INCON Reports Record Sales & Improved Earnings for the Year Ended December 31, 1997.

SACO, Maine--(BUSINESS WIRE)--Feb. 26, 1998--Intelligent Controls, Inc. (INCON) - (AMEX symbol:ITC.EC), a manufacturer of electronic measurement systems for the petroleum and utility industries, announced today that 1997 sales grew over 30% to a company record of $13 million, compared to $9.9 million in 1996. Net profit rose significantly to $434,975 or $.13 basic and diluted earnings per share, up from a loss of $(420,113) or $(.13) basic and diluted loss per share in 1996.

Fourth quarter sales grew moderately to $3 million, an 8% growth over sales of $2.78 million for the same period in 1996. Earnings reached $98,452 or $.03 basic and diluted earnings per share, as compared to a basic and diluted loss of $(.07) per share in the fourth quarter of 1996.

Alan Lukas, CEO, commented "I am pleased with the turn-around in earnings and sales growth. All areas of the business improved; however, our warranty expense remains higher than expected. Although quality improvement initiatives reduced our warranty expense for product shipped in 1997, the majority of product warranty claims in 1997 were attributed to product delivered prior to 1997. We expect that our warranty costs will continue to decline in 1998."

Mr. Lukas added, "During 1997, we refined both our line leak detector and liquid level sensor, and in the fourth quarter, we released two 'next generation' tank gauging products. These new units have enhanced communication capabilities, an improved printer, and are more user-friendly to operate. I believe that we are well positioned to take advantage of the strong EPA compliance-driven market forecasted for 1998."

With regard to INCON's power utility business, Mr. Lukas said, "We continued to add to our installed base of users who are evaluating our new circuit breaker monitor -- a device to help utilities predict maintenance intervals and avoid catastrophic failure. A second product for the power utility market was developed in 1997. It is used to remove water and contamination from oil used in sub-station transformers and circuit breakers. INCON continues to be committed to both the Petroleum & Power Utility Industries and will continue to develop new technology in these markets through 1998 and beyond."

The Company announced that Andrew Clement joined the company, in November, as Controller. Mr. Clement is responsible for the financial management and reporting of the company, as well as overseeing the MIS function. He has been employed in manufacturing and petroleum industries with a strong background in cost accounting and computer systems administration.

Also announced was the addition of Mr. Kevin DeVinney who joined INCON last month as Marketing Manager for Petroleum Products. Mr. DeVinney has over-sight responsibility for product marketing and technical service. Mr. DeVinney comes to INCON from Hoidale Corporation in Tulsa, Oklahoma, where he was the Branch Manager. He has a strong background in the petroleum industry through his many years of experience as a Product Manager and Systems Account Manager with Tokheim Corporation. -0-

                 INCON REPORTS 1997 OPERATING RESULTS


                     TWELVE MONTHS ENDED          QUARTER ENDED
                      12/31/97   12/31/96      12/31/97    12/31/96

Net Sales          $13,005,184 $ 9,890,728    3,010,594 $ 2,782,000

Net income (loss)      434,975    (420,113)      98,452    (216,800)

Basic and diluted
 earnings (loss)
 per share         $       .13 $      (.13) $       .03 $      (.07)

Weighted average
 common shares       3,249,769   3,231,058    3,262,375   3,231,058

Balance Sheet Data

Total Assets        $5,388,615  $6,711,021

Long-term debt         372,401     409,967

Stockholders'
  equity             2,761,887   2,280,806

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Safe harbor statement under Private Securities Litigation Reform Act of 1995: Statements contained in this news release which are not historical fact, such as forward-looking statements concerning 1998 sales warranty expense, and product development efforts involve uncertainty. Such statements are subject to various factors including uncertainties regarding future market conditions, unforeseen product problems and customer requirements, that could cause actual results to differ materially from those set forth in the forward looking statements. These factors are discussed in more detail in the Company's latest Annual Report on Form 10-KSB.

CONTACT: INCON

Alan Lukas, CEO

[phone], ext. 113