Compuware Net On Continuing Operations Flat

DETROIT — In what may be its last fiscal year as a publicly traded company, Compuware Corp. (Nasdaq: CPWR) reported lower net income on a slight decline in revenue for its second fiscal quarter ended Sept. 30.

Net income was $9.2 million or 4 cents a share, down from $16.3 million or 7 cents a share in the same quarter a year earlier. Revenue was $170.9 million, down from $172.7 million a year earlier.

The sharp decline in net income was due to $7.2 million in net income from operations that have been sold off in preparation for the company going private in a $2.5 billion transaction with the Chicago private equity firm Thoma Bravo LLC. Net income from continuing operations was virtually unchanged at $9.15 million, up from $9.13 million a year earlier.

The company also provided a “non-GAAP” (for generally accepted accounting practices) net income from continuing operations figure of $19.9 million or 9 cents a share, down from $21.2 million or 10 cents a share a year earlier. This figure excludes the expense of stock-based compensation, the amortization of purchased software and acquired intangible assets, restructuring expenses, advisory fees, and the income tax effect of those adjustments. That figure was in line with analyst estimates,

Compuware CEO Bob Paul said in a statement: “The second quarter was a solid period for Compuware, as we ended up ahead of projected profitability and in line with revenue expectations. We have established a market-leadership position in application performance management and continue to see great progress in stabilizing our mainframe business. We remain extremely enthusiastic about the opportunity in front of us. The completion of the company’s transformation into a lean and focused entity able to compete and win in today’s tech market is almost complete. Also, our recent announcement regarding the finalization of the Covisint spin marks the accomplishment of another key milestone along this path, all of which will significantly benefit customers, employees and shareholders alike.”

At midday Friday, Compuware stock stood at $10.01 a share, up 4 cents or 0.4 percent on the day. The stock is virtually unchanged over the past year, but had fallen to $8.59 a share in August, before the Thoma Bravo buyout offer of $10.92 a share.

Compuware said it plans to mail the proxy statement on the Thoma Bravo deal to shareholders around Nov. 4 and expects to hold the shareholder meeting seeking approval for the deal around Dec. 8.

Highlights of the quarter included a 9 percent revenue increase for Compuware’s Dynatrace application performance monitoring business segment to $83.2 million. Services fees jumped 17 percent to $7.9 million. Compuware’s mainframe business segment saw revenue fall 8.1 percent to $66 million.

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