updated 1/27/2011 4:17:44 PM ET 2011-01-27T21:17:44

Q3 Highlights:

  • EPS jumps 36.4 percent year-over-year; total revenues increase 7.5 percent year-over-year
  • Total APM (Vantage and Gomez) revenues reach $56.1M, up 34 percent*, on a GAAP basis, year-over-year
  • Covisint revenues grow 32.8 percent year-over-year to $14.4M
  • Non-mainframe solutions revenue up 22.5 percent*, on a GAAP basis, year-over-year
  • Professional Services segment contribution margin reaches 15 percent

DETROIT, Jan. 27, 2011 (GLOBE NEWSWIRE) -- Compuware Corporation (Nasdaq:CPWR), the technology performance company, today announced financial results for its third quarter ended December 31, 2010.

"Compuware continues to focus on delivering steady increases in revenue, earnings and margins, and Q3 was no exception," said Compuware President and Chief Operating Officer Bob Paul. "Our growth businesses – APM and Covisint – showed great momentum in their multi-billion-dollar markets, both achieving strong growth this quarter. Mainframe renewals remained greater than 90 percent, and Professional Services delivered a 15 percent contribution margin this quarter, as our mature businesses continue to support our aggressive plans for growth in FY '12 and beyond."

Compuware reports third quarter revenues of $247 million, up 7.5 percent from $229.9 million in Q3 last year. Third quarter earnings per share were 15 cents based upon 225.2 million shares outstanding, up 36.4 percent from 11 cents based on 231.1 million shares outstanding in Q3 last year. Third quarter net income was $34 million, up 39.3 percent from $24.4 million in Q3 last year.

During the company's third quarter, software license fees were $60.2 million, up 15.6 percent from $52 million in Q3 last year. Maintenance and subscription fees were $124.2 million in the third quarter, up 5.6 percent from $117.6 million in Q3 last year. Revenue from Professional Services in the third quarter was $62.7 million, up 4.1 percent from $60.3 million in Q3 last year.

Third Quarter Fiscal Year 2011 Highlights

During the third quarter, Compuware:

  • Officially launched CloudSleuth, the industry's only partner-driven cloud community specifically built to spotlight the performance of the cloud's "federated infrastructure."
  • Announced a first-of-its-kind SaaS-based application performance management solution that provides visibility from the First Mile (the data center) to the Last Mile (the end-user).
  • Announced that Covisint had accelerated successful provider payments for physician offices and large health systems from the Centers for Medicare & Medicaid Services for the 2009 Physician Quality Reporting Initiative.
  • Announced that Covisint would demonstrate at the API IT Security Conference how companies can most effectively manage oil and gas identities by quickly building trust relationships for joint ventures, partnerships, customers and suppliers.
  • Announced that Marketing Associates uses Compuware's application performance management solution Gomez and Vantage – to improve the performance and availability of its mission-critical customer applications.
  • Announced that daFlores improved the speed of its web site using the Gomez Web Performance Management monitoring platform, resulting in a 25 percent increase in orders for the online flower delivery company.
  • Announced that it was named a "Top Workplace" by the Detroit Free Press.
  • Released information about – and results from – its new Gomez Retail UX (User Experience) Index top Web and mobile performers for Black Friday through Cyber Monday.
  • Announced that its industry-leading mainframe application development and testing solutions support DB2 Version 10.
  • Published results for the September U.S. Retail Mobile Site Performance Index, which measures the performance of mobile-specific versions of retail websites for 15 leading retailers across four carrier and device combinations.
  • Launched fifteen new international industry benchmarks that provide companies with an unbiased view of the state of website performance.
  • Released information that Covisint was recognized by Everything Channel's CRN Magazine as one of the "Top 100 Healthcare Vendors."
  • Introduced the industry's first mobile application benchmark that measures the iPhone mobile application performance of fifteen leading U.S. retailers across three key metrics: response time, availability and consistency.

Use of Non-GAAP Financial Information

*Compuware acquired Gomez on November 9, 2009; only revenue following the acquisition date is included in the Q3 GAAP comparisons of total APM revenues and non-mainframe solutions revenues. On a pro forma basis APM revenue grew 11.6 percent. Non-mainframe solutions revenues grew 9.4 percent on a pro forma basis.

In addition to reporting financial results in accordance with generally accepted accounting principles, or GAAP, the financial information included with this press release uses non-GAAP measures for revenue. The non-GAAP revenue disclosures provide information on total products commitments and pro forma revenue for Gomez subscription fees as if their results were included in the comparable prior year period. 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 to GAAP information is contained in the financial statements following this press release.

Compuware Corporation

Compuware Corporation, the technology performance company, provides software, experts and best practices to ensure technology works well and delivers value. Compuware solutions make the world's most important technologies perform at their best for leading organizations worldwide, including 46 of the top 50 Fortune 500 companies and 12 of the top 20 most visited U.S. web sites. Learn more at: http://www.compuware.com .

The Compuware logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=5950

Conference Call Information

Compuware will host a conference call to discuss these results at 5 p.m. Eastern time (22:00 GMT) today. To join the conference call, interested parties in the United States should call 800-398-9402. For international access, the conference call number is +1-612-332-0630. No password is required.

A conference call replay will also be available. The United States replay number will be 800-475-6701, and the international replay number will be +1-320-365-3844. The replay passcode will be 182384. Additionally, investors can listen to the conference call via webcast by visiting the Compuware Corporation Investor Relations web site at http://www.compuware.com .

 
COMPUWARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
     
   AS OF DECEMBER 31, 
 ASSETS     
  2010 2009
 CURRENT ASSETS:     
 Cash and cash equivalents  $ 81,863 $ 87,862
 Accounts receivable, net   517,775  509,339
 Deferred tax asset, net   49,861  46,642
 Income taxes refundable   4,624  4,237
 Prepaid expenses and other current assets   30,675  26,198
 Total current assets   684,798  674,278
     
  PROPERTY AND EQUIPMENT, LESS ACCUMULATED

  DEPRECIATION AND AMORTIZATION 
 334,482  346,270
     
  CAPITALIZED SOFTWARE AND OTHER

  INTANGIBLE ASSETS, NET 
 86,133  89,723
     
 ACCOUNTS RECEIVABLE   192,470  234,428
 DEFERRED TAX ASSET, NET   32,061  34,823
 GOODWILL   608,228  592,948
 OTHER ASSETS   33,664  26,760
     
 TOTAL ASSETS  $ 1,971,836 $ 1,999,230
     
 LIABILITIES AND SHAREHOLDERS' EQUITY     
     
 CURRENT LIABILITIES:     
 Accounts payable  $18,139 $17,723
 Accrued expenses   97,422  111,895
 Income taxes payable   21,304  23,207
 Deferred revenue   449,342  459,580
 Total current liabilities   586,207  612,405
     
 LONG TERM DEBT     35,000
     
 DEFERRED REVENUE   354,296  383,274
     
 ACCRUED EXPENSES   36,420  34,364
     
 DEFERRED TAX LIABILITY, NET   56,638  46,704
 Total liabilities   1,033,561  1,111,747
     
 SHAREHOLDERS' EQUITY:     
 Common stock   2,185  2,274
 Additional paid-in capital   636,713  607,035
 Retained earnings   297,419  282,133
 Accumulated other comprehensive income (loss)   1,958  (3,959)
 Total shareholders' equity   938,275  887,483
     
 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $ 1,971,836 $ 1,999,230
 
 
COMPUWARE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, Except Per Share Data)
         
         
  THREE MONTHS ENDED NINE MONTHS ENDED
  DECEMBER 31, DECEMBER 31,
         
  2010 2009 2010 2009
REVENUES:        
 Software license fees $ 60,152 $ 52,023 $ 139,095 $ 142,679
 Maintenance and subscription fees 124,162 117,583  362,928  338,444
 Professional services fees 62,711 60,258  177,356  181,058
 Total revenues 247,025 229,864 679,379 662,181
         
OPERATING EXPENSES:        
 Cost of software license fees 3,745 4,072  10,428  11,895
 Cost of maintenance and subscription fees 15,274 10,968  41,826  28,292
 Cost of professional services 53,811 53,378  155,820  164,049
 Technology development and support 22,517 22,562  65,951  65,677
 Sales and marketing 62,437 58,969  176,648  162,873
 Administrative and general 39,760 42,761  115,977  121,658
 Restructuring costs   1,024    4,842
 Gain on divestiture of product lines        (52,351)
 Total operating expenses 197,544 193,734 566,650 506,935
         
INCOME FROM OPERATIONS 49,481 36,130 112,729 155,246
         
OTHER INCOME (EXPENSES)        
 Interest income 1,351 1,049  3,167  3,877
 Other 25 27  (64)  (48)
         
OTHER INCOME, NET 1,376 1,076 3,103 3,829
         
INCOME BEFORE INCOME TAXES 50,857 37,206 115,832 159,075
         
INCOME TAX PROVISION 16,858 12,794  43,196  55,630
         
NET INCOME  $ 33,999 $ 24,412 $ 72,636 $ 103,445
         
DILUTED EPS COMPUTATION        
Numerator: Net income  $ 33,999 $ 24,412 $ 72,636 $ 103,445
Denominator:        
 Weighted-average common shares outstanding 218,683 229,105  221,490  234,704
 Dilutive effect of stock options 6,475 1,985  3,622  1,847
 Total shares 225,158 231,090 225,112 236,551
Diluted EPS $ 0.15 $ 0.11 $ 0.32 $ 0.44
 
 
COMPUWARE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
     
  NINE MONTHS ENDED
  DECEMBER 31,
  2010 2009
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:    
 Net income $ 72,636 $ 103,445
 Adjustments to reconcile net income to cash provided

 by operations:
   
 Gain on divestiture of product lines   (52,351)
 Depreciation and amortization 37,300 32,476
 Stock award compensation 13,387 12,649
 Deferred income taxes 7,554 7,578
 Other 561 1,061
 Net change in assets and liabilities, net of effects from acquisitions,

 the divestiture and currency fluctuations:
   
 Accounts receivable (23,489) 9,262
 Prepaid expenses and other current assets 14,572 16,338
 Other assets (1,514) (5,626)
 Accounts payable and accrued expenses (11,882) (57)
 Deferred revenue (77,463) (17,994)
 Income taxes 4,123 (3,415)
 Net cash provided by operating activities 35,785 103,366
     
CASH FLOWS USED IN INVESTING ACTIVITIES:    
 Purchase of:    
 Business, net of cash acquired (18,165) (284,393)
 Property and equipment (13,328) (7,070)
 Capitalized software (12,877) (7,427)
 Net proceeds from divestiture of product lines   64,992
 Net cash used in investing activities (44,370) (233,898)
     
CASH FLOWS USED IN FINANCING ACTIVITIES:    
 Proceeds from borrowings on credit facility   35,000
 Net proceeds from exercise of stock options including excess tax benefits 53,331 2,857
 Employee contribution to common stock purchase plans 1,892 1,647
 Repurchase of common stock (116,600) (111,156)
 Net cash used in financing activities (61,377) (71,652)
     
EFFECT OF EXCHANGE RATE CHANGES ON CASH 1,928 11,934
     
NET DECREASE IN CASH AND CASH EQUIVALENTS (68,034) (190,250)
     
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 149,897 278,112
     
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 81,863 $ 87,862
 
 
COMPUWARE CORPORATION AND SUBSIDIARIES
OPERATIONAL HIGHLIGHTS
(Dollar Amounts In Thousands)
 
  QUARTER   QUARTER  
  ENDED   ENDED  
  DEC 31, YR - YR SEP 30, QTR - QTR
  2010 2009 % Chg 2010 % Chg
Products:          
Software License Fees:          
 Distributed License Fees:          
Vantage  $ 21,059  $ 20,376 3.4%  $ 18,231 15.5%
Changepoint  1,545  2,991 (48.3%)  2,248 (31.3%)
Uniface  2,671  2,291 16.6%  2,374 12.5%
Other  155  408 (62.0%)  366 (57.7%)
 Distributed License Fees  25,430  26,066 (2.4%)  23,219 9.5%
 Mainframe License Fees  34,722  25,957 33.8%  22,394 55.1%
Total Software License Fees  60,152  52,023 15.6%  45,613 31.9%
           
Maintenance and Subscription Fees:          
 Distributed Products  28,879  27,993 3.2%  26,810 7.7%
 Mainframe Products  77,442  83,825 (7.6%)  77,541 (0.1%)
 Subscription (Gomez)  17,841  5,765 209.5%  17,656 1.0%
Total Maintenance and Subscription Fees  124,162  117,583 5.6%  122,007 1.8%
           
Total Products Revenue:          
 Distributed Products  54,309  54,059 0.5%  50,029 8.6%
 Mainframe Products  112,164  109,782 2.2%  99,935 12.2%
 Subscription (Gomez)   17,841  5,765 209.5%  17,656 1.0%
Total Products Revenue   $ 184,314  $ 169,606 8.7%  $ 167,620 10.0%
           
Subscription (Gomez) - proforma basis  $ 17,841  $ 14,209 25.6%  $ 17,656 1.0%
           
Total Product Revenue by Geography          
North America  $ 96,171  $ 88,569 8.6%  $ 97,131 (1.0%)
International  $ 88,143  $ 81,037 8.8%  $ 70,489 25.0%
           
Total Cost of Product Revenue   $ 103,973  $ 96,571 7.7%  $ 94,932 9.5%
           
Deferred License Fees          
 Current  $ 42,813  $ 53,404 (19.8%)  $ 43,790 (2.2%)
 Long-term  $ 28,650  $ 51,959 (44.9%)  $ 33,370 (14.1%)
           
 Deferred During Quarter  $ 9,188  $ 25,026 (63.3%)  $ 5,619 63.5%
 Recognized During Quarter  $ 15,620  $ 19,227 (18.8%)  $ 15,584 0.2%
           
Professional Services:          
Professional Services Segment Fees  $ 48,332  $ 49,430 (2.2%)  $ 46,087 4.9%
Application Services Segment Fees  14,379  10,828 32.8%  12,162 18.2%
Total Professional Services Fees  $ 62,711  $ 60,258 4.1%  $ 58,249 7.7%
           
Professional Services Segment Contribution Margin  15.0% 12.1%   12.5%  
Application Services Segment Contribution Margin  11.5% 8.1%   9.9%  
Total Professional Services Fees Contribution Margin  14.2% 11.4%   11.9%  
           
Billable Professional Services Segment Headcount  1,265 1,270 (0.4%)  1,159 9.1%
Application Services Segment Headcount  277 294 (5.8%)  345 (19.7%)
           
Other:          
Total Company Headcount  4,329 4,410 (1.8%)  4,290 0.9%
           
Total DSO (Billed)   95.4  105.9    66.4  
Total DSO  188.6  199.4    172.7  
 
 
COMPUWARE CORPORATION AND SUBSIDIARIES
PRODUCT COMMITMENTS 
(In Thousands)
       
       
  QUARTER ENDED
  DECEMBER 31 SEPTEMBER 30, DECEMBER 31
  2010 2010 2009
       
License fees  $ 60,152  $ 45,613  $ 52,023
       
Change in deferred license fees   (6,432)  (9,965)  5,829
       
License contracts entered into during period   53,720  35,648  57,852
       
       
Maintenance and subscription fees   124,162  122,007  117,583
       
Change in deferred maintenance and subscription fees  27,340  (33,077)  55,570
       
Maintenance and subscription contracts & renewals entered into during period   151,502  88,930  173,153
       
Total products commitments during period   $ 205,222  $ 124,578  $ 231,005
       
       
A significant portion of the company's product software revenue is recognized ratably over the contractual term of the arrangement. Therefore, to supplement the understanding of Compuware's software business, we believe it is important to also consider the amount of product commitments, which represents the full contractual value of each product software arrangement entered into during the reporting period.
CONTACT:  Press Contact
          Lisa Elkin, Vice President, Investor Relations, Marketing 
           and Communications
          lisa.elkin@compuware.com
          313-227-7345
          For Sales and Marketing Information
          Compuware Corporation
          One Campus Martius,
          Detroit, MI 48226
          800-521-9353
          http://www.compuware.com

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.71%
$30K home equity loan FICO 5.26%
$75K home equity loan FICO 4.70%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.42%
13.42%
Cash Back Cards 17.94%
17.94%
Rewards Cards 17.14%
17.14%
Source: Bankrate.com