AXS-One Reports Record First Quarter Financial Results

AXS-One Reports Record First Quarter Financial Results
License Revenue Doubles Over Same Period Last Year; 11th Consecutive Profitable
Quarter


RUTHERFORD, N.J., April 29  /PRNewswire-FirstCall/ -- AXS-One Inc. , a leading
provider of enterprise solutions for compliance and governance, today announced
its financial results for the first quarter ended March 31, 2004.

Revenues for the quarter increased approximately 16 percent to $10.9 million,
from $9.4 million in the corresponding prior year period. License revenues were
$2.5 million, including $1 million (40 percent) related to e-mail management
and archiving products, an increase of 98 percent versus the $1.2 million in
license revenues reported in the same quarter last year. While revenues
increased 16 percent, operating expenses increased only 13 percent.  Operating
income increased 55 percent to $806,000, compared to $520,000 in the first
quarter of 2003.  Net income for the three months increased 76 percent to
$753,000 compared to $427,000 for the first quarter last year, as the Company
reported its 11th consecutive profitable quarter. Diluted earnings per share
were $0.03 per diluted share, based on 28.8 million shares outstanding,
compared to diluted earnings per share of $.02 per diluted share, based on 25.6
million shares outstanding for the first quarter of 2003. The increase in
shares is due to an increase in the number of options that are now exercisable.

The Company's balance sheet reported $3.7 million in cash as of March 31, 2004,
compared to cash of $2.3 million as of March 31, 2003.  That amount was
increased in early April 2004 by approximately $7.8 million, which was a direct
result of the recently announced private placement of shares of common stock.
Long-term debt has been fully repaid prior to March 31, 2004.

During the quarter, New York Life Insurance Company, Raymond James Financial,
Inc. and others, chose the AXS-One(R) Compliance Platform solutions for
regulatory compliance, operational storage and records management for all
firm-wide electronic communications.  In addition, the recently announced
marketing partnership with Sector, a subsidiary of the Securities Industry
Automation Corporation (SIAC), was instrumental in closing key hosted email
archival solutions to several financial clients to achieve regulatory
compliance in a fully outsourced environment.  The continued focus on
compliance related to electronic communication, particularly due to the
increased government regulations and accounting guidelines, continues to drive
business for the AXS-One Compliance Platform solutions for electronic
communications, corporate records and overall records management and
disposition.  For the quarter, more than 40 percent of the Company's license
revenue was related to enterprise solutions for compliance, operational &
records management, and long-term archival of electronic communications.

Additionally, Pfizer, AIG and other current global clients invested in
additional AXS-One Enterprise financial management solutions in order to
improve the management and control of their financial processes.  For the
quarter, 62 percent of the license revenue recognized was with customers inside
the United States, while 38 percent was recognized internationally.

"I'm pleased to report another successful and profitable growth quarter for
AXS-One, our eleventh consecutive profitable quarter," commented John Rade,
AXS-One Chief Executive Officer.  "We continue to gain traction with our
compliance platform solutions for email, instant messaging and business records
management.  I believe these solutions will take on an ever-increasing level of
importance based on the current business environment for managing risk, along
with new legislation, regulations and compliance guidelines.  The Company's
earnings were negatively impacted during the quarter by $200,000 in
expenditures, related to finding my successor and the hiring of two new
operational managers. I believe the Company has a solid foundation in place and
is on a strong footing moving forward."

Mr. Rade continued, "I'm particularly pleased with the important reseller
agreement we initiated with Sun Microsystems in April 2004, authorizing Sun to
sublicense the AXS-One Compliance Platform solutions for e-mail management and
archival management as well as the AXS-One Enterprise financial management
solutions.  We hope to broaden this relationship with Sun, potentially opening
new markets domestically and overseas, and believe this agreement will help us
increase our penetration across key market segments without substantial
increases in sales and marketing expenses.  Sun will be able to deliver more
infrastructure value to their customers due to the tight integration of our
software with their product lines."

About AXS-One Inc.

AXS-One (AMEX:AXO) is a leading provider of records management, email and
instant messaging archival management, financial management, and workflow
software to efficiently manage complex business processes.  AXS-One has
implemented high-volume, interoperable, scalable, and secure business solutions
for the global 2000.  Its Web Services-based technology has been critically
acclaimed as best of class.  The AXS-One Compliance Platform Solutions provide
fast deployment of e-mail/instant messaging archival solutions for regulatory
compliance and operational efficiency.  AXS-One has offices in worldwide,
including Australia, Canada, Singapore, United Kingdom, United States, and
South Africa.  AXS-One was founded in 1978, and is headquartered in Rutherford,
New Jersey, U.S.A. For further information, visit the AXS-One web site at
http://www.axsone.com/.

AXS-One, the AXS-One logo, "Access Tomorrow Today," AXSPoint and TransAXS are
registered trademarks of, and e-Cellerator, AXS Desk, "AXS-One Collaboration
FrameWorks," SMART, AXS-Link and Tivity are trademarks of, AXS-One Inc. in the
U.S.  All other company and product names are trademarks or registered
trademarks of their respective companies.

Special Note Regarding Forward-Looking Statements: A number of statements
contained in this release are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 that involve risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied in the applicable statements.  These risks and
uncertainties include, but are not limited to: potential vulnerability to
technological obsolescence; the risks that its current and future products may
contain errors or defects that would be difficult and costly to detect and
correct; potential difficulties in managing growth; dependence on key
personnel; the possible impact of competitive products and pricing; and other
risks described in more detail in AXO's Securities and Exchange Commission
filings.

                           AXS-ONE INC. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF OPERATIONS
                       (In thousands, except per share data)
                                    (unaudited)

                                               Three Months Ended March 31,
                                                  2004               2003
  Revenues:
    License fees                                 $2,460             $1,241
    Services                                      8,411              8,089
    Other-related parties                            51                115
      Total revenues                             10,922              9,445

  Operating expenses:
    Cost of license fees                            411                341
    Cost of services                              4,269              3,964
    Sales and marketing                           1,970              1,631
    Research and development                      1,899              1,674
    General and administrative                    1,567              1,315
      Total operating expenses                   10,116              8,925
  Operating income                                  806                520
  Other income (expense):
    Interest income                                  25                 12
    Interest expense                                (12)               (73)
    Gain on sale of subsidiary                       --                 71
    Equity in losses of joint ventures              (33)               (19)
    Other expense, net                              (33)               (84)
         Other expense, net                         (53)               (93)
  Net income                                       $753               $427

  Basic and diluted net income per
   common share                                   $0.03              $0.02

  Weighted average basic common shares
   outstanding                                   25,250             24,865

  Weighted average diluted common
   shares outstanding                            28,782             25,581

      The unaudited financial information included in this document is
      intended only as summary provided for your convenience, and should be
      read in conjunction with the complete consolidated financial
      statements of the Company (including the Notes thereto, which set
      forth important information) contained in its Reports on Form 10-K and
      10-Q filed by the Company with the U.S. Securities and Exchange
      Commission (SEC).  Such reports are available on the public EDGAR
      electronic filing system maintained by the SEC.

      This press release contains forward-looking statements.  Such
      statements are only predictions, and actual events or results may
      differ materially.  All forward-looking statements involve risks and
      uncertainties, including, without limitation, the risks detailed in
      the Company's documents and reports filed from time to time with the
      Securities and Exchange Commission.


DATASOURCE: AXS-One Inc.



CONTACT:  William Levering of AXS-One Inc., [phone],

; or IR, Matthew Hayden of Hayden Communications,

[phone], , for AXS-One Inc.



Web site:  http://www.axsone.com/ 

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