contain costs and will do what is necessary to drive revenues going forward.”

The following financial metrics are for the quarters ending December 31, 2007 and 2006 (in millions, except earnings per share). All amounts are based on preliminary results.

2007

2006

Change

Total product commitments*

$ 204

$ 169

$ 35

License revenue

$ 79

$ 86

$ (7)

Maintenance revenue

$ 120

$ 114

$ 6

Professional services revenue

$ 110

$ 115

$ (5)

Operating expenses

$ 263

$ 272

$ (9)

Operating expenses, before restructuring costs*

$ 258

$ 272

$ (14)

Earnings per share

$ 0.13

$ 0.11

$ 0.02

Earnings per share, before restructuring costs*

$ 0.14

$ 0.11

$ 0.03

Cash flow from operations

$ 50

$ 21

$ 29

*Non-GAAP financial information

Compuware will announce final results for its fiscal 2008 third quarter on January 24, 2008.

Use of Non-GAAP Financial Information

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, this press release uses non-GAAP measures of operating expenses, earnings per share and revenue. The operating expense and earnings per share disclosures on a non-GAAP basis excluded the impact of restructuring charges. The non-GAAP revenue disclosures provide information on total product commitments. Compuware management believes the non-GAAP financial information provided in this release is useful to investors’ understanding and assessment of Compuware's ongoing core operations and prospects for the future. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. Management uses both GAAP and non-GAAP information in operating and evaluating its business and as such has determined that it is important to provide this information to investors. A reconciliation of non-GAAP and GAAP earnings is continued in the financial statements following this release.

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 http://www.compuware.com/.