DETROIT (Map) - DETROIT, May 15 /PRNewswire-FirstCall/ -- Compuware Corporation (Nasdaq: CPWR) today announced final financial results for its fourth quarter and fiscal year ended March 31, 2008.

"With an excellent performance in Q4, Compuware closed a solid year of growth on a very high note," said Compuware Chairman and CEO Peter Karmanos, Jr. "For more than 35 years, Compuware has helped its customers economically benefit their businesses through powerful products and talented technical people. In the coming year, we will capitalize further on our heritage by becoming an even more focused, customer-responsive and dynamic company. I expect the results to be strong."

Fiscal Year 2008 Results

During the fiscal year ended March 31, 2008, revenues were $1.23 billion, up from $1.21 billion in the previous fiscal year. Net income-before restructuring charges and capitalized software impairment-was $164.6 million compared to $158.1 million in fiscal 2007. Earnings per share-diluted computation before restructuring charges and capitalized software impairment- were 57 cents, an increase of 27 percent from 45 cents in fiscal 2007, based upon 287.6 million and 351.0 million shares outstanding, respectively. On a GAAP basis, net income was $134.4 million and earnings per share were 47 cents in fiscal 2008.

During fiscal 2008, software license fees were $297.5 million, up from $283.4 million in fiscal 2007. Maintenance revenue was $476.4 million in fiscal 2008, compared to $457.6 million in fiscal 2007. Professional services fees for fiscal 2008 were $455.7 million, compared to $472.0 million in fiscal 2007.

Fourth Quarter Fiscal 2008 Results

Compuware reports fourth quarter net income-before restructuring charges- of $63.1 million on revenues of $338.9 million. On a GAAP basis, net income was $61.2 million in Q4. Earnings per share-diluted computation-were 23 cents, based upon 268.7 million shares outstanding.

During the company's fourth quarter, software license fees were $100.8 million, an increase of 38 percent from $73.2 million in the same quarter last year. Maintenance fees were $126.3 million during the quarter, an increase of more than seven percent from $117.7 million in the same quarter last year. Fourth quarter revenue from professional services was $111.8 million, compared to $122.1 million in the same quarter last year.

Compuware 2.0 Launch

The company today formally launched Compuware 2.0, along with the official introduction of its new global theme "We make IT rock around the world" and a new microsite, www.wemakeitrockaroundtheworld.com.

"Compuware 2.0 is not a campaign, a one-time initiative or a message. Compuware 2.0 is a rebirth based on the company's longtime principles and anchored by definable, actionable and measurable objectives," explained Compuware President and Chief Operating Officer Bob Paul. "While there is a marketing component to Compuware 2.0, the core of this effort is in approaching the market in a fresh way and delivering quantifiable economic value to our customers."

    Among the specific objectives for Compuware 2.0 are:
    -- Instituting and communicating a strategic vision for the company that
       positions it as a best-in-class provider of solutions that customers-in
       the markets where Compuware chooses to compete-have a compelling reason
       to buy.
    -- Going to market with complete solutions to compelling business problems
       by combining software, best practices and professional services.
    -- Establishing and extending a lively, engaging corporate brand identity
       that customers and employees identify with, understand and trust.
    -- Deploying a global recruiting, training and career development function
       to attract and retain the highest quality professionals.
    For full details, visit www.wemakeitrockaroundtheworld.com.
    Fourth Quarter Fiscal Year 2008 Highlights
    During the fourth quarter, Compuware:
    -- Announced that the company promoted Robert C. Paul to the position of
       President and Chief Operating Officer, leading the company's products
       and services operations, Compuware 2.0 effort and other key functions.
    -- Acquired privately held Hilgraeve, Inc. This acquisition made Compuware
       Covisint the world's largest on-demand collaboration platform for lab
       and prescription data sharing.
    -- Launched a new initiative to provide hospitals and physicians with the
       means to more effectively navigate the dynamically changing healthcare
       technology environment. Compuware's IT Service Management for
       Healthcare initiative drives improved patient care, reduces costs for
       hospitals and provides significant ROI.
    -- Announced that Compuware Covisint entered into an agreement to work
       with Microsoft(R) HealthVault(TM), Microsoft's personal health
       technology platform. Covisint will provide physicians with better, more
       efficient and secure access to patients' records by enabling patients
       to grant provider access to their HealthVault records through
       Covisint's OnDemand platform.
    -- Announced that it received Corp! Magazine's award for
       "Diversity-focused Company." The award is based on the company's
       commitment to diversity-in race, ethnicity and more-as a business
       driver.
    -- Announced the sponsorship of a webcast titled: "Improving Quality in
       Your Application Delivery Process-A Success Story at Arizona Federal."
       In the webcast, Kevin Bingham, Assistant Vice President, Information
       Technology at Arizona Federal presented how his organization leveraged
       test automation and a structured process to deliver applications
       without sacrificing budget, time or quality by using Compuware
       TestPartner.

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 a non-GAAP measure of net income and earnings per share. The net income and earnings per share disclosures on a non-GAAP basis excluded the impact of restructuring charges and capitalized software impairment. See the attached "Reconciliation of non-GAAP Information" schedule for complete details. Compuware management believes the non-GAAP financial information provided in this release helps investors better understand and assess 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.

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.

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 from the United States should call 800-230-1074. For international access, the conference call number is +1-612-332-0107.

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 is 906724. For more information, visit the Compuware Corporation Investor Relations web site at http://www.compuware.com.

Press Contact

Lisa Elkin, Vice President, Communications and Investor Relations, +1-313-227-7345

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.

                     COMPUWARE CORPORATION AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (In Thousands)
                                                        AS OF MARCH 31,
                   ASSETS                           2008              2007
    CURRENT ASSETS:
       Cash and cash equivalents                  $215,943          $260,681
       Investments                                  70,474           107,062
       Accounts receivable, net                    535,094           420,774
       Deferred tax asset, net                      44,374            33,392
       Income taxes refundable, net                  3,746            58,266
       Prepaid expenses and other current assets    49,285            41,019
          Total current assets                     918,916           921,194
    INVESTMENTS                                                       71,391
    PROPERTY AND EQUIPMENT, LESS ACCUMULATED
     DEPRECIATION AND AMORTIZATION                 365,691           385,227
    CAPITALIZED SOFTWARE, LESS ACCUMULATED
     AMORTIZATION                                   61,653            72,276
    OTHER:
       Accounts receivable                         244,388           172,255
       Deferred tax asset, net                      35,851            15,987
       Goodwill                                    356,267           353,682
       Other                                        35,791            37,400
          Total other assets                       672,297           579,324
    TOTAL ASSETS                                $2,018,557        $2,029,412
          LIABILITIES AND SHAREHOLDERS' EQUITY
    CURRENT LIABILITIES:
       Accounts payable                            $18,772           $27,713
       Accrued expenses                            148,268           141,970
       Income taxes payable, net                     4,976
       Deferred revenue                            472,864           359,688
          Total current liabilities                644,880           529,371
    DEFERRED REVENUE                               399,548           321,881
    ACCRUED EXPENSES                                19,513            11,346
    DEFERRED TAX LIABILITY, NET                     27,585            34,666
       Total liabilities                         1,091,526           897,264
    SHAREHOLDERS' EQUITY:
       Common stock                                  2,616             3,030
       Additional paid-in capital                  643,544           673,660
       Retained earnings                           261,754           444,159
       Accumulated other comprehensive income       19,117            11,299
          Total shareholders' equity               927,031         1,132,148
    TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $2,018,557        $2,029,412
                      COMPUWARE CORPORATION AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                      (In Thousands, Except Per Share Data)
                                      QUARTER ENDED      TWELVE MONTHS ENDED
                                        MARCH 31,             MARCH 31,
                                     2008      2007        2008        2007
    REVENUES:
      Software license fees        $100,794   $73,225    $297,506    $283,412
      Maintenance fees              126,311   117,713     476,374     457,594
      Professional services fees    111,811   122,091     455,731     471,996
         Total revenues             338,916   313,029   1,229,611   1,213,002
    OPERATING EXPENSES:
      Cost of software license
       fees                           6,815     7,457      30,475      28,581
      Cost of maintenance fees       13,190    11,454      46,300      41,533
      Cost of professional
       services                     104,169   107,280     413,921     420,729
      Technology development and
       support                       23,998    30,167     101,132     114,071
      Sales and marketing            71,220    74,905     267,800     281,730
      Administrative and general     48,076    50,055     182,488     193,578
      Restructuring costs             3,000                42,645
         Total operating expenses   270,468   281,318   1,084,761   1,080,222
    INCOME FROM OPERATIONS           68,448    31,711     144,850     132,780
    OTHER INCOME (EXPENSES)
      Interest income                 3,906     8,014      19,910      39,427
      Settlement                     16,160    10,598      16,160      10,598
      Gain on sale of investment
       in partially owned company              11,250                  11,250
      Other                            (260)      (91)       (528)       (998)
    OTHER INCOME, NET                19,806    29,771      35,542      60,277
    INCOME BEFORE INCOME TAXES       88,254    61,482     180,392     193,057
    INCOME TAX PROVISION
     (BENEFIT)                       27,079    (5,994)     45,998      34,965
    NET INCOME                      $61,175   $67,476    $134,394    $158,092
    DILUTED EPS COMPUTATION
    Numerator:  Net income          $61,175   $67,476    $134,394    $158,092
    Denominator:
      Weighted-average common
       shares outstanding           267,932   317,764     286,402     350,213
      Dilutive effect of stock
       options                          800     1,512       1,226         754
      Total shares                  268,732   319,276     287,628     350,967
    Diluted EPS                       $0.23     $0.21       $0.47       $0.45
                     COMPUWARE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
                                                      TWELVE MONTHS ENDED
                                                           MARCH 31,
                                                    2008              2007
    CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
      Net income                                  $134,394          $158,092
      Adjustments to reconcile net income
       to cash provided by operations:
         Depreciation and amortization              55,167            55,026
         Property and equipment impairment
          associated with restructuring              2,981
         Capitalized software impairment             3,873
         Gain on sale of investment in partially
          owned company                                              (11,250)
         Acquisition tax benefits                    5,090             5,257
         Stock option compensation                  11,553             9,432
         Deferred income taxes                      (2,022)            6,953
         Other                                       1,474                (8)
         Net change in assets and liabilities,
          net of effects from acquisitions and
          currency fluctuations:
            Accounts receivable                    (64,019)           61,202
            Prepaid expenses and other current
             assets                                 (7,120)          (13,857)
            Other assets                               640            (1,211)
            Accounts payable and accrued expenses     (837)          (46,483)
            Deferred revenue                        64,875           (38,448)
            Income taxes                            28,641            20,027
               Net cash provided by operating
                activities                         234,690           204,732
    CASH FLOWS PROVIDED BY INVESTING ACTIVITIES:
      Purchase of:
         Businesses, net of cash acquired           (4,649)          (51,818)
         Property and equipment                    (10,498)          (18,590)
         Capitalized software                      (14,359)          (21,457)
      Proceeds from sale of property                                  15,466
      Proceeds from sale of investment in
       partially owned company                                        11,250
      Investments:
         Proceeds                                  106,717           495,371
         Purchases                                                  (376,387)
            Net cash provided by investing
             activities                             77,211            53,835
    CASH FLOWS USED IN FINANCING ACTIVITIES:
      Net proceeds from exercise of stock
       options including excess tax benefits        67,178            54,364
      Contribution to stock purchase plans           4,066             4,635
      Repurchase of common stock                  (440,988)         (676,757)
            Net cash used in financing
             activities                           (369,744)         (617,758)
      EFFECT OF EXCHANGE RATE CHANGES ON CASH       13,105             7,810
    NET DECREASE IN CASH AND CASH EQUIVALENTS      (44,738)         (351,381)
    CASH AND CASH EQUIVALENTS AT BEGINNING
     OF PERIOD                                     260,681           612,062
    CASH AND CASH EQUIVALENTS AT END OF PERIOD    $215,943          $260,681
                      COMPUWARE CORPORATION AND SUBSIDIARIES
                              OPERATIONAL HIGHLIGHTS
                          (dollar amounts in thousands)
                                                             QUARTER
                                   QUARTER ENDED              ENDED
                                 MARCH 31, MARCH 31, YR-YR   DEC. 31   QTR-QTR
                                   2008      2007   %Change    2007    %Change
    License Fees:
      Distributed Product
       License Fees
        Vantage                  $23,510   $19,407   21.1%   $20,018   17.4%
        Changepoint                3,296     3,628   (9.2%)    3,781  (12.8%)
        Quality                    8,218     8,079    1.7%     7,231   13.6%
        Uniface                    4,464     5,900  (24.3%)    3,890   14.8%
        DevPartner                 2,385     3,305  (27.8%)    2,607   (8.5%)
      Total Distributed Product
       License Fees               41,873    40,319    3.9%    37,527   11.6%
      Mainframe Product License
       Fees                       58,921    32,906   79.1%    41,898   40.6%
    Total License Fees           100,794    73,225   37.6%    79,425   26.9%
    Maintenance Fees             126,311   117,713    7.3%   120,026    5.2%
    Total Products Revenue      $227,105  $190,938   18.9%  $199,451   13.9%
    Total Mainframe Products
     Revenue                    $147,247  $118,926   23.8%  $125,710   17.1%
    Total Distributed Products
     Revenue                     $79,858   $72,012   10.9%   $73,741    8.3%
    Total Products Revenue by
     Geography
      North America             $113,485  $100,971   12.4%   $97,898   15.9%
      International             $113,620   $89,967   26.3%  $101,553   11.9%
    Product Releases
      Mainframe                        7         5   40.0%         2  250.0%
      Distributed                      2        12  (83.3%)       12  (83.3%)
    Total Costs of Software
     Products                   $115,223  $123,983   (7.1%) $108,165    6.5%
    Deferred license fees
      Current                    $68,885   $71,550   (3.7%)  $68,033    1.3%
      Long-term                  $60,237   $44,304   36.0%   $48,087   25.3%
      Deferred during quarter    $38,545   $27,967   37.8%   $38,064    1.3%
      Recognized during quarter  $28,760   $24,736   16.3%   $23,550   22.1%
    Professional Services
      Professional Services
       Revenue                  $111,811  $122,091   (8.4%) $109,884    1.8%
      Contribution Margin            6.8%     12.1%              5.6%
      Billable Headcount           3,171     3,465   (8.5%)    3,251   (2.5%)
    Total Company Headcount        6,344     7,539  (15.9%)    6,496   (2.3%)
    Total DSO                      142.1     121.0             120.2
    Total DSO (Billed)              76.9      56.3              55.1
                      COMPUWARE CORPORATION AND SUBSIDIARIES
                               PRODUCT COMMITMENTS
                                  (In Thousands)
                                         QUARTER ENDED     TWELVE MONTHS ENDED
                                       MARCH 31, MARCH 31, MARCH 31, MARCH 31,
                                         2008      2007      2008      2007
    License revenue                    $100,794   $73,225  $297,506  $283,412
       Change in deferred license         9,786     3,231     5,033   (17,960)
    License contracts entered into
     during period                      110,580    76,456   302,539   265,452
    Maintenance revenue                 126,311   117,713   476,374   457,594
       Change in deferred maintenance    77,259    16,370    49,671   (24,931)
    Maintenance contracts & renewals
     entered into during period         203,570   134,083   526,045   432,663
    Total products commitments during
     period                            $314,150  $210,539  $828,584  $698,115

As Compuware continues to emphasize solution selling, deals are becoming more complex, increasing the likelihood that software transactions will be recognized ratably over the maintenance term. Therefore to understand the health of Compuware's software business, we believe it is important to also consider the amount of product commitments during the reported periods. Compuware now evaluates company performance for purposes of executive bonuses based in part on product commitments for the fiscal year.

    Prior periods were adjusted to conform with current period presentation.
                      COMPUWARE CORPORATION AND SUBSIDIARIES
                      RECONCILIATION OF NON-GAAP INFORMATION
                      (In Thousands, Except Per Share Data)
                                         QUARTER ENDED     TWELVE MONTHS ENDED
                                            MARCH 31,           MARCH 31,
                                         2008     2007       2008      2007
    Net income reconciliation:
       GAAP net income                  $61,175  $67,476   $134,394  $158,092
       Restructuring costs, net of tax    1,950              27,719
       Capitalized software impairment,
        net of tax                                            2,517
       Net income as adjusted           $63,125  $67,476   $164,630  $158,092
    EPS reconciliation:
       GAAP diluted EPS                   $0.23    $0.21      $0.47     $0.45
       Restructuring costs, net of tax                         0.09
       Capitalized software impairment,
        net of tax                                             0.01
       Diluted EPS as adjusted            $0.23    $0.21      $0.57     $0.45

Compuware initiated a restructuring plan in FY08. Our non-GAAP disclosures exclude these charges, primarily employee termination benefits, facilities costs (primarily lease abandonments and property and equipment impairment) and capitalized software impairment. We believe it is useful to exclude these costs when evaluating overall performance.