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Press Release

Net Income Increases 42% For the Year

Lanham, MD — Group 1 Software (Nasdaq: GSOF) today reported record results for its fourth fiscal quarter and for the 2001 fiscal year ending March 31, 2001. For the quarter, the Company reported that net income available to common stockholders increased 20% to a record $3.7 million or $0.53 per share on record revenue of $27.0 million. This compares with prior year's quarterly net income of $3.1 million or $0.45 per share on revenue of $25.5 million.

Revenue for the quarter from Customer Relationship Communications software and services rose 6% to $10.3 million and Enterprise Solutions software revenue rose to $16.7 million - both quarterly records. The Enterprise Solutions division saw strong demand for its new enterprise data quality (EDQ) solutions, including a major implementation for Aegon Insurance. The Customer Relationship Communications division also saw solid domestic and international sales growth.

For the fiscal year, the Company reported a 14% increase in revenue to a record $93.3 million compared with $81.8 million for the prior year. Net income available to common stockholders for the year increased 42% to a record $8.8 million or $1.28 per share, vs. $6.2 million or $1.00 per share the prior year.

Cash flow from operations continues to be strong. Cash and short-term investments totaled $44.1 million ($6.38 per share) at March 31, 2001, compared with $39.2 million at December 31, 2000 and $32.0 million reported March 31, 2000.

"We are very pleased with the progress the Company made during the fourth quarter, particularly in light of the softening economy," said Bob Bowen, CEO of Group 1 Software. "We continue to watch market conditions closely. While we certainly have and will continue to be affected by the economic slowdown, we are optimistic that we will be less susceptible because Group 1 solutions provide significant short term revenue-producing and cost-saving benefits."

"We also believe that the market currently offers good opportunities for acquisition of technology to augment our current product offerings," Bowen added. "With the recently announced acquisitions of the assets of HotData and TriSense, we have leveraged our financial strength to acquire technology and talent that substantially expand our core competencies."

Group 1 Software is a leading provider of software for data quality, marketing automation, customer relationship communications, and direct marketing applications. Group 1 supports MVS, VSE, AS/400, UNIX (including Linux), Windows NT, Windows 2000 and other operating systems and various computers. Group 1 has offices throughout the United States and in Canada, the United Kingdom, continental Europe, and Latin America. The Company is also represented in Asia and Australia.

Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation reform Act of 1995. Words like "are optimistic", "believe" are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. Readers are cautioned not to place undue reliance of these forward-looking statements, which address the conditions as they are found on the date of this press release. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances that arise after the date of this press release or to reflect the occurrence of unanticipated events. For additional information regarding these and other risks and uncertainties associated with the Company's business, reference is made to the Company's reports filed from time to time with the Securities and Exchange Commission. Group 1 Software, TriSense, HotData and DOC1 are registered trademarks of Group 1 Software, Inc. DataQuality.net is a trademark of Group 1 Software, Inc. All other trademarks referred herein are the properties of their respective owners.

GROUP 1 SOFTWARE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) GROUP 1 SOFTWARE, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)

For the Three Month For the Twelve Month Period Ended March 31, Period Ended March 31, 2001 2000 2001 2000

Revenue: Software license and related revenue $12,131 $13,443 $40,055 $38,853 Maintenance and services 14,870 12,038 53,278 42,898 Total revenue 27,001 25,481 93,333 81,751 Cost of revenue: Software license expense 2,769 2,472 11,204 12,302 Maintenance and service expense 5,718 4,174 19,149 14,968 Total cost of revenue 8,487 6,646 30,353 27,270

Gross profit 18,514 18,835 62,980 54,481

Operating expenses: Research and development 1,661 1,366 6,376 4,221 Sales and marketing 9,114 7,703 31,043 26,118 General and administrative 2,617 4,648 13,460 14,335 Total operating expenses 13,392 13,717 50,879 44,674

Income from operations 5,122 5,118 12,101 9,807

Non-operating income Interest income 695 441 2,533 1,184 Interest expense (4) (3) (109) (74) Other non-operating income (expense) 253 (9) 457 14 Total non-operating income 944 429 2,881 1,124 Income from operations before provision for income taxes 6,066 5,547 14,982 10,931 Provision for income taxes 2,377 2,466 6,077 4,642 Net income 3,689 3,081 8,905 6,289 Preferred stock dividend requirements (14) (14) (56) (56) Net income available to common stockholders $3,675 $3,067 $8,849 $6,233 Basic earnings per share $0.60 $0.52 $1.46 $ 1.07 Diluted earnings per share $0.53 $0.45 $1.28 $ 1.00 Basic weighted average shares outstanding 6,151 5,897 6,059 5,802 Diluted weighted average shares outstanding 6,912 6,847 6,958 6,245

GROUP 1 SOFTWARE, INC. CONSOLIDATED BALANCE SHEETS (In thousands, except par value)

March 31, March 31, 2001 2000 ASSETS Current assets: Cash and cash equivalents $36,179 $20,735 Short-term investments 7,954 11,259 Trade and installment accounts receivable, less allowance of $2,197 and $3,317 23,658 21,561 Deferred income taxes 2,406 3,297 Prepaid expenses and other current assets 3,650 3,407

Total current assets $73,847 60,259

Installment accounts receivable, long-term 695 1,945 Property and equipment, net 4,294 4,290 Computer software, net 20,234 21,823 Other assets 4,230 4,750 Total assets $103,300 $93,067

LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $1,977 $1,940 Current portion of capital lease obligation 74 109 Accrued expenses 7,692 6,627 Accrued compensation 6,549 7,617 Current deferred revenues 29,032 26,865 Total current liabilities $45,324 43,158

Capital lease obligation, net of current portion 14 88 Deferred revenues, long-term 544 1,169 Deferred income taxes 3,266 3,724 Total liabilities $49,148 48,139

Commitments and contingencies Stockholders' equity: 6% cumulative convertible preferred stock $0.25 par value; 1,200 shares authorized; 48 shares issued and outstanding (aggregate involuntary liquidation preference $950) 916 916 Common stock $0.50 par value; 50,000 shares authorized; 6,653 and 6,468 shares issued and outstanding 3,327 3,234 Additional paid in capital 28,997 27,431 Retained earnings 24,533 15,684 Accumulated comprehensive income (1,286) (2) Less treasury stock, 497 shares, at cost (2,335) (2,335) Total stockholders' equity 54,152 44,928 Total liabilities and stockholders' equity $103,300 $93,067

Investor ContactsMark Funston Charles MessmanGroup 1 Software MKR Group301.918.0381 212.308.4557mark_funston@g1.com cmessman@mkr-group.com

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