CLI Receives Orders Valued at $1 Million to Supply MPEG-2 Encoders to Japan; Nissho Iwai to Distribute CLI Broadcast Products in Japan.

SAN JOSE, Calif.--(BUSINESS WIRE)--Dec. 21, 1995--Compression Labs, Incorporated (CLI)(NASDAQ/NMS:CLIX) announced today that Nissho Iwai, through Nissho Electronics Corporation (NELCO), a Japanese distributor, has placed orders valued at over $1 million for the Company's Magnitude MPEG-2 encoding systems. These will be used by a number of system integrators for encoding compressed digital broadcast and for designing integrated receiver decoders for satellite broadcasting for applications in education, entertainment, business television and information services.

CLI and Nissho Iwai also announced that they have signed a marketing agreement under which Nissho Iwai will provide distribution, integration, and maintenance of CLI digital broadcast systems in Japan.

According to Nissho Iwai, the system integrators selected CLI's Magnitude MPEG-2 realtime encoding system because of functions, such as technical leadership in statistical multiplexing, reliability, installation record and popularity around the world.

Gary Trimm, president of CLI's Broadcast Products Group, said, "The combination of Nissho Iwai's technical expertise with CLI's leading compressed digital video products will bring us success in Japan. We continue to lead the market in MPEG-2 encoding with our premier Magnitude products. We are pleased to be the first in Japan as we have been in the U.S., Africa, Argentina, China Europe, and Taiwan."

Magnitude is an MPEG-2 based product family for the delivery of entertainment and information services over digital telephone, cable and satellite networks. Magnitude complies with the worldwide standard, MPEG, an image-compression scheme for full motion video developed by the Moving Picture Expert Group under the direction of the International Standards Organization (ISO).

The modular Magnitude encoder is ideal for digital television and is used by DIRECTV(r) and USSB for their highly successful, high power direct satellite broadcast offering. The encoder features statistical multiplexing, StatMux(tm), which enables broadcasters to enhance the video quality and add more services in the same bandwidth thus vastly improving network economics. Broadcasters can dynamically allocate bandwidth among the multiplexed video channels depending on the picture complexity. The net result in a broadcast system is the ability to add 20 percent more content (channels) in the same bandwidth.

CLI designs and manufactures solutions for economical video communications. Using its core technology, compressed digital video, the Company provides a range of videoconferencing and broadcast products for business, government, educational, healthcare, and entertainment organizations.

CONTACT: CLI

Joyce Strand, [phone]

or

Nissho Iwai

Iwao Yamaguchi, 011 81 3 3588 4730