Communication Intelligence Corp. 1996 Fiscal Results.

REDWOOD SHORES, Calif.--(BUSINESS WIRE)--March 3, 1997-- Communication Intelligence Corp. (CIC) (NASDAQ:CICI) today announced its financial results for the fourth quarter and the fiscal year ended Dec. 31, 1996.

Revenues for the 1996 fiscal year were $2.9 million, up from $2.3 million for the corresponding prior year. The fiscal 1996 net loss was $6.4 million, or $0.15 per share on 41.3 million weighted average common shares, as compared to a net loss of $5.6 million, or $0.16 per share on 34.6 million weighted average common shares, in fiscal 1995.

The company's total operating costs and expenses were $9.4 million, including cost of sales, in fiscal 1996 as compared to $7.8 million in fiscal 1995.

Revenues for the fourth quarter ended Dec. 31, 1996 were $816,000, up from $718,000 in the comparable quarter of the prior year. The net loss for the quarter was $1.9 million compared to a net loss of $1.4 million in the corresponding quarter of the prior year.

Net loss per share was $0.05 on 42.0 million weighted average common shares compared to a per share net loss of $0.04 on 36.7 million weighted average common shares for the same quarter of the previous year.

The 1996 revenue results do not reflect the December, 1996 introduction of Handwriter in the retail channel through CompUSA stores. In January, 1997, a nationwide roll-out of Handwriter took place in all of CompUSA's approximate 120 stores across the United States. CIC records retail revenue based on sell through at the store level and not based on shipment per CompUSA purchase orders to CIC.

"We are optimistic about this roll-out and anticipate recognizing increased revenue in 1997," said James Dao, chief executive officer.

The company's cash and short-term investments at Dec. 31, 1996 totaled $11.3 million compared to $7.5 million at the end of 1995. Deferred revenue from advance non-refundable royalty payments declined to $2 million at Dec. 31, 1996 compared to $2.6 million at Dec. 31, 1995.

Other current liabilities, excluding deferred revenue decreased to $2.1 million at Dec. 31, 1996 compared to $2.4 million at Dec. 31, 1995. Long-term liabilities decreased to $32,000 at Dec. 31, 1996 versus $830,000 at the 1995 year-end.

Certain statements contained in this press release may constitute "forward-looking" statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known or unknown risks, uncertainties and other factors which may cause actual company or industry results to differ materially from such expectations.

Such factors include the following: (1) technological, engineering, manufacturing, quality control, or other problems which could delay the commercial sale or shipment of the company's products; (2) economic, business and competitive conditions in the software industry and technological innovations which affect the company's products; and (3) the company's inability to protect its trade secrets, operate without infringing upon the proprietary rights of others and prevent others from infringing on the proprietary rights of the company.

The Company

Communication Intelligence Corp. develops, markets, and licenses natural input computer technology -- products that use pen and image for input. Founded in 1981, CIC is a leading supplier of pen computing software products to hardware manufacturers throughout the world. The company's products include the multilingual Handwriter Recognition System and Sigcheck dynamic signature verification software, and the PenDOS and PenMac pen operating environments.

CIC markets multiple software tools such as InkTools and Sign-it which allow signature capture and verification within computer applications; Handwriter line of peripheral input devices which enable PC users to have pen input capabilities on their desktop and laptop personal computers; Software products for the Microsoft Windows CE operating system platform -- Jot, a compact handwriting recognition system and QuickNotes, a fast and simple electronic mobile notetaker application.

CIC is headquartered in Redwood Shores and has subsidiaries in Japan and China. CIC's stock is publicly traded on Nasdaq, symbol CICI. -0-

Note to Editors: Company and product names used herein are trademarks or registered trademarks of their respective companies. Microsoft and Windows are either registered trademarks or trademarks for Microsoft Corp. in the US and/or other countries. -0-

                   Communication Intelligence Corp.
        Selected Consolidated Statement of Operations Information
             (Dollars in thousands, except per share amounts)

                            Three Months Ended    Twelve Months Ended
                                (unaudited)
                            12/31/96   12/31/95   12/31/96  12/31/95

Revenue                         $816       $718     $2,887    $2,314
Net loss                     $(1,935)   $(1,414)   $(6,356)  $(5,595)
Net loss per common share     $(0.05)    $(0.04)    $(0.15)   $(0.16)
Weighted avg. shares
 outstanding                  42,020     36,713     41,265    34,621


               Selected Consolidated Balance Sheet Information
                         (Dollars in thousands)

                                         12/31/96     12/31/95

Cash & short-term investments             $11,325       $7,459
Total current assets                       12,420        8,699
Total assets                               13,503        9,776
Deferred revenue(1)                         2,006        2,570
Total current liabilities(2)                4,136        4,936
Long-term obligations                          32          830
Stockholders' equity and preferred stock    9,335        4,010

(1) Deferred revenue consists principally of advance non-refundable
    royalty payments from licensees.

(2) Includes deferred revenue.

CONTACT: Communication Intelligence Corp., Redwood Shores

Maurice Boucher, 415/631-7888

[e-mail]