Output Technology Announces Revolutionary PeerlessPowered Printer.

EL SEGUNDO, Calif.--(BUSINESS WIRE)--Dec. 22, 1998--

Peerless Technology Powers the OTC6500 Non-Impact Printer

That Combines New Marking and Fusing Engine Technology

Peerless Systems Corporation (Nasdaq:PRLS), a leader in embedded imaging systems, today announced that Output Technology has released its revolutionary PeerlessPowered(tm) product, the OTC6500 non-impact printer for continuous form printing.

The OTC6500 combines two innovative technologies for the first time -- electron beam imaging with a warm offset transfer to print on a very wide range of media material. The marking and fusing combination allows high speed printing up to 65 pages per minute (ppm) and up to a million pages a month, making the printer one of the most reliable, robust printers in its class.

The flexibility of Peerless technologies allows companies like Output Technology to adapt unique marking technology, such as electron beam, to the PeerlessPage(tm) operating system and QuickPrint(tm) ASIC imaging co-processors. The OTC6500 also contains PeerlessPrint(tm)5E (Peerless' emulation of HP's PCL5e). This 65 ppm product continues to demonstrate the scalability of Peerless' architecture.

"Using Peerless technology allows us to deliver great value with our remarkably priced, heavy duty printers with impressive throughput speed, high reliability and low cost of ownership," said Mark Merhab, product manager, OTC6500 at Output Technology. "The OTC6500 was developed by combining Peerless imaging technologies, robust high speed and long-life press technologies into a single revolutionary product for the data processing world."

"Output Technology, a long time customer of Peerless, has adapted Peerless' technologies to unique printer solutions, such as the revolutionary OTC6500," said Ron Davis, director of marketing at Peerless. "Peerless offers the technology, flexibility, cost and performance for OEMs like Output Technology, to build new generations of printers."

About Peerless Systems Corporation

Peerless Systems Corporation is a leading provider of software-based embedded imaging systems to Original Equipment Manufacturers (OEMs) of digital document products. Digital document products include printers, copiers, fax machines, scanners and color products, as well as multifunction products that perform a combination of these imaging functions. In order to process digital text and graphics, digital document products rely on a core set of imaging software and supporting electronics, collectively known as an embedded imaging system. The Peerless family of products and engineering services enable OEMs to develop digital printers, copiers and multifunction products quickly and cost effectively using such popular products such as Peerless' emulation of HP (NYSE:HWP) PCL languages. Among Peerless' customers are blue chip companies such as Xerox (NYSE:XRX), IBM (NYSE:IBM), Ricoh, Canon (Nasdaq:CANNY), Minolta, Kyocera (NYSE:KYO), Tally, Seiko Epson, Tektronix (NYSE:TEK), Samsung, and other international corporations. Peerless holds strategic partnerships with Adobe (Nasdaq:ADBE), IBM Microelectronics, Motorola (NYSE:MOT), Rockwell (NYSE:ROK), the NetSILICON division of Osicom (Nasdaq:FIBR), Emulex (Nasdaq:EMLX), and other technology leaders. Peerless is located at 2381 Rosecrans Avenue, El Segundo, CA 90245. Main telephone: [phone]; facsimile: 310/536-0058; www.peerless.com.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:

With the exception of historical information, the statements set forth above include forward-looking statements that involve risk and uncertainties. These statements include Company beliefs with respect to revenue growth and profitability. The company wishes to caution readers that a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include the following: the fact that the company's markets are characterized by rapidly changing technology, evolving industry standards and frequent introductions of new products and enhancements, and the company's ability to respond to such changes; fluctuations in OEM shipments which generate the Company's license fee revenue; difficulties which the company may experience in completing the development of turnkey designs for OEM customers, its digital photography technology, its integrated multifunction semiconductor solutions or other products; the fact that the multifunction and color markets targeted by the company are at an early stage of development; the highly competitive nature of the markets for the company's products; the company's ability to attract and retain skilled personnel; the company's reliance on third party suppliers for components used in the company's products; the quarterly variability in the company's bookings and design wins; and the company's reliance on a relatively small number of OEM customers for a large percentage of its revenue. These and other factors that could cause actual results to differ materially from those in the forward-looking statements are also discussed in the company's filings with the Securities and Exchange Commission, including its recent filings on Form 10-K and 10-Q. The company disclaims any obligation to update these statements for subsequent events.

Note to Editors: Peerless, Peerless Systems, PeerlessPage, PeerlessPrint, PeerlessPowered, AccelePrint, All-Pages-Print, MultiPrint, PicturePrint, QuickPrint, SyntheSys and WinEXPRESS are trademarks of Peerless Systems Corp. Memory Reduction Technology (MRT) is a registered trademark of Peerless Systems Corp. PostScript is a registered trademark of Adobe Systems Incorporated. PCL is a registered trademark of Hewlett-Packard Company. All other brand and product names are trademarks or registered trademarks of their respective owners.