Compuware Profit Down Slightly, Revenue Up A Bit

DETROIT (WWJ) -- Compuware Corp. (Nasdaq: CPWR) Tuesday reported net income of $10 million or 5 cents a share in in its first fiscal quarter ended June 30, down from $10.5 million or 5 cents a share a year earlier.

Revenue was $227.5 million, up from $226.2 million in the same quarter a year earlier.

Among components of revenue, new software licenses, an important indicator of future revenue, were $35.4 million, up from $34 million a year earlier. Maintenance fees were $98.5 million, down from $102.9 million a year earlier. Subscription fees were $20.8 million, up from $20.5 million a year earlier. Professional services fees were $48.7 million, up from $48.2 million a year earlier.

Revenue of Compuware's Covisint secure collaboration and communication business were $24.1 million, up 17.1 percent from $20.6 million last year.

Michigan's biggest tech company said total revenue of its application performance management tools was $73.4 million.

Investors sure liked the numbers. They bid the stock up 51 cents a share, or 4.6 percent, to $11.50 a share in after hours trading Tuesday. During the regular trading day, Compuware stock closed at $10.99 a share, down a penny or 0.1 percent.

Compuware also reported "non-GAAP" net income of $22.4 million or 10 cents a share, up from $19.1 million or 9 cents a share in the first quarter a year ago. The company said the non-GAAP net income eliminates restructuring costs, the cost of compensation in stock, advisory fees, the writedown of assets acquired at more than their fair market value, and the tax effect of the adjustments. In a statement, Compuware said it believes the non-GAAP figures "provide meaningful supplemental information ... because they exclude amounts that management and the board of directors do not consider part of core operating results when assessing the performance of the organization."

"The first quarter was a good start to the year, and the results support our fiscal year 2014 forecast," said Compuware president and CEO Bob Paul in a statement. "The quarter was marked by several positive developments, including the improvement of our sales pipelines, the release of key, innovative solution enhancements and the acquisition of several new, strategic customers in critical new growth areas. In addition to establishing strong momentum during the quarter, Q1 was also highlighted by the continued progress of our shareholder-creation initiatives, including the issuance of the company's first-ever quarterly cash dividend and the furthering of our cost-rationalization efforts. Regarding these efforts, we remain on track to eliminate $45 million in corporate expenses in fiscal year 2014, as part of our larger goal of eliminating a minimum of $80 million to $100 million of these costs from the business over the next two years."

In a conference call with investors and the media, Paul cited "solid year over year Covisint growth and improving APM margins" as reasons for optimism.

Paul also said the company is still cost-cutting, remaining on track to eliminate $45 million in costs this fiscal year.

Among costs, sales and marketing expense was $59.5 million, down from $62.2 million a year ago. Administrative and general expense was $38.2 million, down from $39.7 million a year earlier. Restructuring costs were $5 million; they were zero a year earlier.

Compuware said its software revenue in North America were $86.7 million, down 4.3 percent. International software sales were $68 million, up 1.8 percent.

The company had 4.363 employees as of June 30, down from 4.560 a year earlier.