Annual Report 1999    | investor relations | corporate home
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Dear Fellow Shareholders:

Fiscal 1999 was another year of outstanding growth in revenue and profitability for Compuware Corporation. During the year, we reached more than $1.6 billion in revenue and earned wide recognition from many of the world's largest 20,000 corporations for the value we bring to their businesses. Our strategy of providing practical solutions that deliver immediate and measurable return on our clients' Information Technology (IT) investments continued to be a successful one, validated by double-digit growth in all business lines. As we continue to execute this strategy during the current fiscal year, I remain confident of our opportunities for continued growth and see no significant impediments to achieving our aggressive goals.

Compuware's strong fiscal year results reflect the value our clients continue to find in the products and professional services we offer. During fiscal 1999, we enhanced this value by introducing new versions of our products, extending product support and integration, acquiring new technology, entering into key productivity partnerships and expanding our professional services staff. These activities enabled us to achieve excellent growth in our mainframe and client/server product lines and to further integrate Compuware people, products and professional services into valuable solutions for our clients.

Supporting e-commerce and web-based systems was a critical part of our strategy during fiscal 1999. Today, e-commerce, or web-based systems development and deployment, represents more that 12 percent of our license and services revenue. We expect this new technology to continue to add to our strength, contribute to our revenue and provide us with yet another engine for growth.

Another important development this fiscal year was the tremendous number of companies that re-legitimized their mainframe environments by spending millions of dollars to make them Year 2000 (Y2K) compliant, thereby committing themselves to that resource for the foreseeable future. Our experience shows us that if a company wants efficient, secure, rapid-response, high-transaction Internet applications, they have almost exclusively picked a mainframe as their server. Given Compuware's role as the preeminent supplier of mainframe productivity tools, we fully expect these companies to look to Compuware for their productivity solutions.

Fiscal 1999

Revenues for the fiscal year ending March 31, 1999 were $1.638 billion, up 43.8 percent from the prior year. Before special charges, net income for the fiscal year was $352.7 million and earnings per share were 96 cents (basic EPS) and 88 cents (diluted EPS).

Software license fee revenue increased 46.2 percent during fiscal 1999, growing from $467.3 million to $683.4 million. Maintenance revenue grew 36.9 percent from $244.3 million to $334.4 million and professional services fees increased 45.1 percent from $427.8 million to $620.7 million.

Why Compuware Will Continue to Create Value

Here are a few reasons why Compuware will continue to create value for our clients:

  • Compuware products offer our clients tremendous value in short time frames.
  • Our products have long, useful lives. They are constantly updated to reflect new and changing technology.
  • Compuware products improve the productivity of our clients' employees, not their infrastructure. Consequently, we are not susceptible to the cyclical nature of MIP shipments.
  • Our products provide the same compelling productivity and value proposition when used in new development, maintenance or package installs. They are particularly useful for e-commerce and web-based applications.

Having just completed a year in which we smashed every expectation by a wide margin, we now have an exciting opportunity to duplicate this difficult feat during the current fiscal year.

I firmly believe that our strategies, practices and people will continue to create value for clients and show you why Compuware is one of the best high-tech companies in the world.


Peter Karmanos, Jr.
Chairman and Chief Executive Officer


  Annual Report 1999 

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